Retrospective tax refund restriction upheld where only the person who bore the burden may claim refund.

Retrospective insertion of section 14A barred a dealer from claiming refund of sales tax collected from purchasers and paid under mistake of law, because refund was confined to the person who actually bore the burden and the limitation in section 14 applied. The provision was treated as an ancillary incident of the State's taxing power, covering collection and refund machinery, so it fell within legislative competence. It was also regarded as a reasonable public-interest restriction because it prevented the dealer from retaining tax that did not beneficially belong to it. The amendment was therefore upheld as constitutionally valid.

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Issues: (i) Whether the retrospective insertion of section 14A validly denied the dealer's claim for refund of sales tax collected and paid under mistake of law. (ii) Whether the impugned provision was within the legislative competence of the State Legislature and was saved as a reasonable restriction under Article 19(1)(f) of the Constitution of India.

Issue (i): Whether the retrospective insertion of section 14A validly denied the dealer's claim for refund of sales tax collected and paid under mistake of law.

Analysis: The amendment provided that where tax had been paid by a dealer, refund could be claimed only by the person from whom the amount had actually been realised, and the limitation in section 14 would apply. The effect of the provision was to take away the dealer's claim to refund of amounts collected from purchasers and paid into the State treasury. The Court treated the amendment as directly governing the refund claim and as defeating the assessees' attempt to recover the tax from the State.

Conclusion: The dealer's refund claim was not maintainable in view of section 14A.

Issue (ii): Whether the impugned provision was within the legislative competence of the State Legislature and was saved as a reasonable restriction under Article 19(1)(f) of the Constitution of India.

Analysis: The power to legislate on sales tax included the power to make ancillary provisions for collection, machinery, and refund. The restriction that refund should go only to the persons who had borne the burden of the tax was held to be within that ancillary power. The Court further held that, even assuming a restriction on the right to property, the provision was in the interest of the general public because the tax collected from purchasers did not beneficially belong to the dealer and the law prevented unjust gain by the dealer.

Conclusion: The provision was within legislative competence and was constitutionally valid.

Final Conclusion: The retrospective amendment defeated the assessees' refund claims, and the State's position was upheld while the assessees' appeals failed.

Ratio Decidendi: A legislature competent to enact a taxing statute may, as an ancillary incident of that power, validly provide that refund of wrongly collected tax shall be claimable only by the person who actually bore the burden, and such a restriction is constitutionally permissible if it serves the public interest.

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