Case: Gurram Sreeramulu, Garlapati Anjaneyulu and Company and Others Vs. State of Andhra Pradesh and Another

3. For the assessment years, the petitioners claim exemption on the same grounds in respect of their turnover of green ginger and garlic but their claim was rejected and that the turnover was subjected to sales tax. The petitioners filed appeals against these assessment orders. The appeals against the assessment orders for the year5 were dismissed by the Assistant Commissioner, Commercial Taxes, Guntur. An appeal against the assessment order for the year5 was, however, allowed but only to the extent of the turnover of sales representing green ginger by the petitioner directly. The petitioners carried the matters in appeals to the Sales Tax Appellate Tribunal in T.A. No. 861/64) and A.R. No. 193/66. The Sales Tax Appellate Tribunal held green ginger to be a vegetable and, therefore, exempt from tax under the aforesaid G.O., viz., G.O.Ms. No. 1091, Revenue, dated 10th June, 1957. The Tribunal, however, allowed exemption only in respect of the sales effected by the petitioners directly and refused to grant any relief in respect of the turnover which was assessed to tax in the hands of the commissioner agents. This portion of the turnover, however, does not form ther of this writ petition as separate T.R.Cs. are filed. The petitioners were thus assessed on the turnover representing the sales of garlic in the assessment years5 whether they were directly by the petitioners or through their commission agents and assessed to a tax of Rs. 6, 543.52. They paid this tax.The petitioners in W.P. No. 3053 of 1967 are wholesale dealers in grain, garlic and other commodities carrying on their business at Guntur. They were assessed to tax of Rs. 41, 212.85 for the assessment years5 in respect of their turnover representing sales of garlic effected by them directly or through their commission agents. The petitioners paid this amount and now claim a refund on the grounds which are common to all these petitionsThe petitioners contend that green ginger and garlic are vegetables which are exempt from tax under G.O.Ms. No. 1091, Revenue, dated 10th June, 1957, read with section 9(1) of theIt is only by a subsequent amendment issued in G.O.Ms. No. 1949 dated 3rd December, 1965, that this exemption was taken away. Although the Commercial Tax Officers refused the claim of the petitioners that green ginger and garlic were exempted from tax under G.O.Ms. No. 1091, Revenue, dated 10th June, 1957, and the orders of assessment had become final so far as the petitioners were concerned, on appeal by other assessees, the Sales Tax Appellate Tribunal by an order dated 6th December, 1965, in T.A. Nos. 861/64 and 95/65 held that green ginger was a vegetable and the turnovers representing the sales of green ginger are exempt from tax5. The Government filed T.R.C. Nos. 10 and 11 of 1966 in the High Court against the orders of the Sales Tax Appellate Tribunal in the aforesaid appeals but withdrew the same. Accordingly, the T.R.Cs. were dismissed by the High Court on 23rd November, 1966. The decision of the Sales Tax Appellate Tribunal holding green ginger to be vegetable and exempt from tax, thus became final and conclusive. Subsequently, the Tribunal disposing of an appeal by some other assessee by an order dated 5th July, 1968, held that garlic was also a vegetable within the meaning of G.O.Ms. No. 1091, Revenue, dated 10th June, 1957, and the turnover in respect thereof was also exempt from tax.

Reasoning:
Having carefully considered these decisions, we are of the view that there is nothing in these decisions which gives an unqualified right to obtain the relief of refund under article 226 of the Constitution of India and which makes it obligatory on the High Court to direct refund of the tax no sooner than it is found that it was paid under mistake of lawAll the decisions which the learned counsel for the petitioner has cited are cases in which the imposition of tax was held to be either beyond the competence of the State Legislature or otherwise opposed to statute. In other words, the assessments were under void enactments. The authorities had no jurisdiction to levy the tax. In these circumstances, the assessment orders could be deemed to be void ab initio and, therefore, the State had no authority to collect the tax. The collection of such tax would be without the authority of law. Civil suits could always be filed for refund of the amounts so collected. In order to get refund of such tax it was not necessary for the petitioners to get the assessments quashed. Such assessment orders which were made under void enactments could be ignored and suits for refund could be straightaway filed. But in cases where the assessments were made under a valid legislation and turnover which was not subject to tax was held to be assessable turnover upon an erroneous view of law, could it be said that the assessing authority was acting without jurisdiction. Such assessment orders were only erroneous in law but not without jurisdiction and so long as the assessment order stood, it could (sic) be contended that the collection of the tax was without jurisdiction.It may be that irrespective of whether the assessment orders are void or merely erroneous, the payment of such tax would still be one made under a mistake and, therefore, the petitioner may be entitled to refund under section 72 of the Act. But still that fact cannot be wholly excluded from consideration in order to determine whether the petitioner is entitled to the discretionary remedy under article 226 of the Constitution. If the assessment order is not void but is only erroneous in law, the assessee is obliged to get the assessment order set asideIf the assessment order is merely erroneous in law, the assessee cannot claim refund without getting the assessment order quashed by availing himself of the alternative remedy provided under the statute. He cannot invoke the jurisdiction of a civil court for questioning the legality or propriety of the assessment order and if that order cannot be questioned, then the amount paid or recovered pursuant to that order cannot be directed to be refunded by a civil court. It that be so, then this court exercising jurisdiction under article 226 of the Constitution must necessarily take into account whether a party who has by his own laches has not chosen to avail himself of the alternative remedy provided by the statute for questioning the erroneous decisions of the assessing authorities by taking the matter in appeal or in revision and also by reference to this court and has allowed the assessment orders to become final, which assessment orders are not allowed by the statute