Tax refund after remission of levy upheld where no passing on to customers was shown.

Tax remission on certified seeds meant the levy on the relevant turnover ceased to be legally due. A refund of tax deposited from the dealer's own funds was therefore maintainable, and the absence of an express refund prohibition in the circular did not defeat the claim. Refund could be denied only if the tax burden had been passed on to customers; in the absence of any evidence of such recovery, the refund claim remained sustainable and the dealer was entitled to repayment of the tax paid under the earlier assessment order.

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Issues: Whether, after remission of tax on certified seeds, the assessee was entitled to refund of tax already deposited on the disputed turnover in the absence of any express prohibition in the circular and without proof that the tax had been realised from customers.

Analysis: The remission granted by the Government order and circular meant that the tax on the relevant turnover ceased to be tax legally due. Where a dealer had deposited the amount from its own pocket against a disputed levy, the absence of a clause expressly barring refund did not defeat the claim under the refund provision. The reasoning also accepted that refund could be denied only if the burden had been passed on to customers, and there was nothing on record to show such recovery in the present case.

Conclusion: The refund claim was sustainable and the assessee was entitled to refund of the tax deposited pursuant to the earlier assessment order.

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