The power to legislate about a tax must also include the power to legislate about the refund of the tax; the State had the competence not only to tax but also to legislate on ancillary matters, such matters relating to the realization of the tax and a person who has utilized the machinery of law, and gained an advantage by doing so, cannot repudiate the application of that Act by pleading that the subject matter was outside the scope of that Act or that the Act was ultra vires.

Misra, J.

1. These applications have been heard together as they involve a common Question of law as to the validity of Sec.20A of the Bihar Sales-tax Act, 1959, in the following circumstances. The petitioner in M. J. C. No. 289 of 1963 is a firm incorporated in England and has its registered office and carries on business and trade in India at Ghatsila, district Singhbhum, in the State of Bihar. The company carried on a large volume of trade in copper and various other materials and mineral products, supplying them to persons and agencies beyond the State of Bihar and even outside the Indian territory. The petitioner was a registered dealer under the Bihar Sales-tax Act, 1947, as also under the Bihar Sales-lax Act, 1959. The petitioner used to deposit various sums of money from lime to lime in the sales-lax office as advance payment of sales-tax to be adjusted towards the dues of the department after every assessment. The petitioner made several such payments in respect of the dues for the year 1949-50 so also for the accounting year 1950-51 in respect of the sales of materials by the petitioner to persons outside the State of Bihar. The payment was made in the bona fide belief that such sales were subject to tax under the Bihar Sales Tax Act in due course. But having come to know of the real legal position, the petitioner filed an application under Articles 226 and 227 of the Constitution of India in this Court registered as M. J. C. No. 156 of 1957 for refund of the amount paid as tax on inter-State trade for the year 1949-50.

2. On the 16th of January, 1958, M. J. C. No. 156 of 1957 was allowed by this Court and it was held that the sales effected between the 26th of January, 1950, and the 31st of March, 1950, by the petitioner to persons outside Bihar, if such materials were consumed there, would not be liable to any sales-tax and any amount paid as such was refundable. The petitioner was dissatisfied with the order and made an application for leave to appeal to the Supreme Court; and leave having been refused, the Supreme Court was moved for grant of special leave and it was allowed.

3. On the 7th of November, 1960, the appeal of the petitioner was allowed by the Supreme Court and it was ruled that refund would be made to the petitioner of sales-tax on sales of materials delivered outside the State of Bihar for purposes of consumption irrespective of whether they were actually consumed in that State or not. In pursuance of that judgment, the Assistant Commissioner of Commercial Taxes, Jamshedpur, asked the petitioner to make an application for refund of Rs. 45,748-8, which was the amount of refund determined by him on a form prescribed under the Bihar Sales Tax Act. The petitioner was not able to receive actual payment of the refundable amount. The Superintendent of Sales Tax assessed the petitioner at Rs. 5,88,833-14-0, the major part of which was in respect of sales to customers for consumption outside the State of Bihar. The matter was taken to the Board of Revenue and by resolution dated the 20th of August, 1953 the local Sales Tax Officer was directed to make fresh assessment and that officer assessed the tax payable by the petitioner in respect of the sales within the State of Bihar at Rs. 36,595-1-0, by his order dated the 11th February, 1956. The petitioner made an application for refund of the excess paid under mistake of law on the 25th March, 1956.

4. Before, however, the refund could be made, the Sales Tax Officer issued a notice on the petitioner directing the forfeiture to the State of Bihar of the entire amount representing the sales-tax realised from the customers outside Bihar under the provisions of Sec.14A of the Bihar Sales Tax Act 1947, and a proceeding was actually started to that effect on the 23rd of March, 1956. The petitioner made an application to this Court for a writ under Article 226 of the Constitution which was numbered as M. J. C. 392 of 1956 and the forfeiture proceeding was quas