TaxTMI 
TaxTMI 
2008 (11) TMI 387
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....sputably had been deposited with the sales tax authorities. 3. On or about December 27, 1999 vide S.R.O. No. 1075/99 the rate of sales tax was reduced from one per cent to 0.5 per cent which was given a retrospective effect from April 1, 1999. The said notification reads thus: "9 Any dealer Sale of bullion and specie to registered dealer within the State. This notification shall be deemed to have come into force on first day of April, 1999 It was given a retrospective effect." 4. The original S.R.O. No. 1728 of 1993 on the subject provided that "tax, if any, collected at the higher rate, shall be paid over to Government and tax, if any, paid over to Government shall not be refunded". Clause 9 of Schedule IV of S.R.O. No. 1728 of 1993 provided as under: "9 Minerals and Metals Corporation of India and Banks Sale of bullion to registered dealers in jewellery for manufacture of gold jewellery within the State for export." This entry in S.R.O. No. 1728 of 1993 stood amended by S.R.O. No. 301 of 1999 to read: "9 Minerals and Metals Corporation of India and Banks Sale of bullion to registered dealers in jewellery for manufacture of gol....
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....arned single judge of the said court by his order dated April 4, 2006 holding: "There cannot be any dispute that the petitioner is entitled to move the Commissioner. Whether the petitioner had to pay any tax in excess of the due rates and if so what is the fate of such excess payment is certainly a dispute. The petitioner has to move the Commissioner for appropriate orders. It will be open to the petitioner to take all available contentions on the claim for refund before the Commissioner. Accordingly, without expressing any opinion as to the merits of the case, this writ petition is disposed of as follows: 'In the event of the petitioner moving the Commissioner (Commercial Taxes), Government of Kerala, Thiruvananthapuram within a period of two months from today, the Commissioner shall consider the issue with notice to the petitioner and the first respondent and take appropriate action in accordance with law in the matter within another four months.' " 9. An intra-court appeal was filed by the first respondent and a Division Bench of the High Court by reason of the impugned judgment dated November 7, 2006 allowed the said writ appeal opining: "W....
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.... to carry out their activity since they would not be eligible for the reduced rate of 0.5 per cent when they buy the material from banks or other first sellers within the State. In the aforementioned situation, the Government had taken a decision to make the said rate of tax applicable when the bullion and specie are sold to any registered dealer within the State. 15. The aforementioned objective on the part of the State would appear from the note appended to S.R.O. No. 1075 of 1999 dated December 27, 1999. It is true that the original Notification S.R.O. No. 1728 of 1993 contained a provision for not refunding the amount of tax collected at a higher rate. 16. Subsequent notification, namely S.R.O. No. 301 of 1999, however, reduced the rate provided the sale is effected within the State for manufacture of ornaments. S.R.O. No. 1728 of 1993, as noticed hereinbefore, was further amended by S.R.O. No. 1075 of 1999, in terms whereof a legal fiction was created giving it a retrospective effect and retroactive operation on or from April 1, 1999. 17. The rate of tax which was applicable on April 1, 1999 by reason of the said legal fiction was, therefore, 0.5 per cent. The effect ....
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....t be refunded. The State, furthermore is bound to act reasonably having regard to the equality clause contained in article 14 of the Constitution of India. 23. It is not even a case where the doctrine of unjust enrichment has any application as it is not the case of the respondent/State that the buyer has passed on the excess amount of tax collected by it to the purchasers. 24. In view of the admitted fact that tax had been collected and paid for the period April 6, 1999 and December 10, 1999 at one per cent of the price which having been reduced from April 1, 1999 to 0.5 per cent, the State, in our opinion, is bound to refund the excess amount deposited with it. 25. Furthermore the notification having been given a retrospective effect must be construed on the touchstone of the purpose and object it sought to achieve. The principle of purposive construction should be applied in a case of this nature to find out the object of the Act. When a statute cannot be considered in such a manner which would defeat its object, the Legislature is presumed to be aware of the consequences flowing therefrom. The statute should be considered in such a manner so as to hold that it serves t....