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1957 Supreme(Ori) 11
IN THE HIGH COURT OF ORISSA
Das, Narasimham, JJ.
ORIENT PAPER MILLS LTD.
Versus
THE STATE OF ORISSA AND OTHERS
O.J.C. Nos. 184, 185, 186, 187 and 188 of 1955
Decided On: Decided On : 04-02-1957
P. C. Chatterji, A. C. Gupta, and U. P. Mukherji, for the petitioners.
The Advocate-General and G. K. Misra, for the opposite parties.
The principle of res judicata does not bar a refund of sales tax paid on inter-State sales, as the jurisdiction of the High Court under Article 226 of the Constitution cannot be curtailed by an Act of a Legislature in India.
Headnote:
SALES TAX - REFUND - RIGHT TO REFUND - WHETHER BARRED BY PRINCIPLE OF RES JUDICATA - ORISSA SALES TAX ACT, 1947 (ORISSA ACT XIV OF 1947), SEC. 14, 22, 9-B(3).
Fact of the Case:
The petitioners, Messrs. Orient Paper Mills Ltd., paid sales tax on certain transactions which they later claimed were inter-State sales and not liable to sales tax. They applied for refund of the tax paid, relying on the decision of the Supreme Court in the United Motors case ([1953] 4 S.T.C. 133; A.I.R. 1953 S.C. 252). The Member (C.T.), Board of Revenue, rejected their prayer for refund on the ground that the order of assessment of sales tax became final and that it should not be re-opened merely because of a change in the law brought about by the decision of the Supreme Court.
Finding of the Court:
The Court held that the petitioners were entitled to a refund of the sales tax paid on the inter-State sales, as the tax was not legally due from them. The Court rejected the argument that the principle of res judicata barred the refund, as the jurisdiction of the High Court under Article 226 of the Constitution could not be curtailed by an Act of a Legislature in India. The Court also held that section 22 of the Orissa Sales Tax Act, 1947, which gave finality to an assessment made under the Act, did not apply to applications for refund under section 14 of the Act.
Issues: 1. Whether the petitioners were entitled to a refund of the sales tax paid on the inter-State sales. 2. Whether the principle of res judicata barred the refund.
Ratio Decidendi: 1. The petitioners were entitled to a refund of the sales tax paid on the inter-State sales, as the tax was not legally due from them. The decision of the Supreme Court in the United Motors case ([1953] 4 S.T.C. 133; A.I.R. 1953 S.C. 252) held that inter-State sales were not liable to sales tax. 2. The principle of res judicata did not bar the refund, as the jurisdiction of the High Court under Article 226 of the Constitution could not be curtailed by an Act of a Legislature in India. Section 22 of the Orissa Sales Tax Act, 1947, which gave finality to an assessment made under the Act, did not apply to applications for refund under section 14 of the Act.
Final Decision: The Court allowed the claim for refund in O.J.C. Nos. 186 of 1955, 187 of 1955 and 188 of 1955. The Court rejected the claim for refund in O.J.C. Nos. 184 and 185, of 1955 as time-barred.
JUDGMENT
NARASIMHAM, C.J. - These are applications by Messrs. Orient Paper Mills Ltd. against the orders of the Member (C.T.), Board of Revenue, in revision, rejecting their prayer for grant of refund section 14 of the Orissa Sales Tax Act, 1947 (Orissa Act XIV of 1947) (hereinafter referred to as the Act) in respect of sales tax realised from them for the quarters mentioned below :
----------------------------------------------------------------------- O.J.C. No. Quarter Date of Date of ending. assessment reassessment including under section 12(7) Inter-State (in respect sales. of local sales only). ---------------------------------------------------------------------- (1) (2) (3) (4) ----------------------------------------------------------------------
184/55 31-03-30 26-06-50 19-12-51
185/55 30-06-50 23-11-50 19-12-51
186/55 30-09-50 29-09-51 19-12-51
187/55 31-12-50 29-09-51 19-12-51
188/55 31-03-51 29-09-51 19-12-51
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----------------------------------------------------------------------- Date of order on Date of order on Amount of refund appeal against revision against claimed. assessment noted appeal order noted in Col.3 in Col.5. ---------------------------------------------------------------------- (5) (6) (7) ----------------------------------------------------------------------
27-01-51 27-06-51 Rs. 34,309-5-0
31-01-51 27-06-51 Rs. 95,819-3-0
29-02-52 - Rs. 1,35,250-0-0
29-02-52 - Rs. 1,37,613-7-0
29-02-52 - Rs. 1,44,853-0-0
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2. The petitioners paid the taxes in due course but when they came to know of the decision of the Supreme Court in the United Motors case ([1953] 4 S.T.C. 133; A.I.R. 1953 S.C. 252) (State of Bombay v. United Motors (India) Ltd.) construing Article 286(1) of the Constitution they thought that they were not liable to pay sales tax in respect of the transactions covered by these applications inasmuch as they related to inter-State sales. Their claims for refund were mainly based on the decision of the Supreme Court which, according to them, made it absolutely clear that no sales tax was due from them in respect of those transactions. The subsequent reversal of that decision of the Supreme Court by a later decision of the same Court in the Bengal Immunity case ([1955] 6 S.T.C. 446; A.I.R. 1955 S.C. 661) (Bengal Immunity Co. v. State of Bihar) in respect of other matters did not, however, affect the former decision so far as the non-liability to pay sales tax in respect of these transactions was concerned.
3. The main ground on which the Member (C.T.), Board of Revenue, by his order dated the 12th February, 1955, refused to grant refund was that the order of assessment of sales tax became final; that the petitioners did not care to challenge it on appeal or revision and that it should not be re-opened merely because of change in the law brought about by the decision of the Supreme Court in the United Motors case ([1953] 4 S.T.C. 133; A.I.R. 1953 S.C. 252). Apparently, the Sales Tax Authorities have taken the view that the principle of res judicata in some way or other would apply and if an assessee against whom an order of assessment of sales tax is made allows the assessment to becom
