TaxTMI 
TaxTMI 
2020 (8) TMI 27
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Second Appeal No.339 and 340 of 2016, which is admitted by this Court and is pending for hearing. 3. The Co-ordinate Bench of this Court on 12.06.2019 passed the following order : "The draft amendment is allowed. The same shall be carried out at the earliest. Let Notice be issued to the respondents, returnable on 19th June 2019. Direct service is permitted." Thereafter, fresh Notice was issued to the respondents, returnable on 4th July 2019 by order dated 20.06.2019. Thereafter, this court passed the following order on 09.01.2020:- "Having regard to the nature of this litigation, more particularly, the reliefs prayed for in this writ application, we are of the view that we should take up Tax Appeal No.652 of 2017 for hearing at the earliest. Let Tax Appeal No.652 of 2017 be notified along with this petition on 16th January, 2020." 4. In view of the aforesaid order, both the Special Civil Application No.8391 of 2019 and Tax Appeal No. 652 of 2017 are notified together and were heard analogously and are being disposed of by this common judgment. 5. Tax Appeal No.652 of 2017 is admitted for consideration of the substantial questions of law vi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ncerned as to whether what would be the amount of tax or rate of tax payable on the invoice raised by the petitioner. The recipient of the goods/machineries did not issue Form 'C' as required under the provisions of the Central Sales Tax Act, 1956 (for short the "CST Act") since a fixed price towards consideration of the goods supplied was to be paid in spite of there being an inter-state transaction. The petitioner therefore, had paid tax at the rate of 10% or 12.5% instead of paying the same at the rate of 4% in absence of Form 'C' under the CST Act by making a reverse working in accordance with Section 8A of the CST Act. (iv) According to petitioner such mistake on the part of the petitioner resulted into excess deposit of tax amounting to Rs. 1,81,49,641/-. It is the case of the petitioner that the authorities from the Central Sales Tax Department were supposed to refund the said amount to the petitioner as the petitioner would be liable to pay only 4% tax and not 10 0r 12.5% tax on the invoice price of the goods/machineries sold by it. (v) It appears that the petitioner was assessed by the Assistant Commissioner of Commercial Tax, Ghatak-4, respondent No.2 under Section ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ad erred in applying section 31 of the GVAT Act to the excess collection under the CST Act though there is no enabling provision in the CST Act, the first appellate authority, a quasi-judicial authority, has all along been silent on this issue. (21) The appellant has submitted that it has, by mistake, made this excess payment to the tune of Rs. 1,81,49,641/- and that it was the mistake of his late tax consultant. We cannot buy this argument simply because the prices charged in the running bill issued in 2007-08 were inclusive of tax, and the tenders, subsequent quotations, etc for this contract had happened long back, perhaps in the year 2005-06 or 2006-07 (Tender no. date, quotation no., date, etc are not provided by any of the parties) when there was even no talk of the amendment likely to be made in Section 8(2) of the CST Act from 01-042007. Thus, during pre amendment period, when the tender was published and quotation was submitted, nobody knew that the rate of tax for the inter-State transaction without the support of Form C would be going to be 4% with effect from 01-04-2007 as against the rate of tax of 10% / 12.5 % prevalent during pre-amendment period. This means....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... such a case. We are supported in this view by another decision of this Tribunal in the case of Asian Paints Industrial Coatings Limited (supra) wherein, relying on the Bombay High Court judgment in the case of Ramkrishna Kulvantrai (supra) and the Apex Court judgment in the case of Khemka & Co (supra), it is decided that in such a situation, it was not open to the department either to forfeit the amount which according to the department was collected by way of sales tax or to levy a penalty on the appellant in respect thereof. It was only open to the State to prosecute the appellant, if at all; any case is made out under section 10(f) of the CST Act. (23) Section 9A of the CST Act, prohibiting collection of tax save under the provisions of the CST Act, reads as under: "9A. Collection of tax to be only by registered dealers. No person who is not a registered dealer shall collect in respect of any sale by him of goods in the course of inter-State trade or commerce any amount by way of tax under this Act, and no registered dealer shall make any such collection except in accordance with this Act and the rules made there under." (24) There are two se....