to be questioned even by way of a civil suit, should be granted the indulgence to invoke the extraordinary jurisdiction of this court for the grant of the discretionary relief. Even this court cannot direct refund of tax paid in pursuance of such orders without quashing the assessment orders themselves. If the assessment orders have to be quashed, this court cannot shut its eyes to the long interval between the orders of assessment and the writ petitionsBut the petitioners would not be entitled to refund of tax as a matter of course merely because it has been paid under a mistake.The right to such refund is subject to questions of estoppel, waiver, limitation and the like. While for a suit for refund of money paid under a mistake, the period of limitation is three years from the date of discovery of the mistake, for claiming the same relief by way of a petition under article 226 of the Constitution of India, the petitioner cannot contend that the filing of such petition within a period of three years is without unreasonable delay. Having regard to the facts and circumstances of the case the court may consider the delay unreasonable even if it is less than the period of limitation prescribed for a civil action for the remedy of refund. But delay must always be held to be unreasonable if the petition is filed beyond three years. Among the facts and circumstances which would be relevant for holding whether the petitioner is entitled to refund or not, the fact that the assessment order is not void but is merely erroneous in law or on facts would be a relevant circumstance. If the assessment order cannot be questioned in a civil court, the refund of tax also cannot be ordered by a civil court. That being so, even in a petition under article 226 of the Constitution there cannot be an order of refund without the assessment order itself being quashed. And in considering whether the assessment order also should be quashed the fact that the petitioner has not availed himself of the alternative remedy provided under the Act cannot be ignored. The further fact that for getting the assessment order quashed the jurisdiction of this court should have been invoked within the period of six months, as repeatedly laid down by this court, must also be kept in view. If the petition is filed beyond that period, the petitioner must satisfactorily explain the delay in approaching this court. Even if the court is satisfied having regard to all the circumstances that the petitioners are entitled to refund of the tax, the petitioners may still not be granted this discretionary relief if it results in retention of the sales tax collected by them from the public and imposes the burden of refunding the tax on the State which it had collected under a valid assessment order. The discretionary jurisdiction of this court should be exercised for public good and not to facilitate the individual to make an unlawful gain at the expense of the public on the one hand and State on the other. The extraordinary jurisdiction of the High Court under article 226 must advance the cause of justice and not subserve the ends of the individual for retaining the sales tax illegally collected by him.Examining the petitioners claim of refund having regard to the principles noted above we find that the petitioner in W.P. No. 1426 of 1967 allowed the assessment orders in respect of1 to become final. He did not prefer any appeals either to the Appellate Assistant Commissioner or the Tribunal. Nor did he canvass the correctness of these assessments by moving this High Court by way of a tax revision case. The last of such assessment orders was made in 1962. In W.P. No. 1427 of 1967 the assessment orders as confirmed by the Assistant Commercial Tax Officer on appeal relating to the assessment yearsr of that writ petition, were likewise allowed to become final. The same is the case with regard to the assessment orders for the assessment yearsr of Writ Petition No. 3053 of 1967. The writ petitions were filed in 1967, i.e., in all cases after a period of six months and except in regard to the assessments for the assessment years5 concerning W.P. No. 3053 of 1967, all were made beyond three years of the filing of the writ petition. This ground itself is sufficient to disentitle them to the discretionary relief under article 226 of the Constitution. According to the petitioners they became aware of this payment under a mistake on account of the decision of the Sales Tax Appellate Tribunal in T.A. 861/61 and5 dated 6th December, 1965, holding green ginger to be vegetable. If that be so, there was no reason why they should have waited for nearly one year and three months for filing the writ petitionsMr. Veerabhadrayya, learned counsel for the petitioners contends that T.R.Cs. were filed against the decision of the Tribunal and they were dismissed only on 23rd November, 1966.If the mistake was discovered by the decision of the Tribunal there was no reason to await the decision in the T.R.Cs. They also stated that the Government themselves had excluded green ginger and garlic from out of vegetables by G.O.Ms. No. 1949 dated 3rd December, 1965, and thus subjected them to tax. If that be so, the amendment must have put them on enquiry as to whether they had not paid the tax under a mistake for, according to the amendment, green ginger and garlic were vegetables and would be exempted from tax, unless specially excluded from the entry vegetables. That would have been an occasion for a diligent assessee to claim refund. But the petitioners did not take any steps then. This exclusion of green ginger and garlic from the entry vegetables was even prior to the decision of the Tribunal. More than anything else, one fact which must strongly weigh against the claim of the refund of sales tax by the petitioners is that the petitioners have already collected the tax and any direction in these writ petitions to refund such tax as they have paid would result in allowing them to retain the tax illegally collected from the consumers and thus make an unauthorised gain for themselves, while the State, which is in charge of the public funds and which has collected the tax as per the final orders of assessment, would be now obliged to return the same for the personal benefit of the dealer at the expense of the public from whom he has collected the tax. The extraordinary jurisdiction of this court must not be allowed to be invoked and the discretionary relief granted for the benefit of a private individual in this manner at the expense of the public and the State. The discretionary jurisdiction of this court under article 226 of the Constitution must not be allowed to be exploited to defeat the ends of justice.