TMI Blog1983 (12) TMI 317X X X X Extracts X X X X X X X X Extracts X X X X ..... .C. had no control after sales. I.T.C. followed the self removal procedure provided in Chapter VII-A of the Central Excise Rules. The wholesale buyers in turn sold the cigarettes to secondary wholesalers of their choice, who in turn effected sales to retailers, who sold the cigarettes to consumers. I.T.C. did not derive any extra benefit from the wholesale buyers and dealers and all the sales made by I.T.C. did not have any consideration other than the price of the products. These assertions in the petition have been admitted by the Department in its affidavit in reply dated 29th March, 1976. (b) Between 1st September, 1970 and 6th October, 1972, I.T.C. declared the assessable value under Section 4 of the Central Excises and Salt Act, 1944 in the price lists according to the prices charged by the wholesalers to the secondary wholesalers. I.T.C. accordingly paid excise duty to the Department. (c) On 1st December, 1972 the Supreme Court delivered its judgment in A.K. Roy v. Voltas Ltd. - 1973 Supreme Court 225 = 1977 (1) E.L.T. (J 177) (referred to hereafter as the Voltas case ) holding that the correct basis of assessment of excise duty on manufactured goods under Section 4(a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th March, 1972/6th October, 1972) and ₹ 1,83,685.67 (for the period 15th February, 1972/16th March, 1972). These amounts have been refunded by the Department to I.T.C. (h) However in respect of the amounts aggregating to ₹ 23,26,028.46 set out in sub-para (F) above I.T.Cs requests for refund made to the Department from 11th December, 1974 found no response. On 15th September, 1975 the Assistant Collector addressed a letter to I.T.C. that the Department desired to have the Appellate Collectors orders reviewed by Government of India. (i) By their attorneys letter dated 26th September, 1975, I.T.C. gave the requisite notice to the Department and on 30th September, 1975 filed a writ petition in this court for setting aside the Appellate Collectors orders dated 25th November, 1974 and for refund of the excess duty aggregating to ₹ 23,26,028.46. That writ petition was dismissed by the learned Single Judge by his judgment and order dated 6th April, 1977 on the preliminary contention urged by the respondents that I.T.C s proper remedy was by way of a suit, so that it could be established by evidence at what point of time I.T.C. came to know their mistake in making e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 81 (8) E.L.T. 468, observing that recovery of every rupee must be an authorised recovery , it was held by a Division Bench of this court that where departmental action amounts to recovery of tax without authority of law, it cannot be said that remedy by way of a suit is as expeditious, efficacious and adequate as a writ. This was reiterated by another division Bench of this Court in Wipro Products Ltd. v. Union of India 1981 (8) E.L.T. 531. Regarding Rule 11, in I.T.C. Ltd. v. Union of India 1981 (8) E.L.T. 690, it was held by the Karnataka High Court that persons cannot be denied the remedy under Article 226 where revenue has been collected without authority of law. In Madras Aluminium Co. Ltd. v. The Union of India 1981 (8) E.L.T. 478 (Mad.) = (1980) Cencus 50, it was held by the Division Bench of the Madras High Court that claims for refund of duty cannot be rejected merely on the ground of the time-bar under Rule 11 and that such claims were liable to be refunded by the Department within 3 years from the date of the discovery of the mistake. In I.T.C. Ltd. v. Superintendent of Central Excise 1983 (12) E.L.T. 281, it was held by a Division Bench of the Delhi High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w, (d) remedy by way of a writ is available if the writ is filed within 3 years from the discovery of the mistake, and (e) time is to be computed not from 14th August, 1970 when the Bombay High Court delivered its judgment in Voltas case, but when the Supreme Court did so on 1st December, 1972. In the light of this plethora of authorities (of which these are but a few), with which I am in respectful agreement, Mr. Sethna s contentions to the contrary must become insignificant. 8. In the present case, all the ratios of these authoritative decisions have been met by I.T.C. in ample measure, inasmuch as I.T.C. made the refund applications dated 23rd February, 1973 and 26th February, 1973 within one year from 1st December, 1972 when Voltas case was decided by the Supreme Court. Furthermore, I.T.C. thereafter pursued the departmental remedies prescribed under the Act and filed the writ petition on 30th September, 1975 within 3 years from the impugned orders dated 25th November, 1974 passed by the Appellate Collector. To go a step further, even assuming time started to run from the date of the Bombay High Court judgment on 14th August, 1970 as urged by Mr. Sethna (albeit cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at in that case the payments made by the millers were against certain permits of which they took advantage and had made payments not under any mistake but with full knowledge of the facts. 