Statutory refund remedy under sales tax law must be pursued before seeking writ relief for deducted contractor tax.

Section 54 of the Orissa Value Added Tax Act, 2004 provides a complete mechanism for tax deduction from payments to works contractors, including an application for a certificate of no deduction or deduction at a lower rate. Although the Explanation to section 54 does not authorise deduction on the value of certain inter-State, outside-State, or import sales, the proper course is still to pursue the statutory certificate procedure under sub-section (5). A writ petition seeking only refund of allegedly illegally collected tax was described as ordinarily not maintainable, with civil suit remaining the appropriate remedy. The doctrine of unjust enrichment was also held not to assist the petitioner against the State in the stated circumstances.

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Issues: Whether a writ of mandamus could be issued for refund of the amount deducted by the contractee and deposited with the State, and whether the petitioner was entitled to bypass the statutory mechanism under section 54 of the Orissa Value Added Tax Act, 2004.

Analysis: Section 54 of the Orissa Value Added Tax Act, 2004 contains a complete scheme governing deduction of tax from payments made to contractors executing works contracts, including a procedure for obtaining a certificate of no deduction or deduction at a lower rate on application to the assessing authority. The Explanation to section 54 does not authorise deduction on the value of goods transferred in inter-State sales, outside-State sales, or import sales, but the proper course is still to seek the statutory certificate under sub-section (5). The Court held that the petitioner had not availed of that remedy. It further held that a writ petition solely for refund of tax alleged to have been illegally collected is ordinarily not maintainable, the appropriate remedy being a civil suit, and the doctrine of unjust enrichment could not assist the petitioner against the State in the circumstances.

Conclusion: The petitioner was not entitled to a writ directing refund, and the claim for refund had to fail in writ jurisdiction.

Final Conclusion: The writ court declined to grant monetary refund relief because the statute provided a specific mechanism and the refund claim was not maintainable in the form sought.

Ratio Decidendi: Where a taxing statute provides a specific machinery for determining whether tax is deductible at source, a writ petition seeking only refund will ordinarily not lie unless the statutory remedy is first pursued, and a claim for refund of allegedly illegal tax collection is generally left to ordinary civil remedies.

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