Ramachandra Iyer, J.
1. These are petitions under Article 226 of the Constitution for the issue of appropriate writs prohibiting the first respondent from enforcing payment of a portion of the sales tax collected but later refunded to the petitioners.
2. The petitioners are dealers in automobiles and their parts having their business at Madurai. In respect of their turnover during the years 1948-49 and 1949-50, they were provisionally assessed to sales tax and such tax was duly paid by them. In the course of their business, the petitioners, who are registered dealers, had collected from their customers the sales tax payable on goods sold to them. In the final assessment to sales tax, the Deputy Commercial Tax Officer included in the assessable turnover collections of sales tax made by the petitioners, with the result that a sum of Rs. 4,927-2-6 in respect of the assessment year 1948-49 and a sum of Rs. 13,369-9-3 in respect of the year 1949-50, were assessed as tax on the sales tax collected. Those amounts as also the tax assessed on the actual turnover were covered by the amount paid in respect of the provisional assessment and were duly appropriated therefrom. The liability to tax on the sales tax collected by treating it as part of the turnover was disputed inter alia by the petitioners both before the Deputy Commercial Tax Officer and the Commercial Tax Officer on appeal. Neither of them accepted the contention of the petitioners. There was a further appeal to the Sales Tax Appellate Tribunal. The Tribunal held that the petitioners were not liable to pay sales tax on the sales tax collections made by them and directed the refund of that portion of the amount representing the tax on sales tax collected which had been appropriated by the Department. An attempt on the part of the respondent to challenge the correctness of the order of the Tribunal, by way of revision to this Court, failed. While the revision petitions were pending in this Court, the Deputy Commercial Tax Officer issued refund voucher in Form C under Ruel 12 of the (Turnover and Assessment) Rules for the sums of Rs. 4,927-2-6 and Rs. 13,369-3-3 on 2nd March, 1953 and 7th May, 1953, respectively for the excess amounts collected for the years 1948-49 and 1949-50. An undertaking was taken from the petitioners that they would repay the tax refunded in case the High Court were to set aside the orders of the Sales Tax Appellate Tribunal. That contingency did not happen, as the High Court affirmed the order of the Sales Tax Appellate Tribunal. That was in January, 1954. In holding that there could be no levy of sales tax on the sales tax collected, the view of the Appellate Tribunal and the High Court was in conformity with the decision reported in Deputy Commissioner of Commercial Taxes v. Krishnaswami (1954) 2 M.L.J. 151, to which one of us was a party. 'It was there held that, under the scheme of the Madras General Sales Tax Act, an amount collected by a registered dealer from consumers by way of sales tax and paid over to the Government should not be included in the turnover of the registered dealer as part of the sale price of the goods sold and that the amount was not liable to be taxed over again.
3. Subsequent to the order of the High Court in the revision petitions, the Madras Legislature passed the Madras General Sales Tax (Definition of Turnover and Validation of Assessments) Act, 1954 (Madras Act No. XVII of 1954). The Act received the assent of the President on 6th July, 1954 and contains three sections of which Sections 2 and 3(1) are alone material. They run as follows :-
2. In the case of sales made by a dealer before the 1st April, 1954, amounts collected by him by way of tax under the Madras General Sales Tax Act, 1939 (Madras Act IX of 1939) (hereinafter referred to as the principal Act), shall be deemed to have formed part of his turnover.
3. (1) All assessments and collections made, all orders passed and all action taken by any officer in the exercise or purported exercise of jurisdiction or powers conferred by the principal Act and all Judgments, decrees, or orders pronounced by any Tribunal or Court in the exercise of its jurisdiction or powers with respect to matters in the principal Act, on the basis that amounts collected by a dealer by way of tax under the principal Act before the 1st April, 1954, formed part of the turnover of the dealer are hereby declared to have been validly made, passed, taken or pronounced, as the case may be; and any finding recorded by any officer, Tribunal or Court to a contrary effect and any order, Judgment or decree in so far as such order, Judgment or decree embodies or is based on any such finding and does not relate merely to the costs of the proceeding which resulted in the Judgment, decree or order, shall be void and of no effect.
(Proviso omitted as immaterial)
4. On the basis of the provisions contained in Act XVII of 1954, the Deputy Commercial Tax Officer issued notices on 5 th August, 1956, in Form B (12 of the Turnover and Assessments) calling upon the petitioners to remit the amounts of Rs. 4,957-2-6 and Rs. 13,369-3-3 which had been paid over to them by virtue of the refund vouchers referred to already. It is the validity of these notices that is impugned in these petitions.
