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Asea Electric (India) Private Ltd. and ors. Vs. the Joint Commercial Tax Officer, Harbour Division-1 and ors. - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtChennai High Court
Decided On
Reported in(1969)2MLJ632
AppellantAsea Electric (India) Private Ltd. and ors.
RespondentThe Joint Commercial Tax Officer, Harbour Division-1 and ors.
Cases ReferredKhosla & Co. (P.) Ltd. v. Deputy Commissioner of Commercial Taxesm
Excerpt:
- .....sales of the goods. on 18th january, 1966 the supreme court decided khosla & co. (p.) ltd. v. deputy commissioner of commercial taxes (1966) 2 m.l.j. 81 : (1966) 2 a.w.r. 81 : (1966) 2 s.c.j. .703 : (19661) 17 s.t.c. 473. if the facts, as stated in the affidavit in support of the writ petitions, are correct, there can be no doubt that, in view of this decision, the sales would not attract tax.2. the purchaser is a wholly government-owned company, with its registered office at delhi, and having some of its units in the state of madras. after khosla 3? co. (p.) ltd. v. deputy commissioner of commercial taxes (1966) 2 m.l.j. 81 : (1966) 2 a.w.r. 81 : (1966) 2 s.c.j. .703 : (19661 17 s.t.c. 473, came to its notice, it instructed its units to claim refund of the relative taxes, not.....
Judgment:

K. Veeraswami, J.

1. These petitions for certiorari by different assessees raise a common point and have, hence, been heard together. It will suffice to notice the facts in the first of these petitions, to determine the main questions. The Asea Electric (India) Private Limited, paid a sum of Rs. 42,915-58 as tax at six per cent on the turnover of Rs. 6,60,239-66, being the value of machinery imported from Sweden and sold to Bharat Heavy Electricals Limited, under a permit therefor issued to the latter by the Assistant Controller of Imports, under the Import Trade Control Regulations. The permit was dated 12th November, 1964. According to the terms of the contract between the parties, the seller was paid 90 per cent of the invoice value and the sales-tax in full when presenting the invoices to the purchaser. That was on 4th February, 1966. A* second invoice also was presented on 24th March, 1966. The assessment was on the combined values under both the invoices. The seller, in its return for the year 1965-66, showed the turnover as chargeable to tax and did not claim any exemption, on the ground that it related to import sales of the goods. On 18th January, 1966 the Supreme Court decided Khosla & Co. (P.) Ltd. v. Deputy Commissioner of Commercial Taxes (1966) 2 M.L.J. 81 : (1966) 2 A.W.R. 81 : (1966) 2 S.C.J. .703 : (19661) 17 S.T.C. 473. If the facts, as stated in the affidavit in support of the writ petitions, are correct, there can be no doubt that, in view of this decision, the sales would not attract tax.

2. The purchaser is a wholly Government-owned company, with its registered office at Delhi, and having some of its units in the State of Madras. After Khosla 3? Co. (P.) Ltd. v. Deputy Commissioner of Commercial Taxes (1966) 2 M.L.J. 81 : (1966) 2 A.W.R. 81 : (1966) 2 S.C.J. .703 : (19661 17 S.T.C. 473, came to its notice, it instructed its units to claim refund of the relative taxes, not exigible under the law, from the respective sellers. The sellers corresponded with the Department at different stages, but in vain. Eventually, the sellers and the purchaser have joined in filing the petition for quashing that part of the assessment of the sellers, which related to the said transactions. The facts in the other petitions are similar, except for the fact that they are by different assessees and the figures of the turnover and actual tax levied, are also different.

3. As we said, if the transactions bear the character which the petitioners claim they did, Khosla & Co. (P.)Ltd. v. Deputy Commissioner of Commercial Taxes (1966) 2 M.L.J. 81 : (1966) 2 A.W.R. 81 : (1966) 2 S.C.J. .703 : (19661 17 S.T.C. 473, would clearly apply to them, with the result the import sales will be exempt from tax. It is well-established that if an assessee has paid tax, though voluntarily, but by mistake of law, he is entitled to ask for refund of such tax means of a petition under Article 226 of the Constitution. The leading authority, followed subsequently in several cases, is Sales Tax Officer v. Kanhaiya Lal Makund Lal Saraf : [1959]1SCR1350 , State of Kerala v. Aluminium Industries Ltd. (1965) 16 S.T.C. 689, establishes two propositions: (1) where a tax is levied by mistake of law, it is ordinarily the duty of the State, subject to any provision in the law relating to sales tax, to refund the tax: no question of estoppel will arise when the mistake of law is common to both the parties; and (2) if refund is not made, remedy through Court is open subject to the same restrictions and also to. the period of limitation, namely, three years from the date when the mistake becomes known to the person who has made the payment by mistake. The right to apply for refund in the instant cases arose on 18th January, 1966, when the Supreme Court decided Khosla &Co. (P.) Ltd. v. Deputy Commissioner of Commercial Taxes (1966) 2 M.L.J. 81 : (1966) 2 A.W.R. 81 : (1966) 2 S.C.J. 703 : (1966) 17 S.T.C. 473, and the writ petitions have been filed well within the period of three years. A prayer for refund con-not be refused by Courts merely on the ground that although the character of the transactions prima facie appears, it had not been fully investigated. In such a case, either a report will have to be called for from the authority concerned, containing its finding on the question, as was done in State of Kerala v. Aluminium Industries Ltd (1965) 16 S.T.C. 689. or the question remitted to such authority with a direction to investigate and decide it, in the light of the authority.

