Judgment

SHAH, J. : Messrs. Burmah Construction Company- a firm carrying on business as building and works contractors executed sevral contracts in the state of Orissa for construction of buildings, roads, bridges etc. Messrs.Burmah Construction Company, who are hereinafter referred to as the appellants, were registered as dealer in Orissa under the Orissa Sales Tax Act, 1947 from the quarters ending June 30, 1949. The sales Tax Officers treating the transfer of the materials used in the construction of the buildings, roads and bridges, as sale of goods, assessed the appellants to tax under the Orissa sales Tax Act. The tax so assessed under the diverse orders of assessment was paid from time to time. For the quarters ending June 30, 1949 to March 31, 1954 the appellant paid Rs. 1,17,869-8-0 as tax and Rs. 2,917-11-0 as penalty. The following table sets out the tax and penalty Paid to the sales Tax Authorities for the twenty. quarters :

Srl. No. Circle Name Registration No. Tax paid Penalty paid Total Amount paid.

Rs. A. P. Rs. A. P. Rs. A. P.

1. PU II 1755 35336 7 0 350 0 0 35686 7 0

2. BA 1596 53990 6 6 310 0 0 54300 5 6

3. BA 1596A 2719 3 0 ... 2719 3 0

4. MB 806 3376 6 0 1352 4 0 4728 10 0

5. BP 1560 5349 1 0 ... 5349 1 0

6. CU III 1375 10913 12 0 905 7 0 11819 3 0

7. CU I 3940 6184 6 0 ... 6184 6 0

117869 8 6 2917 11 0 120787 3 6

2. Relying upon the judgment of the Madras High Court in Gannon Dunkerly & Co,, Ltd. v. State of Madras, 1954-5 STC 216 the appellants applied on August 9, 1954 to the High Court of Judicature, Orissa for

(a) a declaration that the provisions of the Orissa Sales Tax Act, 1947 authorising imposition of the sales tax on a turnover of works contracts and repair works were ultra virus the State Legislature;

(b) a declaration that the assessment made by the State Sales Tax Authorities on the appellant s works contracts which had resulted in payment of Rs. 1,20,787-3-6 by way of sales tax and penalties for different quarters were without jurisdiction and illegal and liable to be quashed and that the appellant was entitled to get refund of the said amount;

(c) a direction restraining the state and its sales Tax Officers from taking any steps in making any further assessment or complete the assessments pending before them in respect of the appellant s works contracts with the state Government and levying and collecting any sales tax from the appellant on works contracts; and

(d) issue of appropriate writ or directions directing the state of Orissa and its sales Tax Officers to refund the amount of sales tax and penalties realised from the appellant.

3. Following the judgment of this Court in the State of Madras v. Gannon Dunkerly & Co., Ltd.,1959 SCR 379 ; which confirmed the decision of the Madras High Court in 1954-5 STC 216 the High Court declared that the assessment of sales tax was not in accordance with law and directed that no steps either by certificate proceedings or otherwise should be taken to realise the arrears of sales tax in respect of those contracts. The High Court also directed refund of tax paid, if recovery thereof was not barred under S.14 of the Orissa Sales Tax Act, 1947 on the date of the filing of the application. The High Court also directed the Sales Tax Authorities to revise the assessments made in the light of the decision of this Court in respect of assessments made after the date of the petition. The appellants have appealed to this Court with special leave challenging the order in so far as their claim for refund is partially declared to be barred by the rule of limitation prescribed by S. 14 of the Orissa Sales Tax Act.

4. The appellants challenge the correctness of the order declaring that the portion of the tax paid refund whereof is beyond the period of limitation under S. 14 of the Orissa Sales Tax Act, 1947 on the date of the filing of the application under Art, 226, as not refundable on two grounds:

(1) that S. 14 of the Act is ultra vires the State Legislature:

(2) th