11. This takes care of the first 3 submissions of Mr. Sethna, 12. Coming to Mr. Sethna s fourth submission, it is not open to him to urge non-maintainability on the ground that (I quote him) I.T.C. chose to avail itself of departmental remedy . Mr. Sethna elaborated that I.T.C. should have contemporaneously filed a writ petition with the refund applications and should have kept the writ petition pending instead of waiting to file it until after the departmental proceedings were over. He also urged that I.T.C. selected a wrong remedy in approaching the Department for refund. These contentions are bizarre. They presuppose that a citizen must necessarily expect no justice from Government and must necessarily take for granted that Government will decide against him. I decline to subscribe to such cynicism, advanced in apparent seriousness, albeit by Counsel appearing on behalf of Government itself. What learned Counsel also seems to have momentarily lost sight of it that the Act itself require ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the forefront of the Appellate Collectors orders dated 25th November, 1974, I.T.C. requested for refund of ₹ 23,26,028.46 and sent reminders to the Department. On 12th March, 1975 the Assistant Collector wrote to I.T.C. that their claim was referred to the Collector and ultimately after I.T.C. s reminders dated 23rd March, 1975 and 4th August, 1975 and the Superintendent s letter dated 24th August, 1975 asking I.T.C. for further information, the Department expressed its desire to so by way of review to Government of India. In law, it was not open to I.T.C. to straightway file a writ application for refund before exhausting the departmental remedies prescribed by the Act. Yet Mr. Sethna says in all apparent seriousness that because I.T.C. invoked departmental remedy, they could not have filed the writ petitions. So be it. 14. Mr. Sethna relied on the decision of the learned Single Judge of the Calcutta High Court in Inchek Tyre Ltd. v. Assistant Collector of Customs - 1979 (4) E.L.T. 236, where it was held that if an amount is unlawfully collected the petitioners right to refund is governed by the statute itself which provides its conditions which the petitioner is boun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15. This finally brings me to the grievance of unjust enrichment made by Mr. Sethna as a ground for refusing restitution. Mr. Sethna urged that I.T.C. had recovered from their distributors the excess duty paid by I.T.C. to the Department hence it would be inequitable to grant to I.T.C. the relief of restitution. Reliance was placed by Mr. Sethna on a statement headed List showing how the Central Excise Duty was charged from the petitioners (viz. I.T.C,) annexed as Ex. 1 to an affidavit-in-reply dated 22nd November, 1976 filed by the Assistant Collector. As an illustration, I reproduce hereunder the first item of Ex. 1 :- List showing how the Central Excise duty was charged from the petitioners. Brand of Cigarettes packing Maximum list price for Mille Less Discount (1) (2) (3) India 20HL Kings FT 215.00 1.00 * * Approved prices effective from 29-5-71 Maximum wholesale nett ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of excise. In para 3 of the petition it is stated in unambiguous terms that I.T.C. do not make retail sales or sales in small quantities or operate or maintain any retail shop and that I.T.C. make sales in large bulk only to wholesale buyers at arms length on principal to principal basis, that I.T.C. do not derive any extra benefit from their wholesale buyers and that the transactions between the letter and I.T.C. are bona fide at arms length and do not have any consideration other than the price of the products, and that during the relevant period I.T.C. followed the self removal procedure laid down by Chapter VII-A of the Rules. In para 4 of the Department s affidavit-in-reply dated 29th March, 1976, these averments are admitted to be substantially correct. Para 4 of the petition goes on to say that during the relevant period I.T.C. mistakenly and bona fide believed that for the purpose of Section 4(a) of the Act, the prices changed by the wholesale dealers to the secondary wholesalers formed the correct basis of assessment whereas according to the true legal position discovered later by reason of the Supreme Court decision in Voltas case, the correct basis of assessment unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... however the duty paid by I.T.C. would also be on extra four rupees, viz. ₹ 3/- and this would be borne by I.T.C. It is also not without its own significance that not a single of I.T.Cs. wholesalers (or for that matter anyone else) has come forward claiming as his the excess duty paid to the Department by I.T.C. 17. In the light of this analysis and the undisputed facts, it is difficult to see how I.T.C. can be accused of unjust enrichment, or how in the teeth of this position, the charge of unjust enrichment can be brought home to them as suggested by Mr. Sethna merely from I.T.C. s failure in filing an affidavit in rejoinder. 