Salil Kumar Hazra, J. - (1.) The plaintiff Corporation of Calcutta is claiming in this suit repayment or refund of Rs. 40,871/- from the defendant, as money paid to the defendant by mistake of fact and law.
(2.) The defendant carries on business as engineer and contractor. In Janu-ary/March, 1952, the plaintiff Corporation of Calcutta invited tenders for completion of Dry Water Flow Channel for 'Dr. Dey's Kulti Outfall Scheme', for construction of channels. The defendant submitted tenders. Three contracts were entered into between the plaintiff and the defendant. The first contract was executed on April 29, 19.52, the second contract was executed on April 29, 1952 and the third contract was executed on November 1, 1952. The contracts were made as per specifications and tenders of the defendant. Tenders were sent along with forwarding letters of the defendant. Each of the forwarding letters of the defendant to the plaintiff provided as follows:-- "We have not provided for sales tax in our quotation. Any sales tax payable on account of this work will be to your account." It was expressly and/or impliedly agreed by and between the parties that in case any sales tax was payable in respect of the said contracts by the defendant to the State of West Bengal, the plaintiff will reimburse the defendant for the same. In terms of the said agreement between the parties the works of construction of dry water flow channel was carried on by the defendant and completed in the year 1953. The defendant, from time to time, submitted bills to the plaintiff, for sales tax which the defendant claimed to have paid to the State of West Bengal, in respect of the said contracts. The defendant stated that the total amount so paid by the defendant was Rs. 54,498.42 p. The particulars of the same will appear as hereunder: JUDGEMENT_420_AIR(CAL)_1972Html1.htm The defendant wrote to the plaintiff on January 10, 1957, demanding from the plaintiff an advance of Rs. 50,000/- against the sum of Rs. 54,498.42 paise, which the defendant stated that they have already paid as sales tax to the State of West Bengal. On September 27, 1957, the plaintiff advanced a total sum of Rs. 40,871/- to the defendant for sales tax, relying and/or acting on the representation of the defendant. In or about April 1958, the plaintiff discovered that the said payment of Rupees 40,871/- was made by mistake of fact and law. On September 25, 1958, the plaintiff wrote to the defendant asking for refund of the amount received by the defendant from the plaintiff on account of sales tax. The plaintiff enclosed with the said letter, a copy of the report and opinion of the law officer o the plaintiff, to the effect that the contracts entered into between the parties were construction contracts and bricks manufactured on Corporation land and supplied at a cost fixed under the contracts by the contractors and the Corporation for exclusive use of the work to be done, as such there was no liability to pay sales tax on such contract in view of the decision of the Supreme Court in and also the judgment of the Calcutta High Court in. According to the plaintiff the payment of Rs. 40,871/- was made by mistake and the mistake was discovered in or about April, 1958 after the decision of the Supreme Court reported in 1958 SC page 560 (Gannon Dunkerley's case), holding, that no sales tax is payable on construction contracts as stated above, became known to the plaintiff. As the said amount was not refunded by the defendant, this suit was instituted on 15th November, 1960. On February 10, 1961, the defendant filed its written statement. In the written statement the defendant denied that the payment of sales tax was made by the plaintiff by mistake of fact and law. The defendant stated the contract in respect of manufacture of bricks at Kantatola is not a construction contract within the meaning of the Supreme Court decision as alleged. The defendant denied that the plaintiff is entitled to claim refund. The written statement was amended on September 5, 1963. In the amended written statement the defence, inter alia, was that the defendant in good faith paid the sum of Rs. 54,498.42 p. as sales tax at the request and/or with the knowledge and/or consent of the plaintiff, who induced the defendant to believe that it was obligatory to pay sales tax as aforesaid and the plaintiff would reimburse the defendant for such payment. The plaintiff not only induced the defendant to pay sales tax as aforesaid but also paid the sum of Rs. 40,871/- as and by way of indemnification and/or reimbursement. Further the plaintiff was estopped from denying the validity of the payment of the sales tax and/or its liability to reimburse or indemnify the defendant for the same. The following issues were raised before me: ISSUES : 1. Was the sum of Rs. 40,871/- advaced by the plaintiff to the defendant by mistake of fact and/or law on the representation of the defendant that the sales tax was payable in respect of the contracts as stated in the plaint? 1 (a). Was there any agreement that the defendant would pay sales tax to the State of West Bengal on account of the plaintiff in relation to the contract in suit? 2 (a). Was the mistake of fact or law discovered in view of the decisions of the Supreme Court holding that no sales tax was payable on construction contracts? 