-·· –~—~-·———:—-::———,——. 19fi1 242' SUP.REllIE COURT REPORTS·· (1962] SUPP.•) .~IESSRS; BURl\IAH. CONSTRUCTION'.r CO.-, ,Octolertlf. … , . .,f 'V. ~-:·i–:· -:
,., .. –. …. -, .. /, … ,. ;;.,._THE.,S'J.'ATE OF.ORISSA,AND ORS.,. · – , .. (s:r. SrnHA/CJJ!,J.1 r:;. :KArur:lllf.'RrI>AYATmurr,'· ·· · <J.' C. SHArr·and J·::R, l\IunHoLKAri, JJ.) ·.· '
——· ~' _;i ;·/:_~_;· __ :_ _. – .:; '-~ ~'>: .. –j t~ ~ . j -~ – r:c' Sale& •Tax-Refund>i>f-Limitation proi·idfd by ;<;tatute- Val~dit!i–'-IJ applies to v;rit petition~()ri'8a St1lu Tax Act; 1947:: (OrissaXIVo/1947),s.14 .. ,.,· ;•,, .· …. " ,.
, .. : … • .. . . ….. ·' ,. .,, ·.' ,_ . ·- . ·-' ~-\The appellant Who _eiecuiCd.'"'·orks:coniracts waS assessed_:_ to. sales. tax· for quarters .Cending June 30; 1949;rto March 31, . 1954, ,and _,paid-,the tax.r;. On August .9; 1954,, the appellant . filed a. writ petition. before· the High r,Court, for; a declaration • that th,e .i:irovi_sfon~ o_fth.~ Orisoa Sales,Tax Act, 1947! permitt;. ing leyY of sales tax: on· works contracts ~·ere ultra i·ires;· for a ~ decta.Fatiori ·· that the ·assessments were illegal aild_ for· a· refurid of the amount paid as tax. · The High Court declared that the assessments were not in ac.cordance with the law and directed.:, refund of the •ta.-..:; pald, if-, recovery. thereof. was not barred • uni:Iers. 14 oftlie Act on the date of the filing.of the writ peti-.; tiori; ·· Section 14 provided that nq claim for a refund shall be · allowed'by the Collector unless it was made within· 24 months · from the date of the ·assessment order or· within· 12 . months of · the order pa!!!sed on· appeal, revision, review O! reference_. .The appellant contended thats, 14. was ultra i-ires and that the bar . of limitation ins. 14 was not' applicable to the· Writ petition ' ·before the High Court for refund of tax ille'gallnecovered;'' … · _:-, – :
-·.-.: : ~ :_ __ -_ ; . ' ,_ t ,. _, – r : – . HelrI, that provisions: of s. 14 of -the. Orisla~ Sales·Tax·· Act, 1947, were not ultra .-ires the State Legislature. The,· power ,to legislate in respect of refund of tax improperly or illegally collected, and imposition of restrictions on the exercise of the right to claim refund which was an ancillary or sub. sidiary ma tier was not beyond the competence of ·the
legislature. State of Orissa v. The Orient Paper .Mills Ltd., A. I. R. (1961) s:c. 1438, relied on. Held, futher, that the bar of limitation in s. 14 of the Act was applicable to the case. The proceedings before the High Com! were substantially to compel the Collector to carry out his statutory obligations under s. 14, and it could only be allowed subject to the restrictions imposed by the·statute. It was not open to th,e appellant to rely upon the statutory right and to ignore the restrictions subject to which the right was made enforceable.
(1) S.C.R. CIVIL APPELLATE JURISDICTION: Civil Appeal No. 494 of 1960. Appeal by special leave from the judgment and order dated April 21, 1958 of the Orissa High Court in O.J.C. No. 107 of 1954.
G. 0. Mathur, for the appellants. H. N. Sanyal, Additional Solicitor-General of India, K. N. Rajagopal Sastri, G. K. Mishra and T. M. Sen, for t·he respondents. 1961. October 26. The Judgment of the Court
was delivered by SHAH, J. -Messrs. Buarmah Construction Comp- any-a firm carrying on business as building and works contractors-executed several contracts in the State of Orissa for construction of buildings,
roads, bridges etc. Messrs. Burmah Construction Company, who are hereinafter referred to as the appellants, were registered as dealer in Orissa under. the Orissa Sales Tax Act, 1947 from the quarters
ending June 30, 1949. The Sales Tax Officers treating the transfer of the materials used in the construction of the buildings, roads and bl'idges, as sale of goods, assessed the appellants to tax under
t.he Orissa Sales Tsx Act. The t11-x so assessed under the diverse orders of assessment was paid from time to time. For the quarters · ending June 30, 1949, to March 31, 1954, the appellant paid
Rs. l,17,869-8-0as tax andRs .. 2,917-11-0aspenalty. The following table sets out the tax and penalty paid to the Sales Tax Authorities for the twenty quarters:- Srl. Circle No. Name.