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the authority who granted to him a certificate of registration under this Act may, after giving him a reasonable opportunity of being heard, by order in writing, impose upon him by way of penalty a sum not exceeding one and a half times the tax which would have been levied under sub-section (2) of section 8 in respect of the sale to him of the goods, if the sale had been a sale falling within that sub-section; Provided that no prosecution for an offence under section 10 shall be instituted in respect of the same facts on which a penalty has been imposed under this section. (2) The penalty imposed upon any dealer under sub-section (1) shall be collected by the Government of India in the manner provided in subsection (2) of section 9 - (a) in the case of an offence falling under clause (b) or clause (d) of section 10, in the State in which the person purchasing the goods obtained the form prescribed for the purposes of sub-section (4) of section 8 in connection with the purchase of such goods; (b) in the case of an offence falling under clause (c) of section 10, in the State in which the person purchasing the goods should have registered himself if the off....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ere fact that there is machinery for assessment, reassessment, collection and enforcement of tax and penalty in the State Act does not mean that the provision for penalty in the State Act is treated as penalty under the Central Act. The meaning of penalty under the Central Act cannot be enlarged by the provisions of machinery of the State Act incorporated for working out the Central Act. Per Beg, J. - Whatever may be the objects of levying a penalty, its imposition gives rise to a substantive liability which can be viewed either as an additional tax or as a fine for the infringement of the law. The machinery or procedure for its realization comes into operation after its imposition. In any case, it is an imposition of a pecuniary liability which is comparable to a punishment for the commission of an offence. It is a well-settled canon of construction of neither statutes that neither a pecuniary liability can be imposed nor an offence created by mere implication. It may be debatable whether a particular procedural provision creates a substantive right or liability. But the imposition of a pecuniary liability, which takes the form of a penalty or fine for a breach of a legal....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as, relying on the special provisions in section 46A of the Kerala General Sales Tax Act read with rule 31D of Kerala General Sales Tax Rules, 1963 for reimbursement of excess tax collected by the dealer, decided that the provisions of local Act can be applied for forfeiture of tax under the CST Act. There is also no discussion by the Kerala High Court of the decision on the subject of the Hon'ble Apex Court in Khemka 15 & Company (supra). Therefore, Leo Engineering (India) (supra) is not applicable to the facts of the appellant's case. (30) In view of the above discussion, we conclude that the appellant has collected excess tax to the tune of Rs. 1,81,49,641/- contravening the provisions of the Central Sales Tax Act, 1956, however, since, unlike the GVAT Act, the CST Act does not provide for forfeiture of such excess tax, the order of the first appellate authority, confirming the forfeiture of tax by the assessing authority, is required to be set aside. We also allow the appellant's plea under the GVAT Act for rectification of TDS amount of Rs. 22,287/- in absence of any adverse evidence produced by the department. We, therefore, pass the following order: ORDER ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... completion of order. The respondent-assessee with a view to facilitate payment of excise duty and central sales tax had also prepared excise invoices showing sale value of materials, excise duty and central sales tax separately by making reverse working from the total "inclusive of tax" price. The assessee without considering the amendment in the provisions under Section 8(2) of the Central Sales Tax Act w.e.f. 1st April 2007 in respect of the applicable rate of tax, mistakenly considered the applicable rate of tax at 10%/12.5% instead of correct rate of 4% while making reverse working in its sales invoices. The respondent-assessee therefore, deposited excess central sales tax of Rs. 1,81,49,641/- along with returns. 12. Mr. Chintan Dave, the learned AGP submitted that Assessing Officer, during the course of assessment proceedings for the year 2007-08 has rightly forfeited the alleged excess amount of Central Sales Tax deposited by the respondent-assessee under Section 9(2) of the Central Sales Tax Act read with Section 31 of the GVAT Act, on the ground that in the commercial invoices prepared by the respondent- assessee, the tax amount is shown separately and therefore, such t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the assessee cannot be refunded as the assessee would not be in position to pass the same and hence it is rightly forfeited. 13. On the other hand, the learned advocate Mr. D.K. Trivedi appearing for the assessee submitted that the assessee was not supposed to reflect separately the tax component in the invoices raised by it as price fixed was inclusive of tax and assessee was liable to pay only appropriate tax payable in accordance with law as the receiver Company was not concerned with regard to amount of tax to be paid by the assessee as the price was fixed irrespective of the amount of tax payable or irrespective of any other expenses, which were to be incurred by the assessee. 