1. The petitions axe alike for the most part. The fact that one of the petitioners seems, in respect of the amount he paid as sales-tax in one of the years in question to have brought a suit against the Government, which was dismissed, does not make any material difference to our decision. Both the petitions are under Article 226 of the Constitution with a prayer for a writ or direction to Government that it should refund to the petitioners concerned certain amounts levied during a number of years before 31st March, 1957, as sales-tax on tobacco imported by the petitioners.
2. In petition No. 3 of 1961 the period is from the year ending on 31st March, 1953, to that ending on 31st March, 1957 and the amount Rs. 9140/-. In the petition No. 4 of 1961 the period concerned is the same with, however, an addition apparently by way of recovery for an earlier period made during the quarter ending on 30th June, 1957, and the amount is Rs. 8470/-. Both the petitions are based on the averment that the Divisional Bench of this High Court in a batch of cases reported under the heading Bhailal Bhai Gokal Bhai v. State, 1960 MPLJ 60 held that the sales-tax imposed on the sale of tabacco imported into Madhya Bharat had illegally been levied and was in that case liable to be refunded, on a direction of the High Court under Article 226 of the Constitution. A similar position had already been taken by the Madhya Bharat High Court in the ruling reported in Mohammad Siddiq v. State, AIR 1956 Madh-B 214. It is stated at the Bar that this decision of the Madhya Pradesh High Court is being challenged before the Supreme Court, but for the time being, we are bound by the finding of the Divisional Bench that the sales-tax in these cases and presumably by analogy, that levied from the petitioners as well, was not legally levied and collected.
3. On this basis the petitioners have urged that a direction should be issued by this Court tinder Article 226 that the Government should refund these amounts to them. It is conceivable that one of the petitioners would himself admit that no direction can be made in respect of the tax paid during one year for the refund of which he seems to have tried unsuccessfully to sue the Government. But that does not alter the nature of the problem before us. It has also been urged as indeed has been held in the Madhya Pradesh ruling already referred to that the payment by the assessee of a tax which is subsequently declared to be ultra vires must be regarded as a payment made under mistake, and the party receiving the same is bound to refund it irrespective of any consideration whether the monies had been paid voluntarily, subject, however, to the question of estoppel, waiver, limitation or the like, Sales Tax Officer Benaras v. Kanhaiya Lal, AIR 1959 SC 135.
4. The question before ns is therefore very simple. Assuming as we are bound at this stage by the correctness of the finding on the principal issue already given in the Division Bench case, are these petitions ones that in the circumstances similar directions should be made for refund? The period for which the tax was levied and paid ended in all those cases in March, 1957. In one of the instant ones, to be sure, a sum of Rs. 685/- is shown to have been realised in the quarter ending in June, 1957; but the Act itself ceased to be operative on the 31st March, Even on this basis these petitions have been filed in January, 1961, well beyond three and half and three and three quarter years after the last date of realization. With reference to the earliest the delay is of eight years. In the batch of petitions dealt with in the Madhya Pradesh judgment, the applications were made in 1958 though the actual dates are not ascertainable from the report. At all events, they had been filed within anything between one year and one year and a half from the date of last realisation. In the Supreme Court case already referred to the realisation had been made in May, 1949, October, 1950, and August, 1951, and the petitions concerned before the High Court of Allahabad had been made sometime in 1952, that is to say, after about a year from the last realisation and about 3 years from the first.
5. The decision of the Supreme Court is clear authority for the proposition that even where the payment had been made voluntarily if it is one under a mistake of law, it would come under Section 72 of the Contract Act and as such recoverable subject, however, to certain conditions including limitation. The question before us is not whether these realisations -- voluntarily paid as they were -- were illegal on the view taken by this High Court, nor whether in principle an illegal payment of this nature even made without protest is recoverable by suit. These are at the present stage altogether beyond question before us. It should also be accepted that subject to limitation and equitable principles, the High Court can even under Article 226 direct the State to refund the amounts which the petitioner before it can recover by suit. But we should guard against the danger of our powers under Article 226 being exploited by a party whose claim against Government is time barred under the Limitation Act. Even if the petition is not patently so, it may be an open question whether in the circumstances a suit by the petitioner for refund of a tax payment which he has learnt on the strength of a subsequent judicial decision was illegal is or is not time-barred. A writ or direction under Article 226 is always equitable and the High Court will not grant it, as a matter of course, simply because there had been an illegality committed. It will see whether for one thing, it is an appropriate remedy in the circumstances, and for another, a party who could bring a suit is seeking a writ simply to evade limitation or other bar. A petition under Article 226 is not subject to limitation as such; but can if granted as a matter of course have the result of evading limitation; that should be carefully guarded against.
6. Between Government realising taxes and private individuals taking their income there is a basic difference. Whereas the latter adjusts its expenses to its income, Governments do just the opposite; they adjust the sources of their income to the expected expenses during the budget period. In fact, public finance in this regard works as it were in a direction opposite to private finance. AGovernment estimates the expenses it might have to incur during the financial year, and then devises means by taxation or otherwise of realising from the citizens of the necessary amounts. This of course does not mean that the Courts would allow Government to levy illegal taxes and get away with it, In appropriate cases they would see that the citizen who had been illegally taxed even if he pays them willingly is made to refund. In case the Court is dealing with a suit, it should pass a decree, however, upsetting it might be to the State's finances provided the decree is called for under the law. But if, as in the case of a writ, the remedy is essentially discretionary and equitable, it should see, if the petitioner is getting any unfair advantage, and the remedy causes to the State more in convenience than it seeks to relieve the petitioner. But it should not be forgotten that the right to refund is 'subject to the estoppel, waiver, limitation or the like' as said by the Supreme Court itself. In the instant case, for example, the last payment itself was made more than three years before the filing of these petitions. Frankly, the petitions are filed after the petitioners heard of the result in the batch of cases reported in 1960 MPLJ 60 referred to above. This again is not very material for our purposes except that it was already about four years after the' last payment. In the event of a suit for the refund, the question would be whether or not there is limitation (say under Article 96 or any other similar one) and what would be the terminus a quo. Actually that would involve many controversial questions which cannot by the very nature be decided in a proceeding under Article 226.
7. On the other hand, it might be urged that in view of Section 17 of the Sales Tax Act a suitis completely barred. It is not so in our view be cause a tax that cannot be legally realized is notone realised under the Act and there should be no bar to a suit. But even otherwise, before the High Court considers the question whether it should order the Government to make a refund it should examine whether the relief it gives is not going to cause disproportionate inconvenience to the other side -- inconvenience from which the law of limitation would have saved it. Thus, even on the assumption that these realisations were not legal, and further, that subject to limitation and the like the tax paid under a mistake of law can be claimed by the prayer from Government, petitioners coming after about four years, cannot take advantage of the High Court's powers under Article 226, and evade the question of limitation, which they would have to face if they went to a Civil Court. In these circumstances these petitions are dismissed; in the special context the parties should bear their own costs.