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SUPREME COURT OF INDIA
B.P. Jeevan Reddy and B.L. Hansaria, JJ.
Civil Appeal No. 1412 of 1976
Decided On: 17.02.1994
State of Maharashtra Appellants
Vs.
Kamla Mills Limited and Ors. Respondent
Bombay Act, 1874 - Section 20 - Limitation Act,1963 - Section 14 – Application - writ petition in Bombay High Court being Miscellaneous Petition - However respondent withdrew said writ petition stating that it wishes to pursue remedies provided by statute - Respondent then filed an appeal against order of assessment before Assistant Commissioner Sales Tax with an application for condoning delay - Said authority refused to condone delay and dismissed appeal - Respondent filed a writ petition in Bombay High Court questioning appellate order - Writ petition remained pending in High Court for nine years - Sales Tax Authorities filed two counter-affidavits - In first counter-affidavit filed authorities generally denied contentions as well as factual basis of contentions raised in writ petition but without specifically denying each averment individually - However before writ petition came up for hearing a detailed counter-affidavit was filed denying each and every fact on basis of which respondent claimed relief of refund in said writ petition - Division Bench which heard writ petition observed that authorities did not specifically deny several material facts contained in writ petition in their first counter and that they chose to do so only after nine years when writ petition came up for hearing - On that basis Division Bench that there was no real controversy as to material facts and therefore respondent is entitled to relief claimed - Whether transactions were assessable to tax under Act or not is a question of fact which must be gone into by appropriate authorities under Act - Whether transactions in question were exigible to tax or not under Act it is a proper case where matters are remitted to appellate authority viz - Held, Court are of opinion that question whether transactions were assessable to tax under Act or not is a question of fact which must be gone into by appropriate authorities under Act - It would have been a different matter if High Court had discussed facts and had recorded a finding thereon in which situation Court would not have been inclined to remit matter back to appellate authority as we are proposing to do - But in this case High Court has respondent entitled to refund merely because first counter-affidavit filed by authorities in High Court did not contain fact-by-fact denial - This in Court opinion was not a reasonable thing to do in circumstances when there was a controversy as to relevant facts - In any event in second counter-affidavit filed by authorities in High Court there was a denial fact-by-fact - Court are therefore of opinion that having regard to facts and circumstances of this particular case and having regard to fact that no authority has so far gone into question whether transactions in question were exigible to tax or not under Act it is a proper case where matters are remitted to appellate authority viz - Assistant Commissioner Sales Tax or corresponding authority as may be obtaining today - Court direct that appellate authority shall entertain appeal which was filed by respondent without raising an objection on ground of limitation and dispose it of in accordance with law - Court may make it clear that Court are making above direction to appellate authority to ignore plea of limitation in facts and circumstances of this case which we have set out hereinabove - Soon after decision in Bengal Immunity respondent filed said suit claiming refund of tax paid under a mistake which suit was fought for many years and wherein it was ultimately that suit was not maintainable in law - It then filed a refund claim which too was rejected against which he filed a writ petition - Soon after it withdrew writ petition it immediately filed said appeal - In circumstances principle of Section 14 of Limitation Act must be said to have been attracted - Court must make it clear that Court did not intend to nor have Court expressed any opinion on merits of respondents claim including his contention that decision in Bengal Immunity put him on notice regarding his payment of tax being under a mistake and/or that said decision furnishes a cause of action for his claim of refund - Appeal Allowed
ORDER
1. This appeal is preferred against the judgment of the Bombay High Court allowing a writ petition by its order dated 23-6-1975/24-6-1975.
2. The respondent-Mills was a dealer registered under the Bombay Sales Tax Act. In respect of certain sales effected by it, it was found liable to pay sales tax under the said Act as determined by the assessment order dated 18-5-1954. The respondent did not question the order of assessment by way of an appeal but instituted a suit on 20-12-1955 being OS No. 402 of 1956 on the original side of the Bombay High Court claiming refund of a sum of Rs 65,187 on the basis that the said amount was paid by him under a mistake of law. The respondent relied upon the decision of this Court in Bengal Immunity Co. Ltd. v.. State of Bihar, as furnishing the cause of action for the suit, since it is from the said decision that it claimed to have discovered the mistake in paying the said tax. The suit was dismissed on 11-8-1960 as not maintainable in view of the bar contained in Section 20 of the Bombay Act. An appeal was preferred by the respondent to the Division Bench was dismissed. The matter ultimately came to this Court. This Court affirmed the judgment of the High Court on 23-8-1955.
3. On 24-5-1965, the respondent says, it filed an application for refund before the Commissioner of Sales Tax, which was rejected on 10-6-1965. The respondent thereupon, filed a writ petition in the Bombay High Court being Miscellaneous Petition No. 363 of 1965. However, the respondent withdrew the said writ petition stating that it wishes to pursue the remedies provided by the statute. The respondent then filed an appeal, on 3-5-1966, against the order of assessment dated 18-5-1954 before the Assistant Commissioner, Sales Tax with an application for condoning the delay. The said authority refused to condone the delay and dismissed the appeal. The respondent filed a writ petition in the Bombay High Court questioning the appellate order on 17-8-1966. The writ petition remained pending in the High Court for nine years. The Sales Tax Authorities (respondents in the writ petition) filed two counter-affidavits. In the first counter-affidavit filed on 21-3-1969, the authorities generally denied the contentions as well as the factual basis of the contentions raised in the writ petition but without specifically denying each averment individually. However, before the writ petition came up for hearing, a detailed counter-affidavit was filed denying each and every fact on the basis of which the respondent claimed the relief of refund in the said writ petition. The Division Bench which heard the writ petition observed that the authorities did not specifically deny the several material facts contained in the writ petition in their first counter and that they chose to do so only after nine years when the writ petition came up for hearing. On that basis, the Division Bench held that there was no real controversy as to the material facts and therefore the respondent is entitled to relief claimed.
4. In this appeal, Mr. K. Madhava Reddy, learned counsel for the State of Maharashtra, assailed the correctness of the approach adopted by the High Court. Learned counsel submitted that the order of assessment was made on 18-5-1954, whereas the appeal before the appellate authority was filed on 3-5-1966 i.e. after a period of 12 years and that in the circumstances, the appellate authority was right in refusing to condone the delay. Learned counsel submitted further that the High Court ought not have exercised its extraordinary jurisdiction under Article 226 in the facts of the case, both on the ground of laches as well as on merits. In particular, learned counsel submitted that the decision of this Court in Bengal Immunity has no relevance to the claim for refund and that the claim for refund is really based upon facts particular to this case. Learned counsel also submitted that the High Court ought not to have recorded a finding of fact in
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