13.1 It was further submitted that considering fixed price payable for the goods supplied was arrived at and the recipient of goods never issued Form "C" for the goods received by them despite there being interstate transactions and were eligible to issue such tax concession forms and in such situation Section 8A of the Central Sales Tax Act provides for determining the tax liability of the vendor that the price is fixed at inclusive of tax and it is for the vendor like assessee to identify tax pa....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the duty collected by the assessee would not be passed on to the consumer and therefore, if any, refund would be paid, the assessee would be unjustly enriched. However, as against that as far as CST is concerned, there is no provision pertaining to forfeiture of refund resulting into unjust enrichment. 13.5 It was also submitted upon the global tender and subsequent negotiations, the assessee entered into a contract, whereby it was supposed to supply the goods to the buyer/receiver at specific price which would not be affected by tax paid/payable by the assessee and by applying the provision of Section 8A of the CST Act, the assessee arrived at tax payable on reverse working of the price charged to calculate the tax component imbedded therein. It was therefore, submitted that the amount of tax calculated by the respondent-assessee cannot be said to have been collected by it over and above the actual amount of tax payable by the assessee and the excess amount of CST deposited was due to the difference in the rate of the CST which has come into effect from 01.04.2007. 13.6 It was therefore, submitted that the Tribunal has rightly held that the respondent-assessee is entitled t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gistered dealer purchasing the goods, being containers or materials intended for being used for the packing of goods for sale; (d) are containers or other materials used for the packing of any goods or classes of goods specified in the certificate of registration referred to in [***] clause (b) or for the packing of any containers or other materials specified in the certificate of registration referred to in clause (c). (4) The provisions of sub-section (1) shall not apply to any sale in the course of inter-State trade or commerce unless the dealer selling the goods furnishes to the prescribed authority in the prescribed manner a declaration duly filled and signed by the registered dealer to whom the goods are sold containing the prescribed particulars in a prescribed form obtained from the prescribed authority: Provided that the declaration is furnished within the prescribed time or within such further time as that authority may, for sufficient cause, permit.] (5) Notwithstanding anything contained in this section, the State Government may 2 [on the fulfillment of the requirements laid down in sub- section (4) by the dealer] if it is satisfied t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....le of goods made in the course of inter-State trade or commerce unless the dealer selling such goods furnishes to the 10[prescribed authority referred to in sub section (4) a declaration in the prescribed manner on the prescribed form obtained from the authority specified by the Central Government under sub- Explanation- For the purposes of subsection (6), the expression "special economic zone" has the meaning assigned to it in clause (iii) to Explanation 2 to the proviso to section 3 of the Central Excise Act, 1944 (1 of 1944).] (8A) Determination of turnover.- (1) In determining the turnover of a dealer for the purpose of this Act, the following deductions shall be made from the aggregate of the sale prices, namely:- (a) the amount arrived at by applying the following formula- rate of tax x aggregate of sale Prices _ 100 + rate of tax Provided that no deduction on the basis of the above formula shall be made if the amount by way of tax collected by a registered dealer, in accordance with the provisions of this Act, has been otherwise deducted from the aggregate of sale prices. Explanation- Where the turnover of a dealer is taxabl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n effected. (2) Subject to the other provisions of this Act and the rules made thereunder, the authorities for the time being empowered to assess, re-assess, collect and enforce payment of any tax under general sales tax law of the appropriate State shall, on behalf of the Government of India, assess re-assess, collect and enforce payment of tax, including any 5 [interest or penalty,] payable by a dealer under this Act as if the tax or interest or penalty payable by such a dealer under this Act is a tax or interest or penalty payable under the general sales tax law of the State; and for this purpose they may exercise all or any of the powers they have under the general sales tax law of the State; and the provisions of such law, including provisions relating to returns, provisional assessment, advance payment of tax, registration of the transferee of any business, imposition of the tax liability of a person carrying on business on the transferee of, or successor to, such business, transfer of liability of any firm or Hindu undivided family to pay tax in the event of the dissolution of such firm or partition of such family, recovery of tax from third parties, appeals, review....