Luxury tax exemption still requires unjust enrichment scrutiny before refund or retention can be decided.

Luxury tax under the Tamil Nadu Tax on Luxuries Act, 1981 was treated as not payable in light of the later exemption notification and the Supreme Court's view on the nature of the levy, so the assessment could not stand in its existing form. However, the authority was still required to examine whether the petitioner had passed on the tax burden and whether retention or refund was barred by unjust enrichment. Because no notice had been given on that issue, the High Court set aside the order and remitted the matter for fresh consideration after issuing notice on unjust enrichment.

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Issues: Whether the luxury tax assessment order was liable to be set aside and the matter remitted for fresh consideration in view of the exemption notification and the question of unjust enrichment.

Analysis: The levy arose under the Tamil Nadu Tax on Luxuries Act, 1981 as amended, but the Government had subsequently issued the exemption notification under Section 23-A(1) of the Act. The Court noted that the tax was not payable in view of the exemption and the Supreme Court's ruling on the nature of luxury tax. However, the Court also held that the question whether the petitioner had passed on the incidence of tax and whether retention of the amount was barred by unjust enrichment required examination. Since the respondent had not called upon the petitioner to show cause on this aspect, a fresh decision was necessary.

Conclusion: The impugned order was set aside and the matter was remanded to the respondent for fresh consideration after issuing notice on unjust enrichment; the writ petition was therefore allowed in part.

Final Conclusion: The tax demand did not survive in its present form, but the entitlement to retain or refund the amount was left open for reconsideration by the assessing authority.

Ratio Decidendi: Where tax is found to be not payable because of an exemption or later legal position, the authority must still examine unjust enrichment before directing refund or retention, and failure to do so warrants remand for fresh adjudication.

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