18. This brings me to the final aspect of this judgment. Assuming there was unjust enrichment by I.T.C. even so the Department cannot resist restitution. In D. Cawasji Co. v. State of Mysore - AIR 1975 Supreme Court 813 = 1978 (2) E.L.T. (J 154), after discussing the question of limitation which is not germane on the point in hand, it was observed by the Supreme Court at page 815 of the Report as under : ...Nor is there any provision under which the Court could deny refund of tax even if the person who paid it collected it from his customer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... den of the tax may have been passed over to the consumer. This ratio in Cawasji s case, followed by the Division Bench in Maharashtra Vegetables and reiterated by the Division Bench in Wipro and in Chemical and Fibres, was again in no uncertain manner reiterated by the Division Bench of this High Court in the unreported judgment delivered on 27th April, 1983 in Special Civil Application (Writ Petition) No. 254/B/82 - Leukoplast (India) Ltd. v. Union of India and another - 1983 (14) E.L.T. 2106 (Bom.). 19. The rationale of these decisions with which I am in respectful agreement is simple. If a manufacturer, legally called upon by the Department to pay additional duty, say by reason of a later judicial pronouncement, cannot refuse to do so by pleading unjust impoverishment on the ground that he has not or will not be able to recover it from his distributors/ customers, it would hardly be proper to deny him restitution on the ground of unjust enrichment. In any event, in such a case it would always be open to the party from whom the excess duty was recovered by the manufacturer, in his turn to recover it from the manufacturer. 20. Mr. Sethna relied on the decision of a Divis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the cover of law. Admirable as these sentiments no doubt are, I must decline to succumb to Mr. Sethna s crusading zeal. With the greatest respect to the Gujarat High Court, pray where arises the question of moulding relief in the light of the clear and unequivocal ratio of the Supreme Court in Cawasji s case, that tax illegally collected must be refunded even if the person who paid it collected it from his customers, and has no subsisting liability or intention to refund it to them or for any reason it is impracticable to do so. If in Cawasji s case, restitution was not made, it was for other reasons and not on the ground of unjust enrichment as, with respect, correctly observed by the Division Bench of this Court in Maharashtra Vegetables (Supra). The implied suggestion that in the present case also, Government should be directed to open a bank account and start a trust for the benefit of the cigarette consumers, ignores the utter impracticability of an exercise negated by the Supreme Court in Cawasji s case itself. 22. With deep respect to the Delhi, Allahabad and Gujarat High Courts, I follow the decisions of the Division Beaches of the Bombay High Court in Maharashtra Veg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es had accepted the said list. On 14th August, 1970 a Division Bench of this Court in Voltas Ltd. v. R.K. Roy reported in 73 Bom. L.R. 229, held that the correct basis of assessment of excise duty on the manufactured goods was the price charged by the manufacturers to their immediate wholesalers i.e. the first wholesalers in the present case. This decision was confirmed by the Supreme Court by judgment delivered on 1st December, 1972 and reported in AIR 1973 S.C. 225 = 1977 (1) E.L.T. (J 177) (S.C.) (A.K. Roy and another v. Voltas Ltd.). 27. It is only after the decision of the Supreme Court that the petitioners made four applications for refund of the excess excise duty paid on their previous sales on the prices charged by their first wholesalers to the second wholesalers. These applications were as follows :- (1) Application dated 5th February, 1973 for ₹ 10,16,417.83 for excess duty paid on goods removed during the period from 19th March, 1972 to 6th October, 1972. (2) Application dated 14th February, 1973 for ₹ 1,83,685.67 for excess duty paid on goods removed during the period from 15th February, 1972 to 16th March, 1972. (3) Application dated 23rd Febr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of respondents Nos. 1 and 2 viz. the Assistant Collector and Collector of Central Excise to comply with the directions given by respondent No. 3 Appellate Collector and refusing to grant refund amounted to derelication of statutory duty and was therefore illegal and violative of Article 265 of the Constitution; (2) in the alternative the directions contained in the 3rd respondent Appellate Collector s order for grant of consequential relief were without jurisdiction and were ultra vires, illegal etc. on the grounds: (a) that if Rule 11 of the Excise Rules was applicable then the petitioners had discovered the mistake some time in January, 1973 after the Supreme Court s decision in the Voltas case and Section 17(2) of the Limitation Act, 1953 was applicable to the present case inasmuch as the Central Excise Act and the Rules made thereunder were a special law within the meaning of Section 29(2) of the Limitation Act. Hence the two applications dated 23rd and 26th February, 1973 having been filed within one year after coming to know of the mistake in January, 1973, they were in time and the petitioners were entitled to the refund of the amounts claimed in the said applications ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nywhere that they had refunded the excise duty to the consumers who had ultimately paid the same. Hence the petitioners were not entitled to invoke this Court s writ jurisdiction. On all these grounds the respondents contended that the petition should be dismissed. 