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High Court Of Madhya Pradesh
Bishambhar Dayal, C. J. and S. P. Bhargava, J.
CALTEX (INDIA) LTD., INDORE - Appellant
Versus
ASSISTANT COMMISSIONER OF SALES TAX, INDORE REGION, INDORE - Respondents
Misc. Petn. 373 Of 1969
Decided On : 12/09/1970
It is clear that subject to the question of limitation, waiver or estoppel, money paid under mistake or coercion may be recovered under section 72 of the Contract Act. The right to relief under section 72 extends to money paid under mistake of law, i.e. mistake in thinking that the money paid was due when in fact it was not due. When the mistake of law is common to both the parties, there is no question of estoppel. 76 IA 244, (1959) SCR 1350 & 16 STC 689 relied on. [Para 11
(2) Limitation Act, 1908 - Art. 96 - money paid under mistake - time commence to run from the knowledge of the mistake - knowledge of mistake based on judgment of superior Courts how to be inferred.
(3) Limitation Act, 1963 - S.17 & Art.24 - scope of.
Under the Indian Limitation Act, 1908, a claim for relief on the ground of mistake was governed by Article 96 and time commenced to run from the date when the mistake became known to the plaintiff. 1964 RN 217 = 1964 JLJ 115 relied on.
Article 96 has been omitted in the new Limitation Act of 1963. However, section 17 (1) (c) of the new Act provides that in case of a suit for relief from the consequences of a mistake the period of limitation shall not begin to run until the plaintiff has discovered the mistake or could with reasonable diligence have discovered it. Thus under the new Act, the result would be the same as that provided in the Act of 1908. [Paras 12 & 13
Where the mistake of law could be discovered by a ruling of the Madras High Court and also by the later rulings of the Supreme Court and the Madhya Pradesh High Court, the petitioner in Madhya Pradesh could treat the date of the decision of the Supreme Court or the Madhya Pradesh High Court as the date of knowledge. [Para 14
(4) Constitution of India - Art.226 – claim for return of money paid under mistake of law - writ petition filed within the period prescribed for a civil suit – High Court may grant relief.
Where sales tax was paid under a mistake of law, the High Court may order the refund of the amount in a writ petition, if the petition was not made beyond the period of limitation prescribed for a civil suit. 1964 RN 217 = 1964 JLJ 115 (SC) 16 STC 689 & 22 STC 524 relied on. [Paras 15 & 17
( 1 ) THE circumstances leading to the filing of this writ petition may be breifly stated thus. The petitioner, Caltex (India) Ltd. , Indore, is a dealer registered under Section 7 of the Central Sales Tax Act, 1958. For the period of assessment commencing from 1-1-1963 to 31-12-1963 the petitioner was assessed by the assistant Commissioner of Sales Tax, Indore, by his order dated 30-10-1965. By the said order it was determined that the gross turnover of inter-State sales was rs. 2,69,675/ -. Along with his return the petitioner had furnished declarations pertaining to various sales of motor spirit and lubricants amounting to Rs. 2,49,966/- in 'c' form and claimed that he was liable to be taxed on the concessional rate at 2%. However, the Assistant Commissioner of Sales Tax rejected the assessee's claim in respect of sales of Rs. 96,959/- made to M/s. G. Rai and Company, Jhansi, on the ground that the petitioner "is not entitled to claim a concessional rate at 2% because the 'c' forms issued by the purchaser covers more than one transaction of sale exceeding Rs. 5000/- and thus provision of rule 8 of the M. P. Sales Tax (Central) Rules, 1957 is not complied with. Those will be liable to tax at the rate of 10%. " According to the petitioner, as a result of the rejection of the said declarations, the assessee became liable to pay an additional amount of Rs. 8965. 23 paise as sales tax. The entire tax assessed on the petitioner was deposited on 9-12-1965.
( 2 ) IN the assessment proceedings, various contentions were raised on behalf of the petitioner but the proviso to Rule 8 of the M. P. Sales Tax (Central) Rules, 1957 which reads as follows, was assumed to be a valid provision. In fact, the said provision could not be challenged as ultra vires before the sales tax authorities. Proviso to Rule 8: "provided that no single Declaration shall cover more than one transaction of sale, except in cases where the total amount covered by one declaration is equal to or less than Rs. 5000/- or such other amount as the Commissioner, may, by a general order, notify in the official gazette. "
( 3 ) THE corresponding rule of the Central Sales Tax (Madras) Rules 1957 is 10 (1 ). It required that no single declaration shall cover more than one transaction of sale. . . . . . . . . . . . . . . . . . It was held by the Madras High Court in R. Nandlal and Co. v. State of Madras, (1965) 16 STC 1 (Mad) that the lower rate of assessment could not be denied to the dealers on the basis of Rule 10 (1) as it prevailed in the madras State "where the selling dealer was found to have complied with the essential requirement both under the Act as well as the Rules framed thereunder in the matter of supply of 'c' forms.
( 4 ) AN appeal was preferred against the said decision to the Supreme Court. It held on 14-4-1967 (reported in AIR 1967 SC 1758) that it was not within the competence of the State Authorities under Sections 13 (3) and 13 (4) of the central Sales Tax Act to provide that a single declaration covering more than one transaction shall not be made. Their Lordships held that such a rule could only be framed by the Central Government in exercise of the power under Section 13 (1) (d) which prescribes form of declaration and the particulars to be contained in the declaration. In the said view, Rule 10 (1) aforesaid was held to be inconsistent with Section 13 (1) (d) of the Central Sales Tax Act (see State of Madras v. R. Nandlal and Co. , AIR 1967 SC 1758 ).
( 5 ) AFTER the decision of the Supreme Court, the proviso to Rule 8 of the M. P. Sales tax (Central) Rules, 1957, which we have quoted above in paragraph 2 of this order, was challenged in the M. P. High Court. This Court by its decision reported in Commr. of Sales Tax Madhya Pradesh, Indore v. Giria Prasad Sunderlal of satna, (1968) 21 STC 360 (MP) held the said proviso to be unenforceable. 6- The petitioner thereafter made an application to the Commissioner of Sales Tax on 15-10-1968 dra
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