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1983 Supreme(AP) 141
Andhra Pradesh High Court
Judges : A.SEETHARAM REDDY, M.JAGANADHA RAO
Sri Venkataramana Trading Company - Appellant
Versus
Commercial Tax Officer, Gudur - Respondent
Decided On : 04-05-83
A person who has paid tax under a mistake of law is entitled to a refund, and the High Courts have the power under Article 226 of the Constitution of India to order such refund.
Headnote:
SALES TAX - REFUND - MISTAKE OF LAW - EXCISE DUTY - INCLUSION IN TAXABLE TURNOVER - ASSESSMENT ORDERS AND APPELLATE ORDERS QUASHED - WRIT PETITIONS ALLOWED.
Fact of the Case:
The petitioner, a dealer in liquor, filed writ petitions challenging the assessment orders and appellate orders passed by the authorities under the A. P. General Sales Tax Act, 1957, which included the excise duty paid by another company in the petitioner's taxable turnover. The petitioner contended that the inclusion of excise duty was illegal and erroneous, and that he was entitled to a refund of the tax paid under a mistake of law.
Finding of the Court:
The court held that the petitioner was entitled to the benefit of the Supreme Court's judgment in McDowell and Co. Ltd. v. Commercial Tax Officer [1977] 39 STC 151 (SC), which held that sales tax could not be levied on the amount of excise duty as it was not included in the sale bills. The court found that there was an error apparent on the face of the record in the impugned assessment orders and appellate orders, and that they were liable to be quashed as there was no unreasonable delay in invoking Article 226 of the Constitution of India.
Issues: 1. Whether the petitioner can have the assessment orders and appellate orders quashed under Article 226 of the Constitution of India without following the remedies provided in the A. P. General Sales Tax Act on the ground that the said orders are liable to be quashed on account of illegality or error apparent on the face of the record. 2. Whether the petitioner is entitled to a refund of the tax paid under a mistake of law.
Ratio Decidendi: 1. The court held that the High Courts have the power under Article 226 of the Constitution of India to order refund of tax paid under a mistake of law, even if the mistake was common to both the parties. 2. The court held that the petitioner was entitled to a refund of the tax paid under a mistake of law, as the inclusion of excise duty in the taxable turnover was illegal and erroneous.
Final Decision: The writ petitions were allowed, and the assessment orders and appellate orders were quashed. There was no order as to costs.
( 1 ) THESE two writ petitions raise a common question and can be disposed of together.
( 2 ) W. P. No. 3922 of 1977 is filed for the issue of a writ of certiorari quashing the assessment order passed in G. I. No. 10722/71-72 dated 14/03/1975, confirmed in appeal on 30/03/1976, by the Assistant Commissioner (CT) (Appeals), Guntur, and to direct the authorities to levy the tax in accordance with law.
( 3 ) FOR the assessment year 1971-72 the petitioner returned a turnover of Rs. 2,68,947. 15. The assessing officer determined the net turnover at Rs. 14,81,792. 88 by adding the excise duty paid by M/s. Ananda Rao and Company of Nellore directly into the treasury, to the taxable turnover of the petitioner. The petitioner preferred an appeal to the Assistant Commissioner and disputed the levy of sales tax on the amount of excise duty added to the taxable turnover but the appeal was dismissed by the Assistant Commissioner by following a judgment of this Court in Shaw Wallace and Co. Ltd. v. State of Andhra Pradesh (T. R. C. Nos. 27 and 28 of 1974) reported in [1976] 37 STC 448 which held that the assessing authorities could add such excise duty to the taxable turnover. The petitioner stated in his affidavit that he did not prefer any further appeal to the Tribunal as he was under a bona fide and mistaken impression that the tax was leviable by including the excise duty in the turnover and that the department was also labouring under the same mistake. Subsequently the petitioner came to know that the judgment of the High Court in Shaw Wallace and Co. Ltd. v. State of Andhra Pradesh [1976] 37 STC 448 was overruled by the Supreme Court in the judgment in Mcdowell and Co. Ltd. v. Commercial Tax Officer [1977] 39 STC 151 (SC ). The petitioner stated that the judgment of the Supreme Court was reported in the STC on 15/02/1977, that he immediately approached his chartered accountant for necessary action, and applied for certified copies of the orders of assessment as well as the appellate order inasmuch as the original assessment order was filed in the appeal and the appellate order was misplaced. Thereafter he preferred this writ petition on 8/09/1977.
( 4 ) IN W. P. No. 3923 of 1977 the petitioner is the same and he prayed for the issue of a writ of certiorari quashing the assessment order in G. I. No. 10722/70-71 dated 14/03/1975, confirmed in appeal on 30/03/1976, by the Assistant Commissioner (CT) (Appeals), Guntur, and to direct the authorities to levy the tax in accordance with law.
( 5 ) THE subject-matter of this writ petition is the assessment made in the assessment year 1970-71 for which the petitioner returned a net turnover of Rs. 2,11,426. 86. However, the assessing officer determined the net turnover at Rs. 2,26,123. 84. Later he reopened the assessment and enhanced the turnover to Rs. 4,01,468. 14 on the ground that the excise duty paid on the relevant purchase of liquors and beer by Ananda Rao and Company, Nellore, has to be added to the taxable turnover. The appeal preferred by the petitioner was dismissed by the appellate authority following the judgment of this Court reported in Shaw Wallace and Co. Ltd. v. State of Andhra Pradesh [1976] 37 STC 448. The remaining facts in this writ petition are identical with the facts in W. P. No. 3922 of 1977 and the averments in the affidavit regarding the bona fide belief of the petitioner and of the department and the reasons for the delay in filing the writ petition are also one and the same.
( 6 ) THE question that arises for consideration is : Whether the petitioner can have the assessment orders and the appellate orders quashed under article 226 of the Constitution of India without following the remedies provided in the A. P. General Sales Tax Act on the ground that the said orders are liable to be quashed on account of illegality or error apparent on the face of the record. The question is whether in view of the subsequent judgment of the Supreme Court in Mc