31. The learned Single Judge considered only the question of limitation and after discussing in detail the case law on the subject held that the facts on record legitimately give rise to a prima facie triable issue as regards the availability of the relief of refund of excess excise duty to the petitioners on the ground of limitation. Under the circumstances, on the ratio of the aforequoted-observations in the decision of the Supreme Court in Bhailal Bhai s case it would be proper to leave the petitioners to seek their remedy for the refund of excise duty on the cause of action under Section 72 of the Contract Act, by the ordinary mode of action in Civil Court rather than exercising the Court s discretion under Article 226 of the Constitution and dismissed the petition. The learned Judge did not deal with, as stated by him, the main contention of the petitioners viz. that the recovery of excess duty was without juri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as borne by the petitioners in such proportion as was required and necessary from a commercial and practical point of view. The petitioners say that it was not their practice that in each year the excise duty levied and paid to the State was wholly collected from the purchasers. (Emphasis supplied) These averments in the petition therefore clearly go to show firstly, that on their own admission the petitioners have collected from the purchasers the excess excise duty. However it is their case that they have not collected it wholly . Secondly, the petitioners have also admitted that depending upon the prevailing competitive market conditions each year, the petitioners had borne the excess excise duty in such proportion as was required and necessary from a commercial and practical point of view. This again means that they had not borne the excess excise duty every year but had passed it on to others in some years. The petitioners have not chosen to state specifically as to what part of the excess excise duty was borne by them, and in which year, and whether the amounts sought to be recovered in this petition had any relation to those years. Since they were invoking the extraord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e duty in respect of all the sales for which they are making claims for refund in this petition. There is no allegation in the petition that they have refunded the excise duty to the consumer. I submit that the excise duty has been fully recovered from the consumers and do not in fact or in law belong to the petitioners and justice of the case requires that the petitioners would not be entitled to be paid the amount, much less in law which does not belong to them. Exhibit No. 1 to the said affidavit shows how the Central Excise duty was charged to the petitioners for their different products on the basis of the approved prices effective from 29th May, 1971 which were admittedly the prices prevailing during the period in respect of which the petitioners claim the present relief. In spite of these categorical assertions by respondent No. 5 that the petitioners had recovered from the distributors the entire excise duty in respect of all the sales for which they were making claim in the petition and further that the excess excise duty had been fully recovered from the consumers and the amount claimed did not in fact or in law belong to the petitioners, the petitioners did not choos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er). Which had taken a contrary view. He however made it clear that it is on account of the said decisions that he was not convassing the said contention before us. I however find that this concession made by Shri Sethna is based on his interpretation of the said decisions. The learned Counsel s interpretation of the said decisions and the concession made by him on that basis are certainly not binding on me for reasons which I will point out presently. In the first instance, the said decisions do not lay down any proposition of law on the point. Indeed no Court can lay down a proposition which will have the effect of fettering the judicial discretion of another Court. Each Court has to exercise its own discretion on the facts of the case before it. Secondly, even on the exercise of discretion in such cases, we have weighty precedents in support of the view I am taking. There appears to be a lot of confusion on this point which is further confounded by Counsel relying upon different decisions and on different passages from the same decisions to suit their requirements. It has therefore become necessary to discuss in detail the relevant decisions on the point to ascertain the law on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hand s case reported in AIR 1970 S.C. 898, and had held that the petitioners should resort to the ordinary remedy of suit. While commenting on the decision of the Mysore High Court, the Supreme Court held that in Tilokchand Motichand s case (Supra), the majority had not considered the payments made, by the petitioners as payments made under a