Report No. 61
6.15. Recommendation to enact separate law regarding amount illegally collected as taxes.-
We, therefore, recommend that a legislative provision somewhat on the following lines, should be made by a separate law1:
"(1) Where any person other than a public officer2 has, purporting to act in pursuance of any law imposing a tax, realised from any other person as tax any amount not legally due from such person as such tax, he shall3, unless he proves that he has refunded the amount to that person or has otherwise accounted for the amount in accordance with such law-
(a) deposit the amount so collected without delay in the nearest Government Treasury, and
(b) shall by general or special notice intimate the particulars of the case to that person and to the authority to whom he would be liable to account if the amount had been legally due as tax.
(2) All amounts received under sub-section (1) shall be credited to the public account of India, or to the public account of the State4, as the case may be; but the Union of India or the State, as the case may be, shall be liable to refund the amount to the person from whom it was realised.
(3) The Central Government or the State Government, as the case may be, shall cause public notice to be given5 every six months of the receipt of such amounts, giving the prescribed particulars.
(4) Notwithstanding anything to the contrary in any law or contract, when any amount is deposited by a person in compliance with the provisions of this section, such deposit shall constitute a good and a complete discharge of the liability of that person in respect of such amount to the person from whom it was collected.
(5) The person from whom the amount deposited in pursuance of this section was collected, shall be entitled to apply to the authority to whom it was paid for refund of the amount to him, and the said authority shall allow the refund if it is satisfied that the claim is in order:
Provided that no such refund shall be allowed unless the application is made before the expiry of the period within which the applicant could have claimed the amount from the person who collected it by a civil suit, if his liability had not been discharged in accordance with the provision of sub-section (4):
Provided further that no claim for such refund shall be rejected without giving the applicant a reasonable opportunity of being heard.
(6) Nothing in sub-section (5) shall affect the right of the person entitled to refund of any amount thereunder to file a civil suit for the recovery of such amount against the Government; and the period of limitation for such suit shall be computed from the date of receipt or publication of the notice under sub-section (3)."
1. To be implemented by a separate law.
2. The expression 'public officer' to be defined.
3. Punishment for contravention can be imposed.
4. See Article 266 of the Constitution.
5. Expression "prescribed" to be defined.
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