Court caseAIR 1959 SC 135

The respondent firm, dealers in bullion, paid sales tax to the State of Uttar Pradesh on its forward transactions in silver for several years. The Supreme Court later held, in another case, that the levy of sales tax on forward contracts was beyond the State's legislative competence. The firm then demanded a refund of the tax it had paid, and the Sales Tax Officer refused.

The Supreme Court held that s. 72 uses the word 'mistake' without qualification and covers mistakes of law as well as of fact. Section 21, which says a contract is not voidable for a mistake of Indian law, deals with the validity of contracts and does not cut down s. 72. The tax, having been paid under a mistake of law, was recoverable; it was immaterial that the payment was voluntary, so long as it was not made with knowledge that the money was not due. 'Coercion' in s. 72 is likewise used in its ordinary sense and is not confined to the definition in s. 15.