Dalmiya Cement Venture Limited vs The State of Karnataka and others. Writ Petition 104140/2013 decided on 22 August 2017.
Judgment Link: http://judgmenthck.kar.nic.in/judgmentsdsp/bitstream/123456789/183184/1/WP104140-13-22-08-2017.pdf
Relevant Paragraphs: 7. It is significant to note that the respondent No.4 admitted the excess stamp duty paid by the petitioner.
9 . The Hon’ble Apex Court in the case of Mafatlal Industries Ltd V/s Union of India, reported in (1997) 5 Supreme Court Cases 536, has held thus; “Any provision appearing or trying to bar recovery of illegally collected tax is violative of Article 265 of the Constitution and must be struck down. Once it is established that more than what is payable under the statute has been collected from the taxpayer, the taxpayer automatically gets a right to get back the whole amount. If the right is sought to be effectively taken away by imposing conditions, then the law imposing these conditions must be declared to be bad and ultra vires the Constitution. There is another aspect of this matter. The Exercise Officer cannot tax more than what is permitted by the statute. If the levy is in excess of the statute, then its retention by the State is unauthorised by law. What is being retained is not in enforcement of the charging section but something else. Such illegally collected tax the money has to be utilised by the State and is not within the disposing power of the State. If the money has to be utilised by the State, the State has to find out some legitimacy for having possession of the money. Protection under Article 265 afforded to the citizens from State oppression in financial matters. Article 265 must be implemented in letter and spirit as it stands and all the tax laws and all Government actions to realise and retain tax must be tested on the anvil of this guarantee. The courts should jealously guard against any attempt to whittle down or do away with any of the guarantees given under the Constitution to the citizens. If any law is passed for retention of illegal levy, it must be struck down. If the Court comes to the conclusion that a levy of tax is unlawful, the Court will direct the Government to return the tax. It is not for the Court to enquire how the taxpayer has managed his affairs after payment of the unlawful levy. The Court cannot, by torturing the language of Article 265 or by any other means, construe it so as to give it a meaning which it does not naturally bear.”
10. In the light of the said judgment, it can be held that no unjust enrichment can be appreciated, as recovery or accepting the duty in excess of what is authorised by law would be against the mandate of Article 265 of the Constitution of India. No amount received in excess than what is stipulated chargeable can be retained by the authorities. The same would be construed as the amount collected without authority of law which is wholly unsustainable. There is no question of petitioner being charged. It is an admitted fact that the petitioner paid excess stamp duty to an extent of 1%, the same cannot be retained by the authorities, despite the application made by the petitioner for the refund of the excess amount within the period stipulated under section 44 of the Act. The authorities are bound to refund the excess stamp duty collected in terms of section 44 (2) of the Act.
Compiled by S. Basavaraj, Advocate, Daksha Legal.
Daksha Legal 