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rade or commerce any amount by way of tax under this Act, and no registered dealer shall make any such collection except in accordance with this Act and the rules made thereunder.] 10. Penalties.- If any person- (a) furnishes [***] a certificate or declaration under sub-section (2) of section 6 or sub-section (1) of section 6A or sub-section (4) or sub-section (8) of section 8, which he knows, or has reason to believe, to be false; or (aa) fails to get himself registered as required by section 7 or fails to comply with an order under subsection (3A) or with the requirements of sub-section 3(C) or sub-section (3E) of that section;] (b) being a registered dealer, falsely represents when purchasing any class of goods that goods of such class are covered by his certificate of registration; or (c) not being a registered dealer, falsely represents when purchasing goods in the course of inter State trade or commerce that he is a registered dealer; or (d) after purchasing any goods for any of the purposes specified in 1 [clause (b) or clause (c) or clause (d)] of subsection (3) 2 [or sub section (6)] of section 8 fails, without....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e facts of the case the rate of CST applicable for the goods supplied by the respondent-assessee is 4%. Therefore, 4% tax is required to be applied on the turnover as calculated under Section 8A of the CST Act. As observed above, the respondent-assessee deposited the CST at the rate of 10%/12.5% by making reverse working of the turnover under Section 8A of the CST Act. The correct amount of tax payable would be therefore, much less than what the respondent-assessee has deposited. This has resulted into the excess amount of tax deposited by the respondent-assessee amounting to Rs. Rs. 1,81,49,641/-. 14.2 Moreover, on perusal of the facts on record and as per the findings of fact given by the Tribunal, it cannot be said that that the respondent-assessee has collected the excess amount of CST from its buyer/receiver of the goods. As per the terms of the contract the respondent-assessee was issuing running bills at a fixed price but prepared the commercial invoices for the purpose of payment of excise duty and the CST, but ultimately has received the fixed price only. 14.3 The Apex Court while upholding the Constitutional validity of Section 9(2A) of the CST Act has held as under....
X X X X Extracts X X X X
X X X X Extracts X X X X
....curs the penalty for not filing a return and the measure of penalty is the same as under the State law. If a person is liable to pay penalty at a particular rate in addition to the tax for not paying any part of the tax due under a State law within the specified time, a person liable to pay tax under the Act becomes liable to pay the penalty at the same rate if he commits default in paying the tax due under the Act. We do not, therefore, find any lacuna in the language of sub- section (2-A) of section 9 of the Act which makes the provisions relating to penalties under the general sales tax laws of the respective States inapplicable even now to the proceedings under the Act. While sub-section (2-A) of section 9 of the Act makes the provisions relating to both offences and penalties in the general sales tax laws of States applicable to the proceedings under the Act prospectively, section 9 of the Amending Act makes all the provisions relating to penalties only in the general sales tax laws of the States applicable to the proceeding under the Act retrospectively by adopting the same language appearing in subsection (2-A) of section 9 of the Act. This pattern of legislation had to be a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion is relevant and necessary for the purpose of advancing the objects and purposes of the legislation. In the instant case we should bear in mind the history of the central sales tax legislation and its object and purpose. The central sales tax levied on inter-State sales is assigned under Article 269 of the Constitution to the States who are the true beneficiaries. The assessees under the Act who are spread over various States are accustomed to the general pattern of sale tax law in their respective States and the various duties and responsibilities of an assessee who is liable to pay sales tax. The officers who assess and collect the tax under the Act are the officers who discharge similar functions under the State laws. In this situation if Parliament has, with the knowledge of the various provisions relating to offences and penalties in the general sales tax laws of the various States, adopted them for purposes of assessment, reassessment, collection and enforcement of the provisions of the Act it cannot be said that it has abdicated its legislative functions. In this connection it is necessary to refer to the decision of this Court in State of Madras v. N. K. Nataraja Mudali....
