Corporation Bank Vs Saraswati Abharansala And Another (Supreme Court of India)
Explore the Supreme Court judgment on Corporation Bank vs. Saraswati Abharansala regarding excess Sales Tax collection. Learn how the retrospective effect of a notification led to a rate reduction, compelling the state to refund the excess amount. Discover the legal implications, the court’s interpretation, and the directive for the state to refund the tax with interest. Stay informed about key legal precedents and the principles of statutory construction.
The first respondent is a dealer in bullion gold. It entered into transactions of purchase of gold from the appellant herein during the period 6th April 1999 and 10th December 1999. The total transactions during the said period were for a sum of Rs.423748518/-. Indisputably the rate of tax which was prevailing at the relevant time was 1%. The amount of sales tax at the said rate was collected from respondent No.1. The amount so collected, indisputably had been deposited with the sales tax authorities.
On or about 27th December 1999 vide S.R.O. No.1075/99 the rate of sales tax was reduced from 1% to 0.5% which was given a retrospective effect from 1st of April, 1999. The said Notification reads thus:-
“9 Any dealer Sale of bullion and specie to the registered dealer within the State.
This notification shall be deemed to have come into force on the first day of April 1999”
It was given a retrospective effect.
Held by Hon’ble Supreme Court:
In view of the admitted fact that tax had been collected and paid for the period 6th April, 1999 and 10th December, 1999 @ 1 % of the price which having been reduced from 1st April, 1999 to 0.5 %, the State, in our opinion, is bound to refund the excess amount deposited with it.
Furthermore the Notification having been given a retrospective effect must be construed on the touchstone of the purpose and object it sought to achieve. Principle of purposive construction should be applied in a case of this nature to find out the object of the Act. When a statute cannot be considered in such a manner which would defeat its object, the legislature is presumed to be aware of the consequences flowing therefrom. The statute should be considered in such a manner so as to hold that it serves to seek a reasonable result. The statute would not be considered in such a manner so as to encourage defaulters and discourage those who abide by the law.
The statute furthermore, it is trite, should be read in the manner so as to do justice to the parties. If it is to be held, without there being any statutory provision that those who have deposited the amount in time would be put to a disadvantageous position and those who were defaulters would be better placed, the same would give rise to an absurdity. Construction of the statute which leads to confusion must be avoided.
Thus the condition of non refund of the excess amount must be held to have been repealed by necessary implication as the rate of tax so applied to the transaction of sale of gold bullion was with retrospective effect.
As all the facts are admitted and the State had refused to refund the excess amount of tax realized from the appellant, in our opinion, the writ petition was maintainable.
We are, therefore, of the opinion that the interest of justice would be served if instead of the appellant refunding the amount to the first respondent and later claiming refund from the authorities, if the State of Kerala is directed to refund the amount of tax collected with interest at the rate of 10% per annum to the first respondent at an early date, and not later than four months from the date of communication of this order. It is ordered accordingly. If, however, the amount is not paid within the aforementioned period, the outstanding amount shall carry interest @ 15 % per annum.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
1. Leave granted.
2. First respondent is a dealer in bullion gold. It entered into transactions of purchase of gold from the appellant herein during the period 6th April, 1999 and 10th December, 1999. The total transactions during the said period were for a sum of Rs.423748518/-. Indisputably the rate of tax which was prevailing at the relevant time was 1%. The amount of sales tax at the said rate was collected from respondent No.1. The amount so collected, indisputably had been deposited with the sales tax authorities.
3. On or about 27th December, 1999 vide S.R.O. No.1075/99 the rate of sales tax was reduced from 1% to 0.5% which was given a retrospective effect from 1st of April, 1999. The said Notification reads thus :-
