CWP No.229 of 2002 6.11.2008 Present: Mr. K.L. Bali, Advocate , for the petitioner. Mr. R.M. Bisht, Deputy Advocate General, for the respondents. This petition was virtually heard on 6.5.2008 when we passed the following order:- “In this petition, one of the questions which has arisen for consideration is whether the petitioner is entitled to retain the amount, if any, which it has deducted as TDS at the rate of 2% from the amount paid to the contractors in terms of Section 12-A of the H.P. General Sales Tax Act which has been declared ultra- vires. There can be no manner of doubt that in view of the fact that the said Section has been declared ultra vires, the tax could not be recovered under the said Section. However, in case the petitioner has deducted the tax in terms of Section 12-A it would not be entitled to refund of the same because that would amount to undue enrichment. As far as penalty and interest part are concerned, we are of the considered view that since the imposition of tax under Section 12-A is illegal, no penalty or interest could have been imposed. Before we take any further decision in the matter, the petitioner is directed to file an affidavit in respect of the amount of Rs.74,84,230. In the appeal filed by the petitioner before the Appellate authority , it has been clearly stated that the amount of Rs.74,84,230 was deducted as sales tax from the contractors from the amount of bills but could not be deposited with the assessing officer within time and was deposited on 8.1.2001, 9.1.2001 and 28.1.2001. The petitioner is, therefore, directed to file fresh affidavit clearly stating that whether this amount has been deducted from the amount payable to the contractors or has been paid by the petitioner out of its own funds. This affidavit be filed within three weeks from today. The counter affidavit be filed within two weeks thereafter”. From the perusal of the above order, it is apparent that the only question which has to be decided is with regard to refund of Rs.74,84,230/- deposited by the petitioner with the State. As far as this amount of Rs. 74,84,230/- is concerned, pursuant to the earlier order dated 6.5.2008, the petitioner filed an affidavit in which it is clearly stated that this amount has not been paid by the petitioner out of its own funds but was collected from the contractors and deposited by the petitioner. Therefore, this amount cannot be refunded to the petitioner as that would amount to undue enrichment. However, we may make it clear that in case any contractor approaches the petitioner for refund of the amount, the petitioner shall issue a certificate to the contractor certifying the exact amount deposited by the depositor and then by the petitioner. The contractor on the basis of such certificate can approach the State for refund of the amount. The amount so certified by the petitioner shall be refunded by the State to the contractor who approaches the State with the requisite certificate. As far as the imposition of the interest and penalty is concerned we have already held that since the imposition of tax under Section 12-A is illegal, no penalty or interest could have been imposed. Therefore, the penalty amount and interest, if any, deposited by the petitioner shall be refunded to it by the State Govt. The writ petition stands disposed of in the aforesaid terms with no order as to costs. ( Deepak Gupta),J ( Kuldip Singh) J. November 6, 2008 (sks)