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2000 DIGILAW 90 (AP)

Crane Betel Nut Powder Works, Guntur v. Commercial Tax Officer, Guntur

2000-02-11

B.PRAKASH RAO, P.VENKATRAMA REDDY

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P. VENKATARAMA REDDI, J. ( 1 ) HEARD both the Counsel at the admission stage. ( 2 ) THE petitioner questions the constitutionality of the amendment effected to Section 19 of the A. P. General sales Tax Act by Act 8 of 1997 and seeks a direction to the 2nd respondent to dispose of the condone delay application and the appeals filed for the years 1985-86 to 1990-91 and 1995-96 on merits. But the said amendment, the appellate authority is empowered to condone the delay in filing an appeal only upto 30 days. The appeal for the year 1990-91 was filed with a delay of 6 years and 3 months. Appeals for the earlier years will be much more. The appellate deputy Commissioner by his order dated 15-3-1999 declined to admit the appeal on the ground that it was not within his competence to admit the appeal after the expiry of total period of 60 days from the date of service of assessment order. The ground for filing the appeal is that the Entry under which the betel-nut-powder was subjected to higher rate of tax vide entry 158 (a) of the First Schedule to APGST act was unconstitutional on the analogy of the decision of Supreme Court in 107 STC 586. It is averred in the petition for condonation of delay that the petitioner came to know of the correct legal position regarding the invalidity of Entry 158 (a) of the I Schedule on 20-11-1998 on the basis of the advice given by his Chartered accountant. The alleged mistake of law in suffering tax at a higher rate was pleaded. ( 3 ) IT may be stated that the decision of the Supreme Court in Anand Kumar Agencies was rendered on 6-11-1997. In that case, entry 24 (a) (Groundnut oil) was declared to be unconstitutional. It was reported in stc during the year 1997 itself. One year later, the appeal was filed with a petition to condone the delay. As already stated in the absence of provision for the condonation of delay beyond 30 days, the appellate authority rejected the application. Hence, this writ petition. It was reported in stc during the year 1997 itself. One year later, the appeal was filed with a petition to condone the delay. As already stated in the absence of provision for the condonation of delay beyond 30 days, the appellate authority rejected the application. Hence, this writ petition. ( 4 ) WE are of the view that there is no need to go into the Constitutional validity of the impugned provision by which the power to condone the delay was restricted upto 30 days in the case of appeal filed before the appellate Deputy Commissioner. The petitioner, in our view, is not entitled to seek relief under Article 226 of the constitution for more than one reason. ( 5 ) IT is clearly stated in the petition for condonation of delay (copy of which has been placed before us on our Directions) that the petitioner has been collecting the tax at 6 per cent on the sales of betel-nut powder upto 31-3-1997 and at 10. 5% thereafter upto 30-9-1998 i. e. , at the rate specified in the Entry 158 (a ). Therefore, the inevitable effect of allowing or facilitating the petitioner to secure relief from the appellate authority would be to enrich him unjustly. The remedy under Article 226 cannot be sought to get unjust benefit either directly or indirectly. On an exhaustive review, it has been authoritatively laid down by the majority of the Judges of the supreme Court constituting Special Bench in Mafatlal Industries vs. Union of India1 as follows. "a claim for refund, whether made under the provisions of the Act as contemplated in proposition (i) above or in a suit or writ petition in the situations contemplated by proposition (ii) above, can succeed only if the petitioner/plaintiff alleges and establishes that he has not passed on the burden of duty to another person/other persons. His refund claim shall be allowed/decreed only when he establishes that he has not passed on the burden of the duty or to the extent he has not so passed on, as the case may be. Whether the claim for restitution is treated as a constitutional imperative or as a statutory requirement, it is neither an absolute right nor an unconditional obligation but is subject to the above requirement,as explained in the body of the judgment. Whether the claim for restitution is treated as a constitutional imperative or as a statutory requirement, it is neither an absolute right nor an unconditional obligation but is subject to the above requirement,as explained in the body of the judgment. Where the burden of the duty has been passed on, the claimant cannot say that he has suffered any real loss or prejudice. The real loss or prejudice is suffered in such a case by the person who has ultimately borne the burden and it is only that person who can legitimately claim its refund. But where such person does not come forward or where it is not possible to refund the amount to him for one or the other reason, it is just and appropriate that that amount is retained by the State, i. e. , by the people. There is no immorality or impropriety involved in such a proposition. The doctrine of unjust enrichment is a just and salutory doctrine. No person can seek to collect the duty from both ends. In other words, he cannot collect the duty from his purchaser at one end and also collect the same duty from the State on the ground that it has been collected from him contrary to law. The power of the Court is not meant to be exercised for unjustly enriching a person. " ( 6 ) TRUE, we are not directly concerned here with the claim for refund of the tax paid, but the endeavour of the petitioner to challenge the amendment to Section 19 is only a part of his design to get such relief in the hands of the appellate authority. The petitioner has moved this Court under article 226 to have the way clear for condonation of delay by the appellate authority so as to eventually secure the benefit of refund despite the fact that he passed on the burden of tax to his buyers and therefore suffered no prejudice. In view of what the Supreme Court observed, article 226 cannot be allowed to be used by a person who in the ultimate analysis seeks to have unjust enrichment. ( 7 ) THERE is another facet of the same issue. In view of what the Supreme Court observed, article 226 cannot be allowed to be used by a person who in the ultimate analysis seeks to have unjust enrichment. ( 7 ) THERE is another facet of the same issue. Section 33-BB enjoins that where a levy and collection of tax is held invalid by any judgment or order of a Court or tribunal, it shall not be necessary to refund any such tax unless it is proved by the dealer that the tax has not been collected from the purchaser. Thus, even if the appellate authority grants relief on the footing that the levy of higher rate of tax under Entry 158 (a) is illegal, the petitioner will not be entitled to get the refund by virtue of the embargo placed by section 33-BB. Thus, in effect, the relief if any obtained from the appellate authority would be futile or ineffective for the reason that the petitioner will not be able to obtain the refund in view of what is ordained by section 33-BB. This is another reason why we refrain from deciding the question whether the appellate authority should have the power to condone the delay of any length. Thirdly, the appellate authority which is a creature of the Statute cannot ignore Entry 158- (a) nor can it hold that on the analogy of the decision in Anand kumar s case, (supra) Entry 158-a is also unconstitutional. In other words, the appellate authority cannot grant any relief so long as Entry 158- (a) is on the Statute book. The condonation or non-condonation of delay would not, therefore, make any difference. ( 8 ) FOR the above reasons, we dismiss the writ petition while refraining from expressing any view on the validity of the impugned amendment made to APGST Act by Act 8 of 1997. No costs.