M.M.Dutt, J. - (1.) This appeal is at the instance of the sales tax authorities and it is directed against the judgment of D. Pal, J., whereby the rule nisi obtained by respondent No. 1, M/s. Hindusthan Construction Co. Ltd., was made absolute.
(2.) Respondent No. 1 carries on the business of engineers and contractors. It is also an assessee under the Bengal Finance (Sales Tax) Act, 1941. Respondent No. 5, the Corporation of Calcutta, invited tenders for the completion of Dry Water Flow Channel for "Dr. Dey's Kulti Outfall Scheme" for construction of channels. Respondent No. 1 submitted tenders which were accepted by respondent No. 5. A copy of one of such tenders has been annexed to the writ petition and marked with the letter A. The contracts included construction works and also manufacture of bricks. There was a further agreement between respondent No. 1 and respondent No. 5 to this effect that if sales tax was payable on the transaction entered into by them, the same would be realised by respondent No. 1 from respondent No. 5. The sales tax authorities realised from respondent No. 1 a sum of Rs. 53,045.10 during the period between 1951 and 1955 under the Bengal Finance (Sales Tax) Act, 1941. In terms of the said agreement, respondent No. 5 reimbursed respondent No. 1 a sum of Rs. 40,871 towards sales tax paid by it. Respondent No. 1 asked for the balance amount of the sales tax, but after some correspondence, respondent No. 5 ultimately refused to pay the same.
(3.) Thereafter, a suit was instituted by respondent No. 5, the Corporation of Calcutta, in the Original Side of this Court being Suit No. 1618 of 1960 against respondent No. 1 claiming refund of the said sum of Rs. 40,871 paid to respondent No. 1 on account of sales tax. It was inter alia alleged in the plaint of that suit that sales tax was not payable by respondent No. 5 for the completion of contracts of Dry Water Flow Channel and, as such, respondent No. 1 was bound to refund the said sum. Respondent No. 1 also filed a suit against respondent No. 5 in the Original Side of this Court being Suit No. 467 of 1961 for the recovery of the sales tax from respondent No. 5. Both these suits were heard together by S.K. Hazra, J. and his Lordship by his judgment dated 1st March, 1972, decreed the suit of respondent No. 5 and dismissed that of respondent No. 1. It was inter alia held by Hazra, J., that the contracts between respondent No. 1 and respondent No. 5 were works contracts and the State Government was not competent to charge and realise sales tax on such contracts. In that view of the matter, his Lordship found that as no sales tax was payable, respondent No. 5 was not liable to reimburse respondent No. 1 the amount of sales tax paid by it. It was further held that the payment and realisation of sales tax were made on account of mistake of law. It was the case of respondent No. 1 in the writ petition that upon perusal of the judgment of Hazra, J., it had discovered for the first time in March, 1972, that the said sum of Rs. 53,045.10 was paid by it to the sales tax authorities for the years 1951-55 under a mistake of law inasmuch as the transactions did not constitute sale of goods. It was contended that the mistake of law was common to both respondent No. 1 and the sales tax authorities. Respondent No. 1, accordingly, prayed for the quashing of the orders of assessment dated 29th March, 1955 and 17th August, 1959, by a writ in the nature of certiorari. Further, it was prayed that the sales tax authorities might be directed to refund the said sum of Rs. 53,045.10, which was realised by them from respondent No. 1 on account of sales tax for the said years.;