Judgement

SHAH, J. : By order dated April 17, 1952 the respondent Haji Hasan Dada was assessed by the Assistant Commissioner of Sales Tax, Nagpur Region, to pay tax under the Central Provinces and Berar Sales Tax Act 21 of 1947 on the turnover from his business in yarn for the period November 13, 1947 to November 1, 1948. The respondent paid the amount of tax assessed on July 8,1952. Thereafter relying upon S.13 of the C. P. and Berar Sales Tax Act, 1947 he applied on November 20,1952 to the Assistant Commissioner of Sales Tax for an order refunding Rs. 837/10 on the plea that in the turnover of his business were included dyeing charges which were not taxable under the Act, and which since the order of assessment were held by the Board of Revenue to be not taxable. The Assistant Commissioner rejected the application,and the order was confirmed by the Commissioner of Sales Tax in appeal. The Board of Revenue, Madhya Pradesh, however, set aside the order and ordered that the case be returned to the commissioner "for disposal afresh in the light of the legal principles explained in Gauhar Sheikh Nazir v. The State, 1952 - 3 STC 331 (MP-BR)"

2. During the pendency of the proceedings before the taxing authorities, S. 13 of the Act was amended with retrospective effect. It is claimed by the State that under the amended section the right to obtain refund in cases similar to those under examination was taken away retrospectively.

3. The state of Madhya Pradesh moved the Board of Revenue for a reference under S 23 of the Act to the High Court and the Board or Revenue referred the following three questions:

"1. Is ruling 57 (in Sheikh Gauhar s case 1952 - 3 STC 331 (MP-BR)) good law? In other words, was the Board right in holding that the Privy Council s decision in Commissioner of Income-tax, West Punjab North West Frontier and Delhi Provinces Lahore v. Tribune Trust, Lahore AIR 1948 PC 102, constituted no bar to the examination on merits of claims for refund made under the original S 13 of the Sales Tax Act XXI of 1947 within the time limit mentioned in it?

2. Has S. 24 of Act XX of 1953 been enacted, in so far as it seeks to give retrospective effect to the amended S. 13 of Act XXI of 1947 - as from the very commencement of the latter on 1st June ,1947? and

3. If the answer to question No. 2 is in the affirmative, does sub-section (3) of the new S. 13 constitute a bar to the examination on merits of the claim for refund made by the assessee in the present case?"

The High Court held that by S. 13 of the Act as originally enacted the respondent had "a valuable right to ask for refund of the amount of the tax paid by him in excess of the amount lawfully due" and that "the right to obtain a refund being a substantive right given to the respondent by the statute and not being a matter of mere procedure", this right could not be taken away except by clear and unambiguous words, and S. 13 as amended was not legislation which satisfied that test. The High Court accordingly answered the questions as follows:

"1. Ruling No. 57 is good law, and, in our opinion, the Board was right.

2. Section 24 of Act XX of 1953 has been validly enacted.

3 The new S.13 sub-section (3), does not bar an examination on merits of the claim for refund made on 20th November, 1952 by the assessee."

With special leave the State of Maharashtra upon whom the rights of the State of Madhya Pradesh have devolved by virtue of the States Reorganisation Act, 1956, has appealed to this Court.

4. We are of the view that the first question alone need be answered in this appeal, and on the answer we propose to record the claim made by the respondent must stand rejected. Section 13 of the Act, as originally enacted, and which applied during the year of assessment, read as follows:

"The Commissioner shall, in the prescribed manner and either by cash payment or. at the option of the dealer, by deduction of such excess from the amount of tax due in respect of any other period, refund to a regist