Unjust enrichment bars retention of collected purchase tax; recovered tax component must be deposited with the State exchequer.

Where the procurement price expressly included purchase tax and the appellants admitted that the buyer's payment contained that tax element, the collected amount could not be retained by the dealers. Even if the underlying liability to purchase tax was disputed, the decisive fact was that the tax component had already been recovered from the buyer. Retention of that collection would amount to unjust enrichment, which is impermissible in law. The SC held that a dealer who has recovered a tax component cannot keep it merely because the levy is contested, and the amount had to be deposited with the State exchequer.

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Issues: Whether the appellants, having collected purchase tax from the buyer as part of the procurement price, could retain that amount despite the dispute as to the levy and exemption, or whether the collected tax element had to be deposited with the State exchequer.

Analysis: The procurement price under the relevant levy order expressly included purchase tax. The appellants admitted that the payment received from the buyer contained the tax element. In that situation, the amount collected could not be retained by the dealers for their own use. Even assuming a dispute existed as to the legal liability to levy purchase tax, the decisive fact was that the amount had already been collected from the buyer. Retention of such collection would amount to unjust enrichment, which is impermissible in law. A dealer who has recovered a tax component cannot keep it merely because the underlying levy is contested.

Conclusion: The appellants were bound to deposit the purchase tax component collected from the buyer with the State exchequer, and could not retain it.

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