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TMI Blog1987 (12) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... 1961, a new Act was passed which received the assent of the President. The High Court again struck down the Act declaring it ultra vires the Constitution on August 1, 1963. On December 13, 1963, in Khyerbari Tea Co. Ltd. v. State of Assam [1964] 5 SCR 975, in a challenge to the Act under article 32 of the Constitution, this court held the Act to be intra vires. On December 19, 1966, judgment was passed in Civil Rule No. 190 of 1965. On April 1, 1968, the appeals preferred by the State of Assam against the High Court order dated December 13, 1963, were allowed on the basis of the declaration of the Act to be intra vires the Constitution. Thereafter, notices were issued by the Superintendent of Taxes, Nowgong, requiring the appellant under section 7(2) of the Act to submit returns for the period ending June 30, 1961, September 30, 1961, December 31, 1961, and March 31, 1962. Returns were duly filed. Assessment orders were passed under section 9(3) of the said Act. On July 10, 1973, the High Court passed the judgment in Loong Soong Tea Estate (Civil Rule No. 1005 of 1969) declaring the assessment as without jurisdiction. It is the case of the appellant-petitioner that in view of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , and paid the various taxes. In the judgment under appeal, after elaborate discussion, the High Court came to the conclusion that when a petitioner approaches the High Court with the sole claim for refund of money by a writ of mandamus, the same is normally not granted but where the refund is prayed as a consequential relief, the same is normally entertained if there is no obstruction or if there be no triable issue like that of limitation which could not be conveniently tried in a writ petition. In this case, indisputably, it appears that tax was collected without the authority of law. Indeed, the appellant had to pay the tax in view of the notices which were without jurisdiction. It appears that the assessment was made under section 9(3) of the Act. Therefore, it was without jurisdiction. In the premises, it is manifest that the respondents had no authority to retain the money collected without the authority of law and as such the money was liable to be refunded. The only question that falls for consideration here is whether, in an application under article 226 of the Constitution, the court should have directed refund. It is the case of the appellant that it was after the ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r opinion rightly, that the claim for refund was consequential relief. In Tilokchand Molichand v. H. B. Munshi, Commissioner of Sales Tax [1970] 25 STC 289 (SC); [1969] 2 SCR 824, the claimants in that case contended that they did pay taxes under section 21(4) of the Bombay Sales Tax Act, 1953, which was ultra vires on the particular ground on which it was struck down by this court. On March 28, 1958, the petitioners in that case filed a writ petition in the High Court and contended that section 21(4) of the said Act was ultra vires the powers of the State Legislature and was violative of articles 19(1)(f) and 265 of the Constitution. The single judge of the High Court dismissed the petition on the ground that the petitioners defrauded their customers and so were not entitled to any relief even if there was a violation of fundamental rights. The Appellate Bench of the High Court dismissed the appeal on the ground that it would not interfere with the discretionary order of the single judge. Thereafter, it appears that on December 24, 1958, the Collector attached the properties of the petitioners for recovering the amount as arrears of land revenue and the petitioners paid the amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mphasised that it was not possible for this court to lay down any specific period as the ultimate limit of action and each case will have to be considered on its own facts. A petition under article 32 was neither a suit nor an application to which the Limitation Act applied. Further, putting curbs in the way of enforcement of fundamental rights through such legislative action might be questioned under article 13(2) for, if a short period of limitation was prescribed, the fundamental right might be frustrated. Therefore, for the matter of relief in each case, this court had to exercise its discretion from case to case and where there was appearance of an avoidable delay and the delay affected the merits of the claim, this court held the party disentitled to invoke its extraordinary jurisdiction. In the facts of that case, the majority judges found that by his own conduct, the petitioner had abandoned his own litigation years ago and the court would not apply the analogy of the article in the Limitation Act in cases of mistake of law and give him relief. BACHAWAT J., in a concurring judgment, observed that the normal remedy for recovery of money paid to the State under coercion or m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er or a dealer any sum paid or realised in excess of the sum due from him under this Act either by cash or, at the option of the producer or dealer, be set off against the sum due from him in respect of any other period. Section 23 applies only in a case where money is paid under the Act. If there is no provision for realisation of the money under the Act, the act of payment was ultra vires, the money had not been paid under the Act. In that view of the matter, section 23 would not apply. The High Court, in the instant case, after analysing the various decisions came to the conclusion that where a petitioner approached the High Court with the sole prayer of claiming refund of money by a writ of mandamus, the same was normally not granted but where the refund was prayed for as a consequential relief, the same was normally entertained if there was no obstruction or if there was no triable issue like that of limitation. We agree that normally in a case where tax or money has been realised without the authority of law, the same should be refunded and in an application under article 226 of the Constitution, the court has power to direct the refund unless there has been avoidable laches ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this connection to R. L. Kapur v.; State of Tamil Nadu [1972] 3 SCR 417. There, the question arose about punishing for contempt. The jurisdiction conferred on the High Court under article 215 of the Constitution to punish for contempt of itself was special one, not arising or derived from the Contempt of Courts Act, 1952, and, therefore, not within the purview of the Penal Code. Such position is also clear from the provisions of the Contempt of Courts Act. The effect of section 5 of that Act was only to widen the scope of the existing jurisdiction of a special kind and not conferring a new jurisdiction. So far as contempt of the High Court itself is concerned, as distinguished from that of a court subordinate to it, the Constitution vested these rights in every High Court, and so no Act of a Legislature could take away that jurisdiction and confer it afresh by virtue of its own authority. That being the position, this court held that section 25 of the General Clauses Act would not apply. Similarly, it appears to us that this was a tax realised in breach of the section, the refund being of the money realised without the authority of law. The realisation is bad and there is a conco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uing a writ of mandamus directing this to be done since there was unreasonable delay in filing the petition. The High Court rejected all the contentions of the appellant and a writ of mandamus was issued as prayed for. It was held that the tax was violative of article 301 of the Constitution. But it was held that even though the tax contravened article 301 of the Constitution, it was valid if it came within the saving provisions of article 304 of the Constitution. Tobacco manufactured or produced in the appellant-State, similar to the tobacco imported from outside, had not been subjected to the tax and, therefore, the tax was not within the saving provisions of article 304(a) of the Constitution. It was reiterated that the tax which had already been paid was so paid under a mistake of law under section 72 of the Indian Contract Act. The High Courts bad power for the purpose of enforcement of fundamental rights and statutory rights to grant consequential reliefs by ordering repayment of money realised by the Government without the authority of law. It was reiterated that as general rule, if there has been unreasonable delay, the court ought not ordinarily to lend its aid to a party ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act where it was stated that no claim to any refund shall be allowed unless it was made within one year from the date of the original order of assessment or within one year of the final order passed on appeal or revision, as the case may be, in respect of such assessment. It was contended on behalf of the respondents that here a fixed period of limitation was prescribed and by virtue of article 226 of the Constitution, we should not allow subversion of that rule. This principle, in our opinion, in view of the fact that the rule was unconstitutional, will have no application. In Shiv Shanker Dal Mills v. State of Haryana [1980] 1 SCR 1170, Krishna Iyer J., speaking on behalf of himself as well as on behalf of R. S. Pathak J., as the learned Chief justice then was, and A. D. Koshal J. observed that where public bodies under colour of public laws recover people's money, later discovered to be erroneous levies, the dharma of the situation admits of no equivocation. There was no law of limitation especially for public bodies on the virtue of returning what was wrongly recovered, to whom it belongs. In our jurisprudence, it is not palatable to turn down the prayer for high pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t did not ordinarily permit a belated resort to the extraordinary remedy under the writ jurisdiction because it was likely to cause confusion and public inconvenience and bring in its train new injustices. It was emphasised that this rule of laches or delay is not a rigid rule which can be cast in a strait jacket formula. There may be cases where despite delay and creation of third party rights, the High Court may still, in the exercise of its discretion, interfere and grant relief to the petitioner. But cases where the demand of justice is so compelling that the High Court would be inclined to interfere in spite of delay or creation of third party rights would, by their very nature, be few and far between. Ultimately, it would be a matter within the discretion of the court ; ex hypothesi every discretion must be exercised fairly and justly so as to promote justice and not to defeat it. We are in respectful agreement with this approach also. In this case, looked at from one point of view, it is only on the delivery of the judgment in Loong Soong's case in 1973 (Civil Rule No. 1005 of 1969 decided on July 10, 1973-Gauhati High Court), that the appellant realised the right to cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of a Constitution Bench of this court in State of Madhya Pradesh v. Bhailal Bhai [1964] 15 STC 450; [1964] 6 SCR 261 : " Though the provisions of the Limitation Act do not, as such, apply to the granting of relief under article 226, the maximum period fixed by the Legislature as the time within which the relief by a suit in a civil court must be claimed may ordinarily be taken to be a reasonable standard by which delay in seeking remedy under article 226 could be measured ......... Where the delay is more than that period, it will almost always be proper for the court to hold that it is unreasonable." He also relies on Cawasji and Co. v. State of Mysore [1975] 2 SCR 511 and draws our attention to the decision in Vallabh Glass Works v. Union of India [1984] 3 SCR 180, where the claim for refund in respect of period beyond three years was rejected. He contends, on the strength of the above decisions, that the High Court rightly rejected the appellant's claim for refund. On the other hand, it is contended for the appellants that a writ petition seeking refund of taxes collected without the authority of law cannot be rejected on the ground of limitation or delay unless such ..... X X X X Extracts X X X X X X X X Extracts X X X X
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