Back
2008(8) Supreme 549
SUPREME COURT OF INDIA
S.B. Sinha and Cyriac Joseph, JJ.
Corporation Bank — Appellant
versus
M/s. Saraswati Abharansala and another — Respondents
Civil Appeal No. 6708 of 2008
(Arising out of SLP (C) No. 380 of 2007)
Decided on : 19-11-2008
(b) Kerala General Sales Tax Act, 1963 – Section 44 r/w Article 265, Constitution of India – All acts relating to the imposition of tax providing for the point at which the tax is to be collected, the rate of tax as also its recovery must be carried out strictly in accordance with law. (Para 21)
(c) Administrative Law – Subordinate legislation cannot override statutory provisions – If the substantive provision of a statute provides for refund the State, by a subordinate legislation, cannot lay down that the tax paid even by mistake would not be refunded – If tax has been paid in excess, save and except the cases involving the principle of ‘unjust enrichment’, it must be refunded. (Para 22)
(d) Interpretation of statutes – Purposive construction – The statute should be considered in such a manner so as to hold that it serves to seek a reasonable result – Construction of the statute which leads to confusion must be avoided. (Paras 25 and 26)
Facts of the case :
1. First respondent is a dealer in bullion gold. It entered into transactions of purchase of gold from the appellant herein during the period 6th April, 1999 and 10th December, 1999. The total transactions during the said period were for a sum of Rs.423748518/-. The rate of tax prevailing at the relevant time was 1%. The amount of sales tax at the said rate was collected from respondent No.1 and deposited with the sales tax authorities.
2. On or about 27th December, 1999 vide S.R.O. No.1075/99 the rate of sales tax was reduced from 1% to 0.5% which was given a retrospective effect from 1st of April, 1999.
3. Appellant on or about 19th January, 2000, in view of the aforementioned Notification, requested the Assistant Commissioner, Sales Tax, Special Circle I, Calicult to refund the excess amount of sales tax collected from the respondent No.1 amounting to Rs.20,97,763.50. The Assistant Commissioner Sales Tax, however, rejected the said prayer in terms of its letter dated 3rd March, 2000
4. A writ petition was filed by the first respondent against the appellant before the High Court of Kerala questioning the validity of the said order which was dismissed by the Single Judge.
5. Division Bench of the High Court by reason of the impugned judgment dated 7th November, 2006 allowed the said writ appeal.
Finding of the Court :
The State must refund the excess tax realized.
Result : Appeal allowed.
JUDGMENT
S.B. Sinha, J. —
1. Leave granted.
2. First respondent is a dealer in bullion gold. It entered into transactions of purchase of gold from the appellant herein during the period 6th April, 1999 and 10th December, 1999. The total transactions during the said period were for a sum of Rs.423748518/-. Indisputably the rate of tax which was prevailing at the relevant time was 1%. The amount of sales tax at the said rate was collected from respondent No.1. The amount so collected, indisputably had been deposited with the sales tax authorities.
3. On or about 27th December, 1999 vide S.R.O. No.1075/99 the rate of sales tax was reduced from 1% to 0.5% which was given a retrospective effect from 1st of April, 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 SRO 1728/93 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 SRO 1728/83 provided as under :-
“9 Minerals and Sale of bullion to Metals Corpora registered dealers tion of India and in jewellery for Banks manufacture of gold jewellery within the State for export.”
This entry in SRO 1728/93 stood amended by SRO 301/99 to read :-
“9 Minerals and Sale of bullion to Metals Corpora registered dealers tion of India and in jewellery for Banks manufacture of gold jewellery within the State for export.”
The said entry, as stated above, was further amended by SRO 1075/99.
5. Appellant on or about 19th January, 2000, in view of the aforementioned Notification, requested the Assistant Commissioner, Sales Tax, Special Circle I, Calicult to refund the excess amount of sales tax collected from the respondent No.1 amounting to Rs.20,97,763.50. The Assistant Commissioner Sales Tax, however, rejected the said prayer in terms of its letter dated 3rd March, 2000, which reads as under :-
“You may please see that the Government as per the above mentioned SRO amended the original notification in SRO 1728/93. According to the said original notification, tax if any collected at the higher rate shall be paid over to the Government and tax if any paid over to the Govt. shall not be refunded. So you may please inform your customer accordingly.”
6. The first respondent was communicated the same by the appellant in terms of its letter dated 6th June, 2000 stating :-
“While referring to your representation on the subject matter, it has been informed by our higherups that as per the letter from the Asst. Commissioner of Commercial Taxes, Calicut viz: 3301/1150/99-2000, it has been clarified that according to the GO., SRO 1728/93 “Any tax collected at the higher rate shall be paid over to the Govt. and tax, if any paid over to the Govt. shall not be refunded. Kindly note the same for your information.”
7. A writ petition was filed by the first respondent against the appellant before the High Court of Kerala questioning the validity of the said order.
“i) declare that the petitioner is liable to pay sales-tax at =% for the transactions referred to in Ext. P2 and that collection of any amount in excess thereof is illegal and is liable to be refunded;
ii) issue a Writ of Mandamus or any other appropriate writ, order or direction directing the respondent to refund to the petitions an amount of Rs.20,97,261/- with interest @ 21% per annum from the date of collection of the amounts shown in Ext. P2 till the date of actual payment;
iii) issue a writ of Certiorari or any other appropriate writ, order or direction quashing Ext. P3;”
8. The said writ petition was dismissed by a learned Single Judge of the said Court by his order dated 4th April, 2006 holding :-
“There cannot be any dispute that the petitione
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
