Decided on October 29,1953



- (1.) THIS is an appeal against the judgment and decree of the principal Subordinate Judge, Vizagapatam , in o. S. No. 110 of 1947. the plaintiffs are the appellants. The facts are briefly these. The plaintiffs filed the suit for a declaration that the levies, impositions and collections of sales tax from them by the defendant, the State of Madras represented by the Collector of Vizagapatam (now the State of Andhra represented by the Collector of Vizagapatam), for the years 1944-45 and 1945-46 were illegal and ultra vires as they were mere commission agents not liable to sales tax under Section 8 of the Act, and for the recovery of Rs. 5, 019-12-0, thus illegally collected from them, with subsequent interest and costs. The defendant vigorously contested the suit. The learned Subordinate Judge framed the following issues :- 1. Whether the business on the turnover of which the suit amount was levied, was one of commission agency liable to be exempted under the terms of the licence granted to plaintiffs "
(2.) WHETHER the plaintiffs have no right of suit in the Civil Court" Whether the suit claim is barred by limitation under section 18 of the Madras General Sales Tax Act " Whether the plaintiffs are partners of an unregistered firm and whether on that account the suit is not maintainable " To what reliefs are plaintiffs entitled " He treated issue (3), as a preliminary issue, and held that the suit was barred by limitation under Section 18 of the Madras General sales Tax Act, prescribing a limitation of six months, as it was filed only on 5th November, 1947, whereas the assessment orders were passed on 29th March, 1946, and 1st March, 1947. He rejected the plaintiffs'contention that Section 18 would not apply to the facts of this case and that, even if it applied, limitation would be saved, as the final order of revision regarding the assessment for 1944-45 was passed only on 15th May, 1947, and the suit was filed within six months thereafter, and the final appellate order regarding the assessment for 1945-46 was passed only on 19th May, 1947, and the suit was filed within six months thereafter. The learned Subordinate Judge dismissed the suit with costs on 16th September, 1948, without giving any finding on issues 1, 2 and 4. Hence this appeal. I have perused the records and heard learned counsel for the appellants and the learned Government Pleader contra. Mr. Ramanarasu for the appellants relied on a decision of mine on the very same point (delivered long after the lower Court's judgment) in the State of Madras represented by the District Collector of Tinnevelly v. A. M. N. A. Abdul Kadar tharaganar Firm I held there that a suit for recovering an amount said to have been collected illegally from the plaintiff as sales tax by the States is governed by Article 62 of the Limitation Act, giving three years, and that section 18 of the Madras General Sales Tax Act would have no application in such cases. I held that Section 18 of the Sales Tax Act covers only cases for compensation or damages against tortious or criminal acts committed by government officers and will not cover a suit for refund of taxes illegally collected, or alleged to be illegally collected, or even taxes collected in excess by sheer error. I held further that Article 16 of the Limitation Act will also no application to such a case, where the tax was merely recoverable as arrears of land revenue and the claim was not made by Revenue authorities on account of arrears of revenue, or on account of demands recoverable as such arrears, and where the tax had also been paid within the 15 days prescribed and had not become a tax liable to be recovered as arrears of land revenue. So, prima facie, the lower Court judgment must be set aside, as erroneous, unless the ruling relied on by Mr. Ramanarasu will not apply to the facts of this case. Mr. E. Venkatesan, for the learned Government Pleader, frankly admitted that he could not distinguish the facts of this case from the facts in that case. He also conceded that the above ruling, relied on by Mr. Ramanarasu, would apply, as it has not been overruled. In that view, it is unnecessary to consider the contentions of Mr. Ramanarasu regarding the saving of limitation even under Section 18 of the General Sales Tax Act. The judgment and decree of the lower Court are set aside, and the suit is remanded to it for fresh hearing and disposal on issues 1, 2, 4 and 5, issue 3 being found in the negative and in favour of the plaintiffs. In the circumstances, the costs of this appeal will follow, abide and be provided for by the lower Court when disposing of the suit afresh. The Court fee paid by the appellants will be refunded to them. Suit remanded.;

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