Refund of excess Central Sales Tax allowed where no statutory forfeiture power existed and tax burden was not passed on.

Excess Central Sales Tax paid on reverse calculation from an inclusive price could not be forfeited where the assessee had contracted at a fixed price, had not separately recovered the tax from the buyer, and had deposited tax above the amount legally payable under Section 8A of the Central Sales Tax Act. The Gujarat VAT machinery provisions could not be used to create a forfeiture power under the CST regime in the absence of an express statutory basis. As no passing on of the burden was shown and unjust enrichment did not assist the Revenue on these facts, the assessee was entitled to refund of the excess amount.

---

---

Issues: Whether excess Central Sales Tax paid on reverse calculation from an inclusive price could be forfeited under the Central Sales Tax Act and the Gujarat Value Added Tax Act, and whether the assessee was entitled to refund of the excess amount.

Analysis: The turnover had to be determined under the formula in Section 8A of the Central Sales Tax Act, 1956, and the applicable rate was 4% for the relevant transactions. The assessee had mistakenly worked out tax at 10%/12.5%, resulting in excess deposit. The record showed that the assessee had contracted on a fixed inclusive price and had not separately recovered the excess tax from the buyer. The Central Sales Tax Act contains no express provision authorising forfeiture of such excess collection, and the machinery provisions of the State enactment could not be invoked to create a forfeiture power under the Central Act. The principles governing refund and unjust enrichment did not assist the Revenue on these facts because there was no passing on of the burden and no statutory basis for forfeiture under the CST regime.

Conclusion: The excess Central Sales Tax could not be forfeited, and the assessee was entitled to refund of the amount deposited in excess of the tax legally payable.

Ratio Decidendi: In the absence of an express statutory provision under the Central Sales Tax Act authorising forfeiture of excess tax collected or deposited, State forfeiture provisions cannot be applied to defeat a refund claim where the assessee has not passed on the tax burden to the buyer.

---