TMI Blog1960 (6) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... the Central Excises and Salt Act. The plaintiff used to receive country tobacco from the growers into his warehouse. The procedure that is generally followed is that each consignment of tobacco is weighed in the presence of the Excise Officer immediately they are received, and the weights were noted in the Officer's presence in Part I of the register. As the said tobacco does not contain the required moisture and the mellowish colour, it is processed by sprinkling water for a period ranging from seven to fifteen days depending upon the quality of the tobacco. After processing the tobacco is bundled up in bundles of 200 lbs., each. It has to be observed that in the course of the Processing, tobacco absorbs a portion of water as such the weight of the tobacco increases. The net weight of the tobacco taken for processing is entered in the register maintained and the gross weight after processing is also noted. After the processing, the tobacco is allowed to dry and the weight recorded after the evaporation of the water and the actual dryage is noted. This is the process that is adopted and so far as this case is concerned the net weight of the tobacco actually received b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthorities to levy the duty and the suit was maintainable. The trial Court as well as the lower appellate court negatived the pleas raised by the Government and decreed the plaintiff's suit holding that the civil court had jurisdiction and the levy was not warranted under the Rules. The Government has now preferred this appeal. 2. The two arguments that have been advanced before me on behalf of the Government are that no suit would lie to challenge any act of an Officer under the Central Excises and Salt Act which has been done bona fide in the discharge of his duties and the second argument is that there is a discretion vested in the Officer to allow a certain percentage for dryage or evaporation and if in the exercise of that discretion he allowed certain percentage, the assesses could not as a matter of right claim that the allowance should be more. The section of the Act on which reliance is placed on behalf of the Government, is Section 40 which reads as follows : (1) No suit shall lie against the Central Government or against any officer of the Crown in respect of any order passed in good faith or any act in good faith done or ordered to be done under this Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lected in excess, by error. Holding so, the learned Judge observed that the jurisdiction of civil courts in such cases was not ousted. This case in my opinion, on the allegations in the plaint is clearly a case where the plaintiff seeks to claim a refund of the amount paid by him as duty on the ground that such levy was not warranted and that it was an illegal assessment. A Bench of this Court consisting of Subba Rao C. J. (as he was) and Jaganmohan Reddy, in Santhanna v. State of Madras, 1957 2 Andh R 260 : (AIR 1958 Andh Pra 670) considered he scope of Section 18 of the Madras General Sales Tax Act and after adverting to the case of AIR1952Mad273 , already referred to, observed that an assessee was entitled to seek his remedy in a court of law by challenging the legality of the order of the assessing authority, unless that right had been barred or had been taken away statutorily. They further held that the fact that under the taxing statute there was a right of appeal or revision provided against the assessment could not by itself deprive the party of seeking his remedy in a civil court. They also held that section 18 of the Madras General Sales Tax Act did not apply to suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the Act within the meaning of Section 40 and whether Section 40(2)of the Act applied. They held that the act of the officers in selling the confiscated property was ultra vires and therefore where the act was ultra vires it could not be regarded as something done or ordered to be done under the Act coming within Section 40, and therefore, Section 40(2) did not apply. They also held that the suit was governed by Article 62 of the Limitation Act. This decision would also make it abundantly clear that where the act of the department is in contravention of the Rules and so ultra vires of the Act, it would not be regarded as an act done or ordered to be done under the Act to attract the provisions of Section 40(2) of the Act. It is just as well that another decision of the Madras High Court dealing with Section 40 of the Central Excises and Salt Act is also noted in this connection. These learned Judges, Govinda Menon and Ramaswami JJ. laid down that a suit alleging that the Excise-tax levied illegally against the assessee was maintainable and Section 40(2) only contemplates the filing of suits within six months specified in that sub-section. They further go to hold that the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the conclusion that having regard to the terms of the Act and the Rules, the licensee could not demand as of right the percentage of wastage to be allowed and that if be was dissatisfied with the allowance allowed by the authority tie had a remedy by way of appeal or revision to the higher authorities. In the view that the learned Judge took and on the facts of that case, he dismissed the, writ petition. This case, in my opinion, cannot be called in aid of the contention on behalf of the appellant. It cannot be denied that Excise duties are leviable on the goods and the commodities mentioned in the Schedule in this case is tobacco; Rule 223-A which by reason of an amendment has taken the place of the former Rule 142, reads as follows:- If the quantity so ascertained is less than the quantity which ought to be found in such premises, (after taking into account receipts and deliveries, and making such allowance for waste by evaporation or other natural causes as the proper officer may consider reasonable and as may be in accordance with my instruction issued by the Central Board of Revenue) the owner of such goods shall unless the deficiency, is accounted for to the satisfa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Act or the Rules, it must be regarded as an illegal levy which the plaintiff is entitled to get a refund of. 4. In this case, on the evidence, the trial Court as well as the lower appellate Court have come to the conclusion that the officer concerned could not give any cogent reason or any satisfactory explanation as to why the allowance for dryage was fixed at 5 per cent. That there was no pilferage or surreptitious removal of any portion of the tobacco was established. D. W. 1 has stated, as would be clear from his evidence, that the loss represented the dryage. It stands to reason that the licensee would be liable to account only for the deficiency in the weight of the stock where it is found that the weight is less than the weight noted in the receipt account. I am, therefore, in agreement with the conclusion arrived at by the trial Court as well as the appellate Court, that the loss in weight is attributable only to the evaporation and dryage and such other natural causes. Under the circumstances, the plaintiff is not liable to pay duty on such loss. He would, therefore, be entitled to refund of the duty paid on such loss of weight due to evaporation and dryage. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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