4. The second petitioner being but a purchaser, who paid the tax not to the State but to the assessee, under the terms of the contract between them, the Revenue has taken the objection that the purchaser cannot maintain the petition for certiorari. That raises the larger question as to whether a person who has not been a party to* particular proceedings, can claim to be aggrieved by the orders therein and maintain a petition to quash the same. As a general proposition, it may be recognised that a party aggrieved need not necessarily have been a party to the original proceedings: 11 Halsbury (Supplement), Paragraph 265:2?. v. Thames Magistrates' Court, ex parte Greenbaum (1957) 107 L.J. 184. That case has been digested in 26 English and Empire Digest 482 (1692). That covers a case of a person aggrieved by the refusal of borough council to register him as a registered street trader or to grant or renew an annual licence or by the cancellation by a borough council of his registration as a registered street trader or by the revocation or variation by a borough council of an annual licence. Two street traders, both wishing to occupy a certain pitch in a street, applied to the borough council for a licence for it. The council decided in favour of one of them and the other appealed to the Metropolitan Magistrate against the refusal of the licence to him. The person in whose favour the decision had been given was not a party to the appeal. The Magistrate reversed the order and then the other applied for an order of certiorari to quash the Magistrate's decision. It was held that the petition lay, and this was on the view that certiorari was a discretionary remedy and was not confined to the parties before the lower Court, but extended to any person aggrieved, including a stranger. But the question whether a person is aggrieved is closely bound up with the particular facts, and naturally, therefore, no general proposition can be laid down as a touchstone. Under the provisions of the Madras Sales Tax Act, the seller is no doubt enabled to pass on the tax liability on him to the purchaser. But it should be remembered that it is by way of reimbursing himself and there is, on that account, no liability whatever to tax on the part of the purchaser. If the purchaser paid in such circumstances, it is as part of the contract between himself and the seller, in relation to the sale of goods. Whether, in such a context, the purchaser can be regarded as an aggrieved person, in our opinion, cannot merely rest on the fact that he is in a sense indirectly affected by the assessment of the seller to tax. This is not a case of a dependent order, in the sense the grant to one necessarily involves denial to the other. To such a case, as we are inclined to think, the principle of the citation from Halsbury and! the English and Empire Digest, will have application. We doubt, however, whether the purchase can be regarded for the present purpose, an aggrieved person who by himself can maintain the petition for certiorari. Fortunately, however, the assessee itself figures as a petitioner here and it, therefore, dispenses with the necessity of ourselves deciding the question finally.

5. In the result, we allow the petitions, quash that part of the order of assessment in each of these cases, which charges to tax the import sales, such as are covered by Khosla &Co. (P.) Ltd. v. Deputy Commissioner of Commercial Taxes (1966) 2 M.L.J. 81: (1966) 2 A.W.R . 81:(1966)2 S.C.J. 703: (1966) 17 S.T.C. 473, and direct the assessing authority to investigate the character of the transactions claimed to be import sales, in the light of the original or certified copies of the record relevant to this question, to be filed by the relative assessees, and finally determine the tax liability for exemption of the transactions, in the light of Khosla & Co. (P.) Ltd., v. Deputy Commissioner of Commercial Taxes (1966) 2 M.L.J. 81: (1966) 2 A.W.R. 81:(1966) 2 S.C.J. 703 : (1966) 17 S.T.C. 473. In the event of the abusing authority coming to the conclusion that the transactions are covered by Khosla & Co. (P.) Ltd. v. Deputy Commissioner of Commercial Taxesm (1966) 2 M.L.J. 81: (1966) 2 A.W.R. 81:(1966) 2 S.C.J. 703 : (1966) 17 S.T.C. 473, that authority will, of course, have to refund the relative tax to the assessee Concerned. No costs in any of these petitions.


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