- (1.) Mssrs G. S. Dugal and Co. Ltd. is a private limited company carrying on business as a building contractor. The company entered into certain works contracts with the State of orissa for construction of buildings, dams and excavation of spillways etc. The company was registered as a dealer under the orissa Sales Tax Act, 1947, from the quarters ending 30/06/1949 On the footing that the material used in the construction of buildings, dams etc. was sold to the State, the Sales Tax Officer, Cuttack, made aconsolidated assessment on 7/04/1954' and directed the appellant to pay Rs. 1,30,000. 00 as sales tax. This amount was realised by deducting it out of the outstanding bills of the company and not by taking any coercive process for recovery. Relying upon the judgment of the Madras High court in Gannon Dunkerley and Co. v. The State of Madras', the company, on July 27, 1954. preferred a petition before the High court of orissa under Article 226 of the Constitution praying for a writ in the nature of mandamus or any other direction restraining the State of orissa from levying sales tax from the company in respect of the contracts for construction of buildings etc. in the State or "at least until the completion of the works under the contracts". In the petition no relief for refund of tax was claimed.
(2.) The High court by order dated 21/04/1958, following the decision of this court in State of Madras v. Messrs Gannon Dunkerley and Co. Ltd. 2, which affirmed the decision of the Madras High court in Gannon Dunkerley and Co. v. The State of Madras, declared that the assessment of sales tax in respect of building or works contracts was not in accordance with law and directed that no steps by certificate proceedings or otherwise be taken against the company to realise sales tax in respect of those contracts. The High court also proceeded to direct "that portion of the tax paid, refund of which is barred by limitation under section 14 of the orissa Sales Tax Act, 1947, on the date of the filing of this application under Article 226 of the Constitution, shall not be refunded. . . . . . That portion of the tax paid refund of which is not barred by limitation on the date of the filing of this application shall be refunded on proper application, according to. law. "
(3.) It is common ground before this court that tax under the orissa Sales Tax Act was not leviable in respect of works contracts executed by the company. That was also conceded before the High court, and an order declaring that assessment of sales tax in respect of building or works contract was invalid was made. This appeal filed with specialleave is directed only against that direction relating to the refund of the amount of tax collected from the company under orders of assessment made more than 24 months before the date of the petition in the High court.;