TMI Blog1962 (2) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... 4-0 per ton. In exercise of the power conferred on the Central Government under s. 5 of the Ordinance, the said Government made rules ; and r. 3 thereof, the duty of excise imposed under the Ordinance on coal and coke shall, when such coal and coke is despatched by rail from collieries or coke plants, be collected by the Railway Administration by means of a surcharge on freight, and such duty of excise shall be recovered either from the consignor or the consignee, as the case may be. On January 1, 1947, February 1, 1947 and February 7/9, 1947, the second defendant, namely the Amalgamated Coal fields, despatched by rail to the first defendant three consignments of coal from Junner-Deo to Indore. The freight for the three consignments was payable at the destination station i. e. Indore. The first defendant duly paid the freight and took delivery of the coal but by some mistake the cess payable as surcharge on the three consignments was not recovered from the first defendant at the time of delivery of the goods. Under s. 55(5) of the Indian Railways Act the Railway Administration can recover the freight or any balance thereof left unrecovered by way of suit. On April 15, 1953, the Uni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the time of preparing the case, read their brief thoroughly, decide for themselves the questions that will be raised and express them clearly therein. Any dereliction of this obvious duty cannot easily be overlooked. This Court, therefore, ordinarily will not allow counsel at the time of hearing an appeal to raise questions not disclosed in the statement of case. There axe no exceptional circumstances in this case for us to depart from that salutary practice, and we, therefore., cannot allow the appellant to raise these two questions before us. The first question is whether the suit is barred by limitation. The coal cess should have been collected at the time of the delivery of the three consignments, namely, January 9, 1947, February 8, 1947., and February 18, 1947, respectively. The suit was filed on April 24. 1953, that is, more than six years from the date of amount was payable. It is contended that the suit was, therefore, barred ,under Art, 120 of the Limitation Act. The High Court held the suit was within time under Art. 149, read with Art. 50, of the Limitation Act. The said Articles read Description of suit Period Time from which of limi- period begins to tation. run ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be governed only by the residuary Article 120. Under the said article, time runs from the time when the right to sue accrues. It follows that when such a suit is filed by the Central Government, the period of limitation of 60 years should be computed when the right to sue accrues. The right to sue accrued in the present case when the defendants refused to pay the cess when demanded. The decisions relied upon by the learned counsel in support of his contention, namely, Kirpa Sanker v. Janki Prasad Secretary of State for India Guru Prasad Dhur Inderchand v. Secretary of State for India((1941) 9 I.T.R. 673.) and Government of India v. Taylor (A.I.R. 1942 Pat. 87.) have. no bearing on the question raised in the present case, as none of those cases related to a suit filed by Government to recover amount due to it from defendants therein. We, therefore, hold that the suit was clearly well within time and was not barred by limitation. The next contention raises the question of validity of the levy. The argument of the learned counsel may be summarized thus: Ordinance 39 of 1944 was a temporary Ordinance, and that it was repealed by Ordinance 6 of 1947; that the saving clause i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the repeal by this Constitution of the enactments referred to in article 395 but subject to the other provisions of this Constitution, all the laws in force in the territory of India immediatel y before the commencement of this Constitution shall continue in force therein Until altered or repealed or amended by a competent Legislature or other competent authority. On August 26, 1944, the Governor-General of India, in exercise of the powers vested in him under a. 72 of the Ninth Schedule to the Government of India Act, 1935, read 'with India Burma (Emergency Provisions) Act, 1940 promulgated the Coal Production Fund Ordinance 1944 (39 of 1944). to constitute a fund for the financing of activities for the improvement of production, marketing and distribu- tion of coal and coke. This Court in Hansrdi Moolji v. The, State of Bombay([1957].S.C.R.,634) held that the deletion of the words for the space of not more than six months from its promulgation from s. 72 of the 9th Schedule of the Government of India Act, 1935, by s.1(3) of The India and Burma (Emergency Provisions) Act, 1940, had the effect of equating Ordinances which were promulgated between June 27, 1940, and Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be said that the coal cess was levied or collected without the authority of', law. It is when contended that the excise duty not legally be levied on the consignee , who had nothing to do with the manufacture or production of coal. The argument confuses of the incidence of taxation with the machinery provided for the collection thereof. The or an excise duty has been considered by the Federal Court and the Privy Council. In re the Central Provinces and Berar Act No. XIV of 1938(1), which was a special reference by the Governor-General to the Federal Court under is. 213 of the Government of India Act, 1935. Gwyer, O.J., described excise duty thus: But its primary and fundamental meaning in English is still that of a tax on articles produced or manufactured in the taxing country and intended for home consumption. In dealing with the contention advanced on behalf of the Government of India that an excise duty was a duty which may be imposed on home-produced goods at any stage from production to consumption, the learned Chief Justice observed: This is to confuse two things the nature of excise duties and the extent of the federal legislative power to impose them. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e fact of manufacture which attracts the duty,, even though it may, be collected later........... The Judicial Committee, in Governor-General in Council v. Province of Madras ([1942] F.C.R. 90, 101), approved the views expressed by the Federal Court in regard to excise duties. In that case, Lord Simonds, speaking for the Board, observed: An exhaustive discussion of this subject, from which their Lordships have obtained valuable assistance, is to be found in the judgment of the Federal Court in In re the Central Provinces Berar Act No. XIV of 1935 (2). Consistently with this decision their Lordships are of opinion that a duty of excise is primarily a duty levied on a manufacturer or producer in respect of the commodity manufactured or produced. It is a tax on goods not on sales or the proceeds of sale of goods. Here, again, their Lordships find themselves in complete accord with the reasoning and conclusions of the Federal Court in the Boddu Paidanna case(3). Adverting to the decision of Boddu Paidanna with approval, Lord Simonds made the following observations in pointing out the difference between excise tax and sales tax: The two taxes, the one levied on a manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pay the duty. Rule 3 of the Rules made by the Central Government provides for the recovery of excise duty on the coal produced; under the said rule it would be collected by the Railway Administration by means of a surcharge on freight and such duty of excise shall be recovered from the consignor, if the freight charges are being prepaid, at the time of consignment or from the consignee, if the freight charges are collected at the destination of the consignment. The machinery provided for the collection of the tax is, in our view, a reasonable one. Having regard to the nature of the tax, that is, the tax being an indirect one to be borne ultimately by the consumer, it cannot be said that there is no rational connection between the tax and the consign. When the consignor pays., it cannot be denied that it is the most convenient stage for the collection of the tax, for it is the first time the coal leaves the possession of the consignor. The fact that the consignee is made to pay, in the contingency contemplated by r.3(b) of the rules cannot affect the essence of the tax, for the consignor, if he had paid the freight, would have passed it on to the consignee and instead the consignee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d at the time of consignment, and (b) from the consignee, if the freight charges are collected at the destination of the consignment. In the present case, r.3(a) has no application, for the freight charges were not prepaid at the time of consignment, and therefore the only rule applicable where under the Railway Administration earn seek to recover the cess is r.3(b) i.e., the consignee. has to pay it. The rule does not empower the Railway Administration to recover the tax, in the circumstance of the cast,, from the consignor. Learned Solicitor General seeks to sustain the decree of the High Court on the basis of r.6, which reads : Refunds and Recoveries :-(1) Where the amount of excise duty due under these rules has not been collected either wholly or in part or where the amount collected is in excess of the amount due, the Railway Administration shall deal with the under charges or overcharges, as the case may be, on the same principles as apply to undercharges and overcharges in regard to Railway freight charges. It is suggested that, under this rule in the case of an undercharge, the Railway Administration can collect the deficit either from the consignor on consignee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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