5. It cannot be disputed that, as a result of the provisions of Act XVII of 1954, the amounts collected by an assessee before the 1st of April, 1954, from his customers by way of sales tax would be deemed to form part of his turnover and be liable to sales tax, notwithstanding the decision in Deputy Commissioner of Commercial Taxes v. Krishnaswami (1954) 2 M.L.J. 151. Even if a matter has been the subject-matter of a decision by an officer, Tribunal or Court holding that such amounts were not taxable as a part of the turnover, Section 3(1) makes all such decisions, findings, etc., to the contrary effect void and of no legal effect. The result is that, notwithstanding the order of the Sales Tax Appellate Tribunal and that of this Court in revision cases therefrom, the original assessment by the Deputy Commercial Tax Officer, wherein the petitioners were held liable to pay the sales tax on the sales tax collected by them from the customers, would stand. Act XVII of 1954 contains not merely a positive statement that the sales tax collected would properly form the turnover of a dealer, but also nullifies the effect of an order by a Court or Tribunal to the contrary. It follows that the petitioners would be liable to be assessed to sales tax on the amount of sales tax collected by them from their customers during the period covered by the years 1948-49 and 1949-50.
6. But the more important question in the present case is whether the amount, which had been refunded to the petitioners by the first respondent in pursuance of the order of the Sales Tax Appellate Tribunal, could be collected by the Government under the machinery provided by the Madras General Sales Tax Act. A similar question arose in a slightly different form in W.P. Nos. 503 etc. of 1957 Since reported as Muthu Muna Muthukaruppan Chettiar v. Deputy Commercial Tax Officer, Tiruchi Town [1960] 11 S.T.C. 220. In that case, an amendment of Section 3(1)(b) effected by Act XV of 1949 enabled enhanced collection of sales tax at the rate of 4 1/2 pies in a rupee in a case where articles of food and drink were sold in hotels, while the standard rate of tax was only three pies per rupee on the total turnover in all other cases (liability to tax arising only when the total turnover was above Rs. 25,000). The constitutional validity of that provision was negatived by this Court on the ground that it amounted to unreasonable discrimination and contrary to Article 14 of the Constitution. The Legislature, thereupon, passed Act XV of 1956, which rendered the provision relating to enhanced rate of levy applicable to all cases without discrimination. Section 17 of the Act (the latter enactment) stated that all taxes levied or collected under the original provision would be deemed to have been collected under the new provision, notwithstanding anything contained in any Judgment, decree or order of any court. In that case, before the Amending Act was passed, the assessee was repaid the excess collected from him over the standard rate of three pies in a rupee. After the passing of Act XV of 1956, the Deputy Commercial Tax Officer issued a notice of demand to recover the tax refunded. Rajagopala Ayyangar, J., held that the effect of Section 17 of Act XV of 1956 was only to validate the levy and collection of the tax that was already made, but that did not enable re-collection of what had been refunded under a valid order of court, particularly when such refund would not be held to be under any mistake of law. The learned Judge held that, if the tax had remained uncollected, the provisions of Section 17 would enable a levy or collection at the enhanced rate, but those provisions would not enable the Government to get back what was collected at the higher rate and refunded under a valid order of a court. It might be noticed that Section 17 of the Act did not nullify orders passed by courts. The principle of that decision cannot, however, apply to the present case, where the effect of Section 3 of Act XVII of 1954 is to make all orders, whether by Court or Tribunal, invalid, with the result that what now stands as the order of assessment is the original order of the Deputy Commercial Tax Officer, assessing turnover by including the amount of sales tax collected by the petitioners from their customers. Section 3 would also make the order of refund void and of no legal effect.
7. But the mere fact that the orders of the Sales Tax Appellate Tribunal and the High Court in revision and the orders of refund pending the revision cases were rendered invalid and of no legal effect, could not nullify or reverse the factum of refund. By reason of the subsequent enactment the petitioners became disentitled to the amount of refund. Possibly they are not entitled to retain the same. How is that amount to be got back by the Government? Can that be done under the power under Rule 12? In other words, the question in the present case is not so much whether the refund is valid or invalid, but whether the machinery provided by the Act enables the Government to get back the money refunded to the petitioners. The impugned notices, calling upon the assessees to pay back the amount, purport to be issued under the provisions of Rule 12 of the Turnover and Assessment rules. That rule states :-
After making the final assessment under Sub-rule(2) or (3) of Rule11, the assessing authority shall examine whether any and if so, what amount is due from the dealer towards it after deducting any tax already paid on the provisional assessment, with reference to Rule 7, Rule 8 or Sub-rule (4) of Rule 11. If any amount is found to be due from the dealer towards the final assessment, the assessing authority shall serve upon the dealer a notice in Form B and the dealer shall pay the sum demanded at the time and in the manner specified in the notice. If the tax due on the final assessment is lower than the tax already paid on the provisional assessment, he shall serve upon the dealer a notice in Form C for refunding the excess tax. If the final assessment is exactly equal to the tax already paid on the provisional assessment, the assessing authority shall inform the dealer what the final assessment is and that no further amount is due from him towards it.
