Report No. 61

6.13. Precedent adopted in the Income-Tax Act and State Acts considered.-

As to the enact content of the provision, some thinking is required. The usual provision in the State Sales Tax Act does not go to the fullest length. Then, there is the precedent adopted in the Income-tax Act,1 but it is not completely appropriate. The theoretical basis for the proposed provision would, of course, be unjust enrichment,2 but the practical problem is, how money belonging to a member of the public should be made to reach him back. We think that it would be useful to provide that if a dealer or other person holding such money cannot prove that he has paid it to the rightful owner, he should be required to pay it into the State Treasury, and failure to do so should render him liable to prosecution and punishment.

1. Section 276B, Income-Tax Act, 1961.

2. Cf. section 72, Contract Act, and para. 6.5, supra.