Sales tax liability survives absent assessment, and validation legislation can preserve levies despite later challenges.

Jurisdiction was treated as arising from material facts pleaded at Calcutta, including payment by cheque drawn on a Calcutta bank and the place where repayment was claimed. On the tax issue, liability under the Bihar sales tax charging provisions was treated as distinct from assessment machinery; the Continuance Order preserved the levy for the earlier period, and the Sales Tax Validation Act, 1956 validated levies and collections for the later period even where assessment orders were absent or set aside. The alleged mistake in payment was not proved, because the tax was legally due when paid, and the mistake-based claim was time-barred. The refund claim therefore failed.

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Issues: (i) whether the court had jurisdiction on the pleaded facts; (ii) whether the assessee was entitled to refund of sales tax paid for the relevant periods in view of the Bihar sales tax provisions, the Sales Tax Continuance Order, 1950, and the Sales Tax Validation Act, 1956; (iii) whether the payments were made under mistake; and (iv) whether the claim was barred by limitation.

Issue (i): whether the court had jurisdiction on the pleaded facts.

Analysis: The pleaded facts included payment by cheque drawn on a Calcutta bank, receipt of the appellate order at Calcutta not being disproved, and the defendant's obligation to repay at the creditor's place. The objection that notice under section 80 of the Code of Civil Procedure formed part of the cause of action was rejected. The payment and the place where repayment was claimed were treated as material facts giving rise to jurisdiction.

Conclusion: Jurisdiction was upheld in favour of the plaintiff.

Issue (ii): whether the assessee was entitled to refund of sales tax paid for the relevant periods in view of the Bihar sales tax provisions, the Sales Tax Continuance Order, 1950, and the Sales Tax Validation Act, 1956.

Analysis: Liability to tax flowed from the charging provisions of the Bihar Sales Tax Act, 1947, and assessment was only machinery for quantification. For the period up to 31 March 1951, the Continuance Order preserved the lawful levy. For the later period, section 2 of the Sales Tax Validation Act, 1956 validated levies and collections, including purported levies, notwithstanding contrary judgments or the setting aside of assessment orders. The absence of an assessment order did not destroy the statutory liability or the validity of the levy.

Conclusion: The claim for refund was rejected.

Issue (iii): whether the payments were made under mistake.

Analysis: The evidence did not establish a mistake at the time of payment. At the relevant time, the tax was lawfully imposed under the prevailing legal position, and the subsequent validation statute confirmed the legality of the levy. A payment cannot be recovered as a mistake when the amount was then legally due or enforceable.

Conclusion: No payment under mistake was proved.

Issue (iv): whether the claim was barred by limitation.

Analysis: A claim based on alleged mistake would run from the date of payment, and was therefore time-barred. A claim founded only on setting aside of the assessment orders was not barred, but that ground failed on merits because no refund was otherwise payable.

Conclusion: The limitation objection succeeded only in relation to the alleged mistake-based claim.

Final Conclusion: The statutory liability to tax was held to survive the absence or setting aside of assessment orders, and the validated levy could not be refunded; the suit therefore failed in entirety.

Ratio Decidendi: Where a tax liability is created by the charging provision, assessment is only machinery for quantification, and a subsequent validation statute can preserve the legality of levies and purported levies notwithstanding the setting aside of assessment orders.

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