8. Rule 12, on its terms, will only apply to the case of an original assessment. If the tax due under the final assessment is found to be lower than the tax paid on the provisional assessment, the officer is directed to issue a notice in Form C for refunding the excess tax. If the former is less than the latter, a notice in Form B is to be issued, making a demand on the assessee for the amount of the deficit. No question will arise, if the amount paid by way of provisional assessment is equal to that assessed as tax. What the rule contemplates is a mere arithmetical computation after the order of assessment is made. There is no power to alter or correct the amount or to issue notices in Form B or C more than once. To illustrate the position. We can refer to a simple case, where the assessing authority has made a mistake in the calculation of the tax. Suppose the assessing authority on the basis of such a mistake finds that the assessee had paid by way of provisional assessment more than what he was assessed to and thereupon gives a refund certificate in Form C which is duly cashed. Under the provisions of the Madras General Sales Tax Act, there is no power in that authority to rectify the mistake; the mistake can be rectified only in revision. Thus in regard to an original assessment there would be no occasion for the assessing authority to issue a notice in Form B or C more than once. When an assessment is varied in appeal or revision, Rule 12 does not enable an issue of Form B or C notice to collect the deficiency in or refund the excess payment of tax. The rule-making authorities have, therefore, provided separate rules for the purpose. Rules 14-A and 15(2) of the Madras General Sales Tax s provide for the case of modification of assessment by the appellate and revisional authorities. They state :-
14-A. Where the tax as determined by the initial assessing authority appears to the appellate authority under Section 11 or revising authority under Section 12 to be less than the correct amount of the tax payable by the dealer, the appellate or revising authority shall, before passing orders, determine the correct amount of tax payable by the dealer issuing a notice to the dealer and after making such enquiry as such appellate or revising authority considers necessary.
15. (2) The order passed on appeal or revision shall be given effect to by the licensing or assessing authority who shall refund within two months from the date of the communication of the order any excess tax or fee found to have been collected and shall also have power to collect any additional tax or fee which is found to be due in the same manner as a tax or fee assessed by himself.
9. There would be no necessity for these provisions in the rules if under Rule 12 itself the assessing authority had a power to issue demands or make refunds on an alteration in the assessment being made by an appellate or revisional authority. Rule 12 can, therefore, apply only for those cases expressly provided for by it, that is, a case of the initial assessment. If once a demand or refund certificate has been issued, it ceases to have effect except in cases covered by Rules 14-A and 15(2) of the General Sales Tax Rules. A fortiori Rule 12 cannot apply to a case where as a result of the statute like Act XVII of 1954 there has been a variation in the assessment: neither Rule 14-A, 15(2) or any other rule would apply to such a case. Therefore, Rule 12 cannot be used to get back an amount refunded to the assessee by the issue of Form B notice. Under the terms of that rule a demand notice can be issued only when the provisional tax paid is less than the tax assessed. In the absence of specific statutory provision, it is not possible to import in the construction of that rule that what was paid by way of provisional tax was what was actually paid minus the amount refunded, so that the deficiency of the resulting amount with the actual tax now validated by Act XVII of 1954 could be said to be a deficiency coming within the meaning of Rule 12. There is thus no machinery provided either in the Act or rules to enable the Government to collect under Rule 12 the amount paid by way of refund. While Act XVII of 1954 validates all assessments to tax on the amounts of sales tax collected by a dealer and nullifies any order having contrary effect, it has failed to provide for a machinery to give effect to its provisions, to enable the authorities to recover any amount paid by way of refund by reason of any Judgment or order which the statute has declared as void. It is unnecessary for us to express any opinion in this case whether the Government might have other methods of recovering that tax from the petitioners. The demand notices in Form B served on the petitioners under Rule 12 of the Turnover and Assessment rules are invalid and the amount of tax refunded could not be collected by them in pursuance of such notices. An appropriate writ will be issued to that effect. There will be no order as to costs.