- (1.) THE petitioner company carries on business as Engineers and Contractors and is registered as a dealer under the bengal Finance (Sales Tax) Act, 1941 (hereinafter referred to as the Act ). Between January and March, 1952 the respondent No. 5, the Corporation of calcutta invited tenders for completion of Dry Water Flow Channel for "dr. Dey's Kulti Outfall Scheme" for construction of channel. The petitioner is stated to have entered into such contracts with the Corporation of Calcutta. Specimen copy of such tender has been annexed being Annexure 'a' to the petition. From the said tender it appears that the petitioner has to carry out and complete the whole of the works in accordance with the specifications and the terms of the agreement. It is stated that all such contracts including manufacture of bricks were works contracts and were executed in 1953. In terms of the letter dated 24. 7. 1971 being annexure 'b' to the petition it was agreed that if any sales tax is payable on the transactions involved in the execution of the said contracts, such sales-tax is to be realised from the, Corporation of Calcutta separately. It appears that by a letter dated 22nd September, 1953 the Commissioner of Commercial Taxes wrote to the Commissioner of Calcutta Corporation that the petitioner being a dealer registered under the Act is liable to pay tax to the government on the sale price of the contracts executed by it in favour of the corporation of Calcutta.
(2.) THE petitioner filed its returns as a dealer and assessments were made and a sum of Rs. 53,045. 10 was determined to be the sales tax in respect of the transactions involved in the execution of the contracts with the respondent No. 5. The said sum represented the sales tax for the years 1951-52 to 1954-55. The petitioner deposited the said amount with the Reserve Bank of india. In terms of the agreement between the petitioner and the respondent no. 5, the petitioner realised a sum of rs. 40,871/- from the said respondent no. 5 by way of reimbursement of the taxes paid by it. The respondent No. 5, thereafter filed a suit against the petitioner in this Court for refund of the said sum of Rs. 40,871/ - on the ground that sales tax was not payable by the said respondent No. 5 in respect of contract of Dry Water Flow Channel. The said suit being suit No. 1618 of 1960 came up for hearing before Hazra, J. By a judgment delivered on 1st March, 1972, the said suit was decreed and the petitioner was directed to pay the sum of rs. 40,871 - along with the interest thereupon at the rate of 6% per annum. His Lordship interpreting the agreements in question with the Corporation of Calcutta held them as contracts for construction and that manufacture of bricks were made for the use of the construction work and the using of bricks was part of construction contracts. Proceeding on that view it was held in that case that the principles laid down by the supreme Court in the case of (5) State of Madras v. Gannon Dunicerley and Co. (A. I. R. (1958) S. C. 560) and (1)Dakhneswar Sarkar and Bros. Ltd. v. Commercial Tax Officer and ors. (A. I. R. 1957 calcutta 283) were attracted and no sales tax was payable on the said contracts. It has been further held that materials used for construction contracts could not be separately assessed for payment of sales tax. The learned Judge further held that when payment was made by the Corporation of Calcutta on 27th September, 1957 to the petitioner the payment was made under mistake of law and fact and hence the petitioner was directed to refund the amount of rs. 40, 8711 to the Corporation of calcutta.
(3.) THE said judgment as already stated was delivered on 1st March, 1972. The petitioner thereafter moved this court under Article 226 of the Constitution for quashing assessment orders dated 29th March, 1956 and 7th August, 1959 being annexure E to the petition and for refund of the sum of es. 53,045. 10 collected from it by virtue of the assessment orders for years 1951-52 to 1954-55. On these allegations a rule nisi was issued on 8th June, 1972.;