mistake of law and therefore that decision had no relevance for decision in the case before them. While discussing the law on the point, the Supreme Court referred to its decisions in State of Madhya Pradesh v. Bhailal Bhai s case reported in AIR 1964 S.C. 1006 and in State of Kerala v. Aluminium Industries Ltd., reported in (1965) 16 STC 689 (S.C.) which had followed the decision in Bhailal Bhai s case. The Court also then considered the provisions of Section 17(1)(c) of the Limitation Act, 1963 in this context and observed in paragraphs 8 to 12 as follows :- 8. Therefore, where a suit will lie to recover moneys paid under a mistake of law, a writ petition for refund of tax within the period of limitation prescribed i.e. within 3 years of the knowledge of the mistake, would also lie. For filing a writ petition to recover the money paid un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich they could be recovered and the period of limitation for the recovery. 12. The task of writing legislation to protect the interest of the nation is committed to Parliament and the legislatures of the States. We are referring to this aspect only to alert their attention to the present state of law . It is relying on the aforesaid observations and particularly the observations contained in paragraph 10 beginning from nor is there any provision ............impracticable to do so , that it is very often contended that the Court cannot reject the claim of the petitioners on the ground that the petitioners had collected tax, duty or levy from their purchasers or customers. In the first instance, it must be remembered that the Supreme Court has made the said observations in the context of the question of limitation which was convassed before it. Secondly, the Court in the case had confirmed the decision of the High Court on the ground that the appellants had not claimed the refund of the amount paid during the years in question, in the earlier writ petitions. The Supreme Court in terms held that in the circumstances of the case, the Court would not be justified in interfering w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed by a suit, it would not follow that they could challenge its validity in writ petitions without encountering legitimate pleas available to the respondent i.e. the state. The earlier observations could not be taken as a sanction to the petitioners to approach the High Court for relief under Article 226 of the Constitution without regard to the question of delay in filing the petitions. I have discussed the said decision in M/s. D. Cawasji and Co. s case in details to point out that what fell for consideration before the Supreme Court there was the question of limitation only. The question whether the High Court can refuse to exercise its extraordinary writ jurisdiction under Article 226 of the Constitution on the ground of unjust enrichment was never raised before the Court in that case and the Court had not answered the same. The observations made in paragraphs 8 to 12, though appear to be general in terms, when read out of context, have therefore to be understood in a proper perspective, it is well settled that the observations in a judgment of a Court have to be read in the context of the questions which fell for consideration before the Court and are not to be read as a s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case for our purpose is two-fold. Firstly, the Supreme Court in this case whole-heartedly supported the principle that it is the persons from whom ultimately the excess price is recovered who entitled to the same and who should be paid the same. Secondly, this principle was applied by the Supreme Court in another case viz. Messrs Shiv Shanker Dal Mills v. State of Haryana and Others reported in AIR 1980 S.C. 1037 where the facts were identical to those in our case. In that case the petitioners who were dealers of various kinds had paid market fees at the increased rate of 3 per cent (raised from the original 2 per cent) under the Haryana Act 22 of 1977. It appears that earlier, some dealers had challenged the said levy as unconstitutional, and the Supreme Court relying on a decision in Kewal Krishna Puri and Another v. State of Punjab and others decided on 4th May, 1979 and reported in the same Volume at page 1008, had ruled that the excess of 1 per cent over the original rate of 2 per cent was ultra vires. While deciding the case of Kewal Krishna Puri (supra), the Court had not ordered the Market Commodities to refund the illegal excess probably because they could not straightway ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thereof under Section 4 of the Central Excises and Salt Act, 1944, and whether the petitioners who were the manufacturers of the goods could claim a refund of the amount of excess duty charged on the cost of packaging of the goods. The learned Judges by two separate but concurring judgments while holding that on the law as obtained at the relevant time, the cost of packaging could not be taken into consideration for determining the value of the goods for levying excess duty, dealt with the question as to whether the petitioners who had already collected from their customers the said excess excise duty were entitled to recover the same from the Government. Both