X X X X Extracts X X X X
X X X X Extracts X X X X
....scribed for goods referred to in s 8 (1) and (2) are the operative rates for those transactions: in respect of transactions falling within s 8 (2) (b) the rate is determined by the State rate except where the State rate is between the range of two and seven per cent. The rate which a State legislature imposes in respect of inter-State transactions in a particular commodity must depend upon a variety of factors. A State may be led to impose a high rate of tax on a commodity either when it is not consumed at all within the State, or if it feels that the burden which is falling on consumers within the State will be more than offset by the gain in revenue ultimately derived from outside consumers. The imposition of rates of sales tax is normally influenced by factors political and economic. If the rate is so high as to drive away prospective traders from purchasing a commodity and to resort to other sources of supply, in its own interest the State will adjust the rate to attract purchasers ...Again, in a democratic constitution political forces would operate against the levy of an unduly high rate of tax. The rate of tax on sales of a commodity may not ordinarily be based on arbitrary ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... authorising the State from which the movement of goods commences to levy on transactions of sale Central sales-tax, at rates prevailing In the State, subject to the limitation already set out, in our judgment, no discrimination can be deemed to be practised." 14.4 The Apex Court in the case of M/s. Khemka and Co.(Agencies) Pvt. Ltd (supra) has held as under:- "For the foregoing reasons we are of opinion that the provision in the State Act imposing penalty for non-payment of income-tax within the prescribed time is not attracted to impose penalty on dealers under the Central Act in respect of tax and penalty payable under the Central Act. There is no lack of sanction for payment of tax. Any dealer who would not comply with the provisions for payment of tax, would be subjected to recovery proceedings under the Public Demands Recovery Act. A penalty is a statutory liability. The Central Act contains specific provisions for penalty. Those are the only provisions for penalty available against the dealers under the Central Act. Each State Sales Tax Act contains provisions for penalties. These provisions in some cases are also for failure to submit return or failure to regist....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed except as provided for under sub-section (3) of section 29-A of the Act. Section 8-A (2) of the Act provides that dealer may recover an amount equivalent to the amount of trade tax on sale of goods payable from the person to whom the goods are sold by him. Clause II of sub-section (4) of Section 8-A of the Act further provides that where a registered dealer realises trade tax on sale of goods from the purchasers the cash memos or the bills shall separately show the price of goods sold and the amount realised as tax. 9. From the perusal of the aforesaid provisions of Section 29-A of the Act read with Section 8-A of the Act, it appears that the amount realised as trade tax and shown separately in the cash memos or bills in excess of tax payable, shall be retained by the State and not refunded to the person who had realized it. 10. In the present case the applicant has not realised any tax in the bills of cash memos. 11. Therefore, neither the provisions of Section 8-A (2) of the Act applies nor there is any contravention of the said provisions and, therefore, Section 29-A of the Act has no application. 12. For the foregoing discussion, in view o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rest" in Section 9(2) occur in what may be called the letter part thereof. Section 9(2) authorises the sales tax authorities of a State to assess, reassess, collect and enforce payment of the Central sales tax payable by a dealer as if it was payable under the State Act; this is the first part of Section 9(2). By the second part thereof, these authorities are empowered to exercise the powers they have under the State Act and the provisions of the State Act, including provisions relating to charging and payment of interest, apply accordingly. Having regard to what has been said in the case of Khemka & Co., it must be held that the substantive law that the States' sales tax authorities must apply is the Central Act. In such application, for procedural purposes alone, the provisions of the State Act are available. The provision relating to interest in the latter part of Section 9(2) can be employed by the States' sales tax authorities only if the Central Act makes a substantive provision for the levy and charge of interest on Central sales tax and only to that extent. There being no substantive provision in the Central Act requiring the payment of interest on Central sales tax....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t the collection of Central sales tax on the transactions of Rs. 99,640, which were held to be not sales, did not amount to contravention of the said section 9A ? (3) Assuming that such collection of Central sales tax on the transactions of Rs. 99,640 did not contravene the provisions of section 9A of the Central Sales Tax Act, 1956, whether the forfeiture of such tax was permissible in law by virtue of section 46 and section 37 of the Bombay Sales Tax Act, 1959, read with section 9(2) of the Central Sales Tax Act, 1956, as amended by the Central Sales Tax (Amendment) Act, 1969 ? (4) If it is held that such collection of Central sales tax on the transactions of Rs. 99,640 was in contravention of section 9A of the Central Sales Tax Act, 1956, whether the forfeiture of such tax was permissible in law by virtue of section 37 of the Bombay Sales Tax Act, 1959, read with section 9(2) of the Central Sales Tax Act, 1956, as amended by the Central Sales Tax (Amendment) Act, 1969 ?" 6. In view of the judgment of the Supreme Court referred to above, Mr. Desai on behalf of the petitioner has stated that he does not press before us questions Nos. (1), (3) and (4) but....