Regist- ration No. Tax paid. Penalty paid. — — —– -·— ·Total Amount paid. Rs. A. P. Rs. A. P. Rs. A. P. I. PU II 1755 35336 7 0 3JO 0 0 35686 7 0 2. BA. 1596 5:3990 6 6 310 0 0 54300 5 6
19~1 M"'"· Brmn4h Construction. Co, v. Th. State of Ori.ssa Shah J. ig11 Musts. B..-A Conl1""1ion Co. Tiu 81011 of Orim Sir4h J. 244 SUPREME OOURT REPORTS [!!l62) SUPP. 3. :BA 4. MB
5. BP 6. cum 7. CU I 1596A 2719 30 2719 30 3376 60 1352 40 4728 100 5349 10 5349 1 0 1375 10913120 905 70 11819 30 6184 6 0 6184 6 0 —– – — —– 117869 8 6 2917 II 0 120787 3 6
Relying upon the judgment of the Madras High Court in GannonD11:nkerly & Co., Ltd. v. State of Madr08(1), the appellants applied on August 9, 1954, to the High Court of Judicature, Orissa for
(a) a det>laration that the provisions ot the Orissa Sales Tax Act, 1947 authorising imposition of the sa.les tax on a turnover of works contracts and repair works were tdtra virea the State Legislature;
(b) a declaration that the aeseesment made by the State Sales Tax Authorities on the appellant's works contracts which had resulted in payment of Re. 1,20,787·3·6 by way of eales tax and penalties for diff'erent
quarters were without juriedktion and illegal and liable to .be quashed and that the appe~l- 11nt was entitled to get refund of the said amount; ( c) a direction restraining the State and
its Sales Tax Officers ]"rom taking any eteJlll in making any further a8eesement or complete the &88688mente pending before them in respect of the appellant's works contrat'te with the
State Government and levying and collecting any sales tax from the appellant on works oontract.e; and (d) issue of appropriate writ or direotiona directing the State of Orissa and its Sales Tax
Oflioera to refund the amount of sales tax and penalties realised from the appellant. (I) A. I. R. (1954! Mad. I IJO. (1) S.C.R. SUPREME OOURT REJ.>ORTS Following the judement·of this Court in)he
State of Madras v. Gannon Dunkerly cf< Co., Lid.(') ,which confirmed the decision of- the Madras High Court in 5 S.T.C. 216, the High Court declared that the assessment of sales tax was not in accorda11ce
with law and directed that no steps, either by certificate proceedings or otherwise should be taken to realise the arrears of sales tax in respect of those contracts. The High Court also directed
refund of tax paid, if recovery thereof was not barred under s. 14 of the Orissa Sales Tax Act 194 7 on the date of the filing of the application. The High Court also directed the Sales Tax Autho-
rities to revise the assessments made in the light of the decision of this Court in respect of assessments made after the date of the petition. The appellants have appealed to this Court with special leave
challenging the order in so far as their claim for refund is partially declared to be barred by the rule of limitation prescribed by s. 14 of the Orissa Sales Tax Act. The appellants challenge the correctness of the
order declaring that the portion of the tax paid refund whereof is beyond the period of limitation under s. 14 of the Orisaa Sales Tax Act, 194 7 on the date of the filing of the applieation under Art. 226,
as not refundable on two grounds: ( 1) that s. 14 •of the Act is ultra vires the State Legi1latilre; (2) that an application under s. 14. 0 which imposes a statutory obligation upoli the
Collector to refund the tax unlawfully teOOTet, ed subject to certain oonditions is not the only remedy open to the tax payer ·from whom tax h'\s been unlawfully recovered and the power of the High Court to direct refutid
of tax illegally teoovered is not restricted by s. 14 of the Act. To the enforcement of'oth~ remedies the bar pre8Cribed by the· pro'tia<> to s. 14 does not apply. l19'9l S, C. R. 379.