2 (b). Were the contracts between the parties and in any event the contracts for manufacture of bricks at Kantatola 'Construction contracts' within the meaning of the Supreme Court decision?/ 3.Has the consideration for payment of Rs. 40,871/- wholly failed or become illegal or void as alleged in paragraph 12 of the plaint? 4. Is the plaintiff estopped from denying the validity of the payment of sales tax made by the defendant and/or its liability to reimburse and/or to indemnify as pleaded in paragraph 11 (c) of the Written Statement? 5. Is the suit bad for non-joinder of parties as the State of West Bengal has not been made a party in this suit? 6. Is the suit barred by the law of limitation? 7. To what relief, if any, is the plaintiff entitled? The real question in this suit is whether the sum of Rs. 40,871/- is refundable by the plaintiff as claimed in the plaint. The letters and documents between the parties are admitted and are included in Ext. A, the admitted brief of documents. The contracts between the parties entered into are also admitted. It seems to me that there is no proper scope of oral evidence in this case but since oral evidence has been given I am setting out hereunder the nature of oral evidence adduced by the parties to the suit. Two witnesses were examined on behalf of the plaintiff Corporation of Calcutta. The first witness is Bireswar Roy Chowdhury who was working as a sub-overseer in Dr. Dey's Kulti Outfall Scheme and the second witness is Ajit Kumar Rose, who is now assistant law officer of the Corporation of Calcutta. On behalf of the defendant only one witness was examined, Claud D'Souza who was serving in the defendant company in the accounts department and dealt with the sales tax matter of the defendant company. Bireswar Roy Chowdhury, Sub-Overseer in Dr. Dey's Kulti Outfall Scheme proved its three contracts which are admitted by the defendant Company. He said that the defendant Hindusthan Constniction Company was carrying on the works. He also stated that at the Corporation ground some bricks were manufactured by the defendant and the D.W.F. Channel was pitched with bricks. Some works on the roads were carried on. The soiling and edging of roads were carried on. The construction work was from first to 3rd mile of Dr. Dey's Kulti Outfall Scheme and also for 5th mile and 6th mile. The Hindusthan Constniction Company Ltd. supplied the labour. Bricks were manuafctured at Kantatolla brick-field belonging to the Corporation. The defendant had a work site not in the brick-field itself, but on the side of that brick-field they had a temporary construction where they had three work sites and the works of the channel were carried on by them from this earth. The defendant did excavation of earth for carrying out the works. From this earth they manufactured bricks, and with these bricks they carried on the works of the D.W.F. Channel. The bricks were manufactured out of Corporation earth for use in constructing those channels.
(3.) The second witness on behalf of the Corporation, Ajit Kumar Bose stated before me that, he actually assisted the Law Officer in drafting the report. The report arose out of sales tax claimed by the defendant payable in respect of the contract entered into between the Hindusthan Constniction Company and the Corporation, The defendant Company claimed sales tax from the Corporation in respect of the contract entered into by them and there were three contracts. The witness came to know after the decision passed by the Supreme Court that the Corporation is not liable to pay sales tax in accordance with the contract. The decision was with regard to the case of Cannon Dunkerley & Co. and in the report of the Chief Law Officer this decision has been referred. As a result of the Supreme Court decision the position was that the Corporation is not liable to pay sales tax, on the contrary, it can recover sales tax paid to the defendant compan by the Corporation of Calcutta by mistake. The contract being one contract for construction of road and the channel to be constructed pursuant to the outfall scheme framed by Dr. Dey, the Corporation was not liable to pay sales tax in respect of the three contracts. There was no sale of goods in these contracts. The contract being one or indivisible contract, sales tax was not payable. The bricks were utilised for preparation of the channel and for construction of the road. The bricks were manufactured out of earth obtained from the Corporation land. The payment of sales tax was made on September 27, .1957, before the decision of the Supreme Court in 1958. Prior to the decision of the Supreme Court the Corporation did not know or realise that sales tax was not payable. Payment was made by mistake to the defendant Company. He also stated that payment was made on September, 1957. The suit was filed on November 15, 1960. The High Court reopened after long vacation on November 14, 1960. On that date the Court was closed on account of the death of Mr. Hem Chandra Naskar who was a Minister of the Government of West Bengal. The Court re-opened on November 15, 1960 and on the re-opening day the suit was filed. The Court remained closed for long vacation from September 20, 1960 up to November 13, 1960.;