Law: Sales Tax Act, (III of 1951)

Section: 27,27(2)

(a) Sales Tax Act (III of 1951)---S. 27 (2)-Refund-­Application made on prescribed form within period of limitation­ Claim for refund of excess amount cannot he refused on ground that assessee had collected such amount unauthorisedly from his customers. Where the Department contended that the assessee had collected the amount unauthorisedly from his customers, he was not entitled to retain the unauthorised collection of tax and his claim for refund of the excess amount was refused, on this ground: Held, that the contention of the Department cannot prevail on the clear language of section 27 of the Sales-tax Act. The requirement of this section is that once the assessee satisfies the Sales Tax Officer that the amount of tax paid by him exceeds the amount with which he is properly chargeable under the Act, he is entitled to the refund of such excess. This provision of law makes no exception in respect of the amounts realised by an assessee unauthorisedly from his customers and paid to the Department. In considering the claim of assessee for refund of the excess amount paid by him as tax all that has to be examined is whether he has applied on the prescribed form (the failure to do this may not be fatal) within the period of limitation and whether the amount of tax paid by him exceeds the amount with which he is properly chargeable under the Act. No other extraneous consideration can be imported for refusing his claim. The question that the assessee had realised the amount in question ; as unauthorised tax from his customers is totally irrelevant for consideration of his claim to the refund under section 27 of the Act. The crucial test is whether the excess amount claimed by the assessee was,-in law, payable by him as tax or not. An assessee cannot in law be compelled to pay any amount as tax which is not payable by him, and if he has unwittingly or otherwise paid such tax, the same is to be refunded to him. The argument that the assessee cannot be permitted to retain the unauthorised collection of tax made by him from his customers applies with equal force to the Department as well. The Department itself cannot in law retain these amounts unless these are payable…

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