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Claridges Hotels (P.) Ltd. Vs. the Sales Tax Officer - Court Judgment

LegalCrystal Citation
Subject Sales Tax
CourtDelhi High Court
Decided On
Case NumberC.W. No. 979 of 1982
Judge
Reported in[1983]53STC83(Delhi)
ActsConstitution of India - Article 265
AppellantClaridges Hotels (P.) Ltd.
RespondentThe Sales Tax Officer
Cases ReferredInder Singh Harbans Singh v. State of Madhya Pradesh
Excerpt:
- .....cannot in this manner enrich itself unjustifiably. reliance is placed on the decision of the madhya pradesh high court reported in inder singh harbans singh v. state of madhya pradesh [1982] 49 stc 347. in our opinion that decision does not cover the facts of the present case. the petitions filed before the madhya pradesh high court were dismissed on various grounds. but the salient feature therein was that the order of assessments had not been annulled. the petitions were also very much delayed and so the ground of laches was also pleaded against the petitioner therein. the madhya pradesh high court had followed a decision of the andhra pradesh high court in this regard. there also the facts were peculiar to the case before the andhra pradesh high court apart from the peculiar.....
Judgment:

1. The only opposition raised by the respondent to the rule issued is that the petitioner has collected the sales tax from its customers and thereforee cannot retain it. It is not disputed that the sales tax deposited, now in dispute is not the property of the respondent. It was undoubtedly the property of the petitioner. The respondents in any case have no right to retain something which is not theirs. It is admitted by the respondents in their affidavit in paragraph 35 of the counter-affidavit that as per the assessment orders the petitioner has been held entitled to refund of Rs. 80,342, Rs. 93,513 and Rs. 1,65,710 respectively for the assessment years 1974-75, 1975-76 and 1976-77. It is also admitted that applications in the appropriate forms had been filed in time. As noticed earlier, the only plea is that the discretion of the assessing authority has been exercised against the petitioner for the reason that the petitioner has not refunded the said sales tax amount to its customers. The contention is that the petitioner cannot in this manner enrich itself unjustifiably. Reliance is placed on the decision of the Madhya Pradesh High Court reported in Inder Singh Harbans Singh v. State of Madhya Pradesh [1982] 49 STC 347. In our opinion that decision does not cover the facts of the present case. The petitions filed before the Madhya Pradesh High Court were dismissed on various grounds. But the salient feature therein was that the order of assessments had not been annulled. The petitions were also very much delayed and so the ground of laches was also pleaded against the petitioner therein. The Madhya Pradesh High Court had followed a decision of the Andhra Pradesh High Court in this regard. There also the facts were peculiar to the case before the Andhra Pradesh High Court apart from the peculiar provisions of law in force there. In the case before us there is neither laches nor delay. The assessment orders passed have resulted in the petitioner being held entitled to a refund. Under the Act in force here they are bound to refund the money and in fact the petitioner has been held entitled to refund. Discretion cannot be exercised contrary to law. There has to be some foundation for discretion. The sales tax is a tax on the dealer. The mere fact that the dealer may recover sales tax from its customers has no relevance to the levy of the tax or collection thereof. The customers may or may not be entitled to claim back the sales tax paid by them and the dealer may or may not be liable to pay back the customers; but it does not lie in the mouth of the respondent to raise this plea. In law respondents cannot retain something which is not theirs and which they are bound to refund under the provisions of the Act. Indeed not paying back would amount to depriving the petitioner of its property without due process of law. That would be unconstitutional. One may refer to article 265 of the Constitution in this regard. Accordingly, we hold that the petitioner is entitled to refund of Rs. 80,324 forthwith. If the petitioner is entitled to any interest in accordance with law the same is also to be paid to the petitioner. We make the rule absolute. The petitioner would be entitled to costs. Counsel's fee Rs. 550.


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