Messrs-. Bunftala Conatructiim Co. v. Tiu Stat1 of Orissa Shafi J. 1ge1 ll1sns. B~mah Conllruttion Co. Tiii SUJ'• ofOri.Jsa Sha/iJ. Section 14 of the OriBBa Sales Tax Act, 1947, provides:
"14. The Collector shall, in the prescribed manner, refund to a dealer applying in this behalf any amount of tax paid by such dealer in excess of the amowit due from him under this Act, either by cash payment or, at the
option of tho dealer, by deduction of such excess from the amount of tax due in respect of any other period: Provided that no claim to refund of any tax paid under this A<>t shall be allowed
unleBB it is made within twenty-four months from the date on which the order of assc88- mcnt was pa88Cd or within twelve months of the final order passed on appeal, revision, review or reference in respect of the order of
assessment, whichever period is later." Hy the first paragraph, s. 14 imposes an obligation upon the Colleotor to refund to a dealer any amount paid by such dealer in excC88 of the amount due
from him under the Act. But the obligation is restricted; refund is not to be made unlc88 an application is made within 24 months of the date on which the order of assess:aient was passed or
within 12 months of the final order pasaed on appeal, revision, review or reference in respect of the order of aSBCBBment, whichever period is later. The Orissa Sales Tax Aet was enaoted by the Oriesa
LE!gielature in exero.ise of the Legislative authority conferred upon it by item 48 of List II of the Seventh Schedule of the Government of India Act, 1935. In dealing with the vires of s. 14A of the
Oriss& Sales Tax Act, which was incorporated in the amended Act 28 of 1958 and wbioh sought to confer a right to claim refund by an application to the Collector upon the person from whom tax was
colleo~ by the de:i.ler, this Court observed in The Stale of Orissa v. The Orient Paper Milla Ltd., that "The power to legislate with. respect to a tax _ _, (1) S.C.R. comprehends the power to impose the tax, to pres-
cribe machinery for collecting the tax, to designate the officers by whom the liability may be enforced and to prescribe the authority, obligations and indemnity of those officers. The diverse heads of
legislation in the Schedule to the Constitution demarcate the periphery of legislative competence and include all matters which are ancillary or subsidiary to the primary head. The Legislature
of the Orissa State was therefore competent to exer- cise power in respect of the subsidiary or ancillary matters of granting refund of tax improperly or illegally collected". If the power to legislate in
respect of tax comprehends the power to legislate in respect of refund of tax improperly or illegally collected, imposition of restrictions on the exercise of the right to claim refund will not be beyond the
competence of the Legislature. Granting refund of tax improperly or illegally collected and the restriction on the exercise of that right are both ancillary or subsidiary matters relating to the
primary head of tax on sale of goods. The provi- sions of s. 14 of the Act are therefore not ultra virea the State Legislature. It is not necessary to consider in this case whether s. 14 prescribes the only remedy for refund
of tax unlawfully collected;, by th_e State. The appellants have not filed any civil suit for a decree for refund of tax unlawfully collected from them. This appeal arises out of a proceeding filed in the
High Court substantially to compel the Collector to carry out .hie statutory obligations under s. 14 of the Act. The High Court normally does not enter- tain a petition under Art. 226 of the constitution to
enforce a civil liability arising out of a breach of contra.ct or a tort to pay an amount of money due to the claimant and leaves it to the aggrieved party to agitate the question in a civil suit filed for tha.t
purpose. But an order for payment of money may sometimes be made in a. petition under Art. 226 of the Constitution against the State or against an Messrs. Burmah Construction C.:00
v. f'he.State o/Orissa Sim .T. IHl Jf usrs. Bunnola Coaitnulion Co . 7 Ju s..,, of Oriu• Sllall J. 248 SUPREM11: COURT REPORTS (1062] SUPP. officer of the State to enforce a statutory obligation.
The petition in the present oase is for enforcement of the liability of the Collector imposed by statute to refund a tax illegally collected and it was main- tainable: but it can only be allowed subject to the
restrictions which have been imposed by the Legislature. It is not open to the claimant to rely upon the ~tatutory 1right and to ignore the restric- tions subject to which the right is made enforceable.
We are therafore of the opinion that the High Court was right in restricting the order of refund in the petition under Art. 226 of the Constitution. The order of refund passed by the High Court, however,
requires to be slightly modified and we direct that it shall run as follows: "Th"t part of the sales tax which has been paid by Messrs. Burmah Construction Co. shall be refunded by the State of Orisaa to
the Burman Construction Company if the order of assessment pursuant to which payment was made was within 24 months of the date. on which the petition was filed in the High Court, namely, 9th of August, 1954. Without
deoiding whether the Burmah Constru~tion Co. has the right ~ recover the balance of the · amount of tile tax paid by other appropriate proceedings, the olaim to recover the balance
of the tax paid is dismissed." The appeal substantially fails and is dismissed with costs. "' ..