PARRY AND COMPANY LIMITED Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) SUIT for refund of a sum of Rs. 51, 954.36, being Rs. 43, 659.15 with interest thereon at 6 per cent per annum from 18th January, 1969. The plaint allegations, inter alia, are as follows : The plaintiff is a dealer in engineering equipments and act on behalf of their principals, Messrs. Alfred Herbert (India) Private Limited, for goods imported under the import trade control permit issued to various customers. As the plaintiff's principals were importing and supplying the goods, the Controller of imports permitted the customers to authorise the plaintiff's principals to import the goods on their behalf. According to the terms arrived at between the parties, the plaintiff's principals are entitled to payment of the price of the goods supplied and the sales tax in full when they presented the invoice for the goods. All such transactions are sales effected in respect of goods imported on actual user's licence obtained by the customers from the Chief Controller of Imports and Exports and letters of authority given to the plaintiff's principals to import the goods. The transactions were taxed by the first defendant as local sales for the assessment year up to 1966-67. For the said assessment year, the second defendant passed the assessment order MGST 431/66-67 on 15th March, 1968, including a turnover of Rs. 17, 46, 368.59 as taxable under the provisions of the Tamil Nadu General Sales Tax Act. This turnover represents sales in the course of import, and it would be covered by the ratio of the decision laid down in K. G. Khosla and Co. (P.) Ltd. v. Deputy Commissioner of Commercial Taxes The Supreme Court delivered the judgment on 18th January, 1966, and it was actually reported on 1st May, 1966, in the Law Journals. On 14th October, 1968, the third defendant wrote to the plaintiff stating that these transactions would fall within the decision of the Supreme Court. Thereupon the plaintiff filed Writ Petition No. 3544 of 1969 (Parry & Co. Limited v. The State of Madras to direct the sales tax authorities to investigate the character of the transactions in the light of the Supreme Court decision and also to refund the sum of Rs. 43, 659. On 23rd November, 1971, the writ petition was dismissed. Consequently, the present suit has been filed, claiming refund on the ground of mistake of fact and mistake of law.The defence taken by the first defendant and the second defendant is that the suit is not maintainable in law and more so in view of the provisions of section 51 of the Tamil Nadu General Sales Tax Act, 1959. This apart, the facts of this case differ from the facts of the decision in K. G. Khosla and Co. (P.) Ltd. v. Deputy Commissioner of Commercial Taxes. It is also submitted that the plaintiff preferred an appeal to the Appellate Assistant Commissioner, and in the appeal, it did not dispute the liability to tax on the turnover now in dispute. Nor were any materials placed before the concerned tax authorities to decide this question. Therefore, it cannot be contended that the plaintiff has committed any mistake. Nor can it be said that the assessment order is ultra vires. Inasmuch as the assessment order has become final, the same cannot be challenged in an indirect way by filing the suit. Hence the suit is liable to be dismissed. The defendants 3 and 4 have filed a common written statement, setting out the nature of the transactions. According to them, in view of the decision of the Supreme Court, the State is prohibited from imposing the sales tax on the sale or purchase of goods, where such sales take place in the course of import of the goods into the territory of India. The plaintiff should contest the liability to sales tax only with the Tamil Nadu Government. These defendants do not admit that the plaintiff discovered the mistake only from the third defendant on 14th October, 1968. The plaintiff is barred from maintaining the suit, having already filed a writ petition. Inasmuch as no reservation has been made for any relief to be pursued against the defendants, the suit is barred. On these pleadings, the following issues have been set down for trial :1. Whether the transactions in question are in the course of import "

(2.) WHETHER the plaintiff is estopped from questioning the legality of the assessment order in so far as it relates to the disputed turnover "

(3.) WHETHER the plaintiff is entitled to any interest "