SALES TAX OFFICER, BANARAS & OTHERS vs KANHAIYA LAL MUKUNDLAL SARAF

The Supreme Court held that under Section 72 of the Indian Contract Act, 1872, a mistake of law is included within the term 'mistake', allowing for recovery of money paid under such a mistake. The Court ruled that the respondent was entitled to a refund of sales tax paid on forward transactions, which was later deemed ultra vires by the Allahabad High Court. The argument that the payments were voluntary and spent by the government was rejected, affirming the right to recover the amounts paid.