1965 (4) TMI 93

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e Court was delivered by   WANCHOO, J.-This is an appeal on a certificate granted by the Kerala High Court and relates to refund of sales tax collected by the appellant, State of Kerala, from the respondent. It appears that sales tax was assessed on the appellant by an order dated May 7, 1951. That order related to two periods, the second being from May 30, 1950, to March 31, 1951. The respondent in its writ petition claimed refund of Rs. 80,048-13-6 with respect to both the periods on the ground that sales on which this tax had been levied were exempt from tax under Article 286(1)(a) of the Constitution as it then stood. In the present appeal however we are concerned only with refund of Rs. 54,375-5-0 in respect of which relief ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....es tax by mistake and was entitled to refund as sales outside the State were not liable to tax under Article 286 of the Constitution as it then stood. The petition was opposed on behalf of the appellant and it was urged that the respondent was estopped from claiming any refund because it had paid the tax voluntarily. A number of other points were also raised on behalf of the appellant of which it is only necessary to mention that after some hesitation the appellant had contend- ed that the sales were not outside sales and therefore not exempt under Article 286 of the Constitution. The High Court rejected the contention that the respondent was estopped from claiming refund even if the payment of tax had been made by mistake and relied ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....en subject to the same restrictions and also to the period of limitation (see Article 96 of the Limitation Act, 1908), namely, three years from the date when the mistake becomes known to the person who has made the payment by mistake (see State of Madhya Pradesh v. Bhailal A.I.R. 1964 S.C. 1006; 15 S.T.C. 450.). In this view of the matter it was the duty of the State to investigate the facts when the mistake was brought to its notice and to make a refund if mistake was proved and the claim was made within the period of limitation. But as we have already indicated, the State refused to investigate the matter and also to make a refund on the ground that accounts for the year ending March 31, 1951, had been closed. It was in these circumstance....