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ade or commerce". It does not talk of any amount collected by way of tax in respect of any purported sale or any transaction which is a purported sale. If there is no sale by one man to another, the question of collecting any tax on it either rightfully or wrongfully under the said Act does not and cannot arise. 7. We are also unable to see how any reference can now lie in this matter. Mr. Desai, the learned counsel for the petitioner, has frankly conceded that in view of the abovementioned decision of the Supreme Court, the department cannot forfeit the said sum of Rs. 19,928 nor can it levy any penalty on the respondents. Mr. Desai's contention, however, was that the one remedy still left open to the department is to prosecute the respondents. Thus, according to Mr. Desai, this order now affects the liability of the respondents to be prosecuted under section 10 of the Central Sales Tax Act, 1956, for having committed an offence defined in clause (f) thereof. Under section 61(1) of the Bombay Sales Tax Act, 1959, which applies by reason of the provisions of section 9(2) of the Central Sales Tax Act, 1956, a reference can only lie in respect of a question of law arisin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Central Excises and Customs Laws (Amendment) Act, 1991 or thereafter - by misinterpreting or misapplying the provisions of the Central Excises and Salt Act, 1944 read with Central Excise Tariff Act, 1985 or Customs Act, 1962 read with Customs Tariff Act or by misinterpreting or misapplying any of the rules, regulations or notifications issued under the said enactments, such a claim has necessarily to be preferred under and in accordance with the provisions of the respective enactments before the authorities specified thereunder and within the period of limitation prescribed therein. No suit is maintainable in that behalf. While the jurisdiction of the High Courts under Article 226 - and of this Court under Article 32 - cannot be circumscribed by the provisions of the said enactments, they will certainly have due regard to the legislative intent evidenced by the provisions of the said Acts and would exercise their jurisdiction consistent with the provisions of the Act. The writ petition will be considered and disposed of in the light of and in accordance with the provisions of Section 11-B. This is for the reason that the power under Article 226 has to be exercised to effectuate the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....so by virtue of Section 72 of the Contract Act. In such cases, period of limitation would naturally be calculated taking into account the principle underlying clause (c) of subsection (1) of Section 17 of the Limitation Act, 1963. A refund claim in such a situation cannot be governed by the provisions of the Central Excises and Salt Act or the Customs Act, as the case may be, since the enactments do not contemplate any of their provisions being struck down and a refund claim arising on that account. In other words, a claim of this nature is not contemplated by the said enactments and is outside their purview. (iii) A claim for refund, whether made under the provisions of the Act as contemplated in Proposition (i) above or in a suit or writ petition in the situations contemplated by Proposition (ii) above, can succeed only if the petitioner/plaintiff alleges and establishes that he has not passed on the burden of duty to another person/other persons. His refund claim shall be allowed/decreed only when he establishes that he has not passed on the burden of the duty or to the extent he has not so passed on, as the case may be. Whether the claim for restitution is treated as a....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... matter Section 17(1)(c) of the Limitation Act, 1963, has no application to such a claim for refund. (v) Article 265 of the Constitution has to be construed in the light of the goal and the ideals set out in the Preamble to the Constitution and in Articles 38 and 39 thereof. The concept of economic justice demands that in the case of indirect taxes like Central Excises duties and Customs duties, the tax collected without the authority of law shall not be refunded to the petitioner-plaintiff unless he alleges and establishes that he has not passed on the burden of duty to a third party and that he has himself borne the burden of the said duty. (vi) Section 72 of the Contract Act is based upon and incorporates a rule of equity. In such a situation, equitable considerations cannot be ruled out while applying the said provision. (vii) While examining the claims for refund, the financial chaos which would result in the administration of the State by allowing such claims is not an irrelevant consideration. Where the petitioner-plaintiff has suffered no real loss or prejudice, having passed on the burden of tax or duty to another person, it would be unjust to al....
X X X X Extracts X X X X
X X X X Extracts X X X X
....with the provisions of Section 11-B. This is for the reason that the power under Article 226 has to be exercised to effectuate the regime of law and not for abrogating it. Even while acting in exercise of the said constitutional power, the High Court cannot ignore the law nor can it override it. The power under Article 226 is conceived to serve the ends of law and not to transgress them. (xi) Section 11-B applies to all pending proceedings notwithstanding the fact that the duty may have been refunded to the petitioner/plaintiff pending the proceedings or under the orders of the Court/Tribunal/Authority or otherwise. It must be held that Union of India v. Jain Spinners and Union of India v. ITC have been correctly decided. It is, of course, obvious that where the refund proceedings have finally terminated - in the sense that the appeal period has also expired - before the commencement of the 1991 (Amendment) Act (19-91991), they cannot be reopened and/or governed by Section 11-B(3) [as amended by the 1991 (Amendment) Act]. This, however, does not mean that the power of the appellate authorities to condone delay in appropriate cases is affected in any manner by this clarific....