the learned Judges referred to the decision of the Supreme Court in the case of Cawasji Co. v. State of Mysore, AIR 1975 S.C. 813 (supra) as well as Bhailal Bhai s case reported in AIR 1964 S.C. 1006 (supra) and the two earlier decisions of this Court reported in 1961 B.L.R. 318 (State of Bombay v. Morarji) and AIR 1968 Bom. 198 (Paygonda v. Jingonda) and held that the petitioners would not be entitled to the refund of the moneys recovered from them during the period from 1962 to 18th December, 1972 on the ground that justi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of India and Another) (supra) has followed the earlier decision in Mahsrashtra Vegetable Products Pvt. Ltd. s case. One more unreported decision of yet another Division Bench of this Court in Special Civil Application (Writ Petition) No. 254/B/82 of the Panaji Bench [Leukoplast (India) Ltd. v. Union of India and another - 1983 (14) E.L.T. 2106) decided on 27th April, 1983 which was pointed out to us has merely followed the decision in Maharashtra Vegetable Products Pvt. Ltd., and Wipro Products Ltd. s cases (supra). These three decisions have not the effect as indeed they cannot have, of setting aside the view taken in the earlier case of Messrs Ogale Glass Works Ltd. (supra) viz. that the Court can decline to exercise its equitable jurisdiction in favour of a petitioner on the ground of unjust enrichment. Further as pointed out earlier, the Supreme Court has in terms laid down in Messrs Shiv Shanker Dal Mill s case (supra) that the fact that the money has not come from the pocket of the petitioners but has been recovered by them from others, is a valid consideration to decline to exercise writ jurisdiction in favour of the petitioners. This therefore is the state of law on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Gujarat High Court in the Union of India v. New India Industries Ltd., Baroda, reported in 1983 E.L.T. 1763 has held that the duty collected illegally must be refunded to the consumer and not to the manufacturer or the State and directed that the State should open a Bank account and trust for the benefit of the consumers. What is necessary to remember is that the High Court was deciding an appeal from a decree in a suit. The plaintiff which was a Public Limited Company had filed a suit for claiming refund of the excess excise duty collected on the basis of the decision of the Supreme Court in the Voltas case. The trial Court had decreed the suit. It was while deciding the appeal filed by the Union of India against the said decree that the Court had held as aforesaid and given the relevant direction. I am therefore more than satisfied that the Court can refuse to exercise its extraordinary equitable and discretionary jurisdiction under Article 226 of the Constitution on the ground that the exercise of jurisdiction in favour of the petitioner would result in the petitioner laying his hands on money which does not belong to him and the decisions of this Court in Maharashtra Veg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... la. It lies in the powers of the Court to interpret the law suitably and also to evolve, if necessary, principles, maxims and doctrines to prevent the abuse of law, to avert absurdities and to eliminate distortions. To achieve this it will be necessary to avoid a mechanical approach and adopt a purposeful and creative attitude. This had been done by the Courts to meet other situations. There is no reason why it should not be done to meet situations like the present one. This view of mine on Section 72 of the Indian Contract Act may appear to be inconsistent with the observations of the Supreme Court in M/s. D. Cawasji Co. s case (supra) and of this Court in Maharashtra Vegetable Products Pvt. Ltd. s case (supra). In the first case the Supreme Court has observed that there is nothing in law to prevent the parties who have already recovered the amount from their purchasers, from recovering it from the authorities. In the later case this Court has observed that if a suit were to be filed, the petitioners in that case would have succeeded. It is possible from these observations to hold that the Courts have taken a view of Section 72 which is in conflict with the view I am taking h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , as the case may be. There is no dispute that by reason of Rule 173-J of the said Rules, the period of three months provided in Rule 11 stands extended to one year. in other words, the petitioners could claim refund under Rule 11, only if they had preferred their applications within one year from the date of payment. Hence the applications for refund of the excise duty for the period from 1st September, 1970 to 28th May, 1971 ought to have been made prior to 28th May, 1972 and the applications for refund of the excess excise duty for the period from 29th May, i971 to 14th February, 1972 ought to have been made prior to !4th February, 1973. The present applications were admittedly made on 23rd and 26th February, 1973 which were therefore both beyond the period of one year. Although an argument was advanced before the learned Single Judge that even to the applications under Rule 11, the provisions of the Limitation Act were applicable such argument was not advanced