The discovery of mistake of law and the provisions of the Limitation Act are crucial in determining the limitation for refund of sales-tax.

1. This is an appeal against the decision of a learned judge of this Court, quashing the assessment to sales-tax of the Respondent herein for the years 1950-51 to 1952-53 (both inclusive) and directing the Sales-tax Officer to consider afresh the question as to whether the transaction was one of hire purchase or of sale, and if the former, to refund to the petitioner the sales-tax assessed by the assessment orders in respect of such transaction. The assessment orders themselves were neither produced nor summoned. Nor were even copies thereof exhibited although there is a prayer in the writ petition to quash the orders and to direct refund of sales-tax due under them. It was stated that the transactions in question were hire purchase transactions, and therefore not liable to be assessed to sales-tax by reason of the decision of the Supreme Court in Marikkar Motors' case (19 STC. 18) decided by the Supreme Court on 27-9-1966. It was the petitioner's case that although the assessment orders had been made in pursuance of the returns made by him, and the sales-tax had been paid in pursuance of the orders, he discovered that the payments were made under a mistake of law only when the Supreme Court pronounced on 27-9-1966 in the above case, and that therefore the writ petition filed on 23-9-1968 (less than three years from the pronouncement of the Supreme Court and the discovery of the mistake) was not barred by delay and laches. This contention of the petitioner was accepted by the learned judge, and a refund, on the terms noticed already, was directed.

2. Before us, learned Government Pleader contended that it would be wrong for the Respondent herein to take the stand that the discovery of the mistake of law was only when the Supreme Court pronounced its judgment in Marikkar Motors' case on 27-9-1966. A similar, if not identical, provision of the Madras General Sales-tax Act had been considered earlier by the Supreme Court in Johar & Co.'s case (16 STC. 213), in which judgment was delivered on 10-11-1964. From and after the said judgment, there could not possibly be any reasonable doubt or mistake in regard to the fate of the similar, if not Identical, provision in the Kerala General Sales-tax Act. In the decision in the Marikkar Motors' case (19 STC 18) rendered under the Kerala Act, the Supreme Court observed:

"The statutory provision which was challenged in K. L-Johar and Company's case (1965 (2) SCR. 112) was the explanation (1) of S.2(h) of the Madras General Sales tax Act (9 of 1939) the language of which is almost in identical terms with the explanation (1) of S.20) of Kerala General Sales tax Act, 1125. The ratio of the decision of this Court in K. L. Johar and Company's case applies to the present case and it must, therefore, be held that explanation (i) to S.20) of the Kerala General Sales tax Act, 1125, is beyond the competence of the State Legislature and is invalid". (Italics ours)

This being so, we are unable to agree with the learned judge that the starting point for an application for refund of Sales-tax by the petitioner is not the decisions in Johar & Co.'s case (16 STC 213), but only the pronouncement in Marikkar Motors' case (19 STC. 18). If the earlier decision rendered on 10-11-1964 is reckoned as the terminus a quo from which Limitation for an application for refund starts, it is clear that the petitioner is barred by delay and laches. It was not contended otherwise.

3. This conclusion only stands reinforced if we refer to the provisions of the Limitation Act of 1963 which was the governing statute providing for Limitation at the time when this writ petition was filed. S.17 of the Act reads as follows:

"17. (i) Where, in the case of any suit or application for which a period of limitation is prescribed by this Act,

(a) the suit or application is based upon the fraud of the defendant or respondent or his agent; or

(b) the knowledge of the right or title on which a suit or application is founded is conceal