before us and therefore it is not necessary to consider the same. However, if a decision was necessary on the point, I would record a finding that since Section 29(2) of the Limitation Act cannot apply to applications ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spective and independently of Rule 11. In the first instance, it must be remembered that no such contention was raised before the excise authorities. It was not even the contention raised in the petition as was originally filed. That contention was taken for the first time by an amendment made on 18th November, 1976. I will however proceed on the assumption that on the date the petition was filed viz. on 30th September, 1971 such a contention was raised by the petitioners. Admittedly, even on 30th September, 1975 the claim for the amounts in question which were paid on goods removed during the period from 1st September, 1970 to 14th February, 1972 was barred by the law of limitation, even if the petitioners were to file a suit for such refund, since more than three years had elapsed by that time. However, in order to save the limitation, the petitioners firstly relied upon the provisions of Section 17(1)(c) of the Limitation Act, 1963 which provides that where the suit or application is for relief from the consequences of a mistake, the period of limitation shall not being to run until the plaintiff or applicant has discovered the mistake or could, with reasonable diligence, hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the said view Thus, if not in 1967, at least in August, 1970 when no less than three judgments on the same point taking the same view were delivered, it is difficult to accept that a large organisation like the petitioners with an independent legal department of its own, would be unaware of the mistake of law that they were committing in making the said payments. Fourthly, the gist of the judgment of this Court in the Voltas case was also reported in the 1971 issue of the Yearly Digest. Lastly, an affidavit filed by S. Krishnamurthy (who is admittedly a member of the petitioners Management) before the respondent No. 3 Appellate Collector on the 3rd October, 1974 clearly mentions that on 18th February, 1972, the deponent had come across a report of the decision of this court in Queens Chemists case in the Times of India of the same date. In that report, the earlier decision of this Court in the Voltas case was mentioned and it was indicated there that the price charged by the manufacturer must be taken to be the wholesale cash price. Thereafter, he contacted his Solicitor Mr. S.K. Banerjee at Calcutta and also handed over to him immediately a copy of the said press report during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n paragraphs 3 to 9 of his affidavit dated 3rd October, 1974 which is Exhibit F (Collectively) to the petition and at pages 109 to 112 of the paper book. 39. In view of this cogent material on record, it will have to be held that the petitioners were aware of their mistake in law at least on 22nd September, 1972 if not earlier. As has been pointed out earlier, on Mr. Krishnamurthy s admission itself, he became aware of the mistake at least on 18th February, 1972. Further the petitioners should be deemed to have been aware and could have been aware of their mistake, had they been diligent, on 14th August, 1970 when this Court had delivered its decision in the Voltas case. Even if however it is held that the petitioners became aware of their mistake on the 22nd September, 1972, the petition filed on 30th September, 1975 for refund of the claim was clearly time-barred. 40. Having realised their difficulty the petitioners raised three alternate contentions in this behalf. Their first contention was that the knowledge of the mistake of law should be attributed to them only from the date the Supreme Court gave its decision on the 1st December, 1972. For this proposition, Shri Des ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fit of the time exhausted in such proceedings for prosecuting the present claim. The applications were no more than mere representations or appeals to the good sense of the authorities. Hence this contention of the petitioners must also fail. Faced with this difficulty, the third and the last contention advanced on behalf of the petitioners was that no period of limitation applies to a writ petition filed for recovery of the amount from the Government or a public body when the amount is paid to it under a mistake of law. For this purpose reliance was placed on two decisions of the Supreme Court; one reported in 1979 E.L.T. (J 396) (Madras Port Trust v. Hymanshu International) and another reported in AIR 1980 S.C. 1037 (supra) and which has already been referred to in another context. In my opinion, the reliance placed on both these decisions for the proposition which they are trying to advance is singularly misplaced. In the first of the decisions, Bhagwati, J. has observed as follows :- It is high time that Governments and public authorities adopt the practice of not relying upon technical pleas for the purpose of defeating legitimate claims of citizens and do what is fair ..... X X X X Extracts X X X X X X X X Extracts X X X X
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