Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding


  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

TMI Blog

Home

1975 (1) TMI 96

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ps Markets Act (XX of 1935). The main intendment of the Act is to provide for the better regulation of buying and selling of commercial produce in the State of Tamil Nadu and in order to achieve that object, a machinery is set up to control the trade in commercial crops and impose restrictions on the carrying of such trade. Cotton is one of the commercial crops, which comes within the purview of Act XX of 1933. Under the provisions of the Act, the State Government is entitled to exercise control over the purchase and sale of commercial crops including cotton, and declared certain areas to be specified areas within which such control could be exercised by the State. In order to achieve the said purpose market committee are established by the State Government for every notified area. Once a market committee is set up, and a notified area is notified, then the sale and purchase of commercial crops could be carried on only in such places as are notified and in accordance with the conditions of a licence issued by the appropriate authority. O: .e of the provisions of the Act authorises the market committee to levy such fee on the notified commercial crop bought or sold in the notified a .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... towns like Virudhunagar, Rajapalayam, and Sattur. The complaint is that the defendant as a market committee, did not have the jurisdiction to levy and collect cess under the Madras Agricultural Produce Markets Act, 1959 (XXIII of 1959) prior to the date when it came into force and that, therefore, the collection of the cess made during the period commencing from 22nd October, 1962 to 27th May, 1964 is invalid and that all such amounts which were paid under a mistake, is recoverable by the plaintiff. The plaintiff's case is that it was during the third week of September, 1965, it came to know about the unauthorised nature of the levy collected from it from 22nd October, 1962. In that situation, it laid the present suit on 28th August, 1968 for the recovery of a sum of ₹ 19,731.32 made up of ₹ 2,982.92 collected by the defendant as cess from its Virudhunagar branch, ₹ 8,383.50 from its Rajapalayam bi'anch, and ₹ 8,364.90 from its Sattur branch. The defendant's case is that the levy was authorised and that the defendant in exercise of its statutory functions, imposed the levy and collected the fee and that it cannot be challenged or declared to be .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... enged before us. Even otherwise, in the view that we intend taking on the issue on limitation, it is not necessary even for us to consider the hesitant argument addressed by the learned Counsel for the appellants. 7. The material point, however, is whether the suit claim is barred by limitation. We have already referred to the fact that the plaintiff's case is that it paid the cess for the period commencing from 22nd October, 1962 to 27th May, 1964, under a mistake of law as well as fact. The plaint, to recover such amounts paid by the plaintiff under mistake, was filed on 28th August, 1968. Considerable reliance is placed on Exhibit A-1 , which is a letter written by the Raman athapu ram Market Committee, Virudhrnagar, to East India Corporation Ltd., Virudhunagar. It runs as follows: In the notification, the previous order was cancelled and a new order was published. Nothing is said about the cess, whether the amount collected is to be refunded or collection is to be continued. For conducting normal work, the committee resolved to collect cess from 27th May, 1964. The argument is that the plaintiff's knowledge as to its quondam mistake in the matter of the payme .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... arty entitled to aright arising out of the existing benefit should not lightly be made by Courts. But such, a pleading as to the bar of the cause of action should flow from a permissible construction of the statutory provision. 11. We shall now refer to the pleadings to find as to hew the plaintiff, who has come to Court, could plead that its cause is in time. According to the plaintiff, during the third week of September, 1965 it came to know about the unauthorized and illegal levy and. collection of the cess by way of sales-tax from 18th April, 1962 and thereupon it made enquiries and that the Ramanathapuram Market Committee, Virudhunagarj under Exhibit A-1 held out that the previous notification was cancelled and a new order was published. The plaintiff desires to infer that it is only from Exhibit A-1 the plaintiff came to know about the publication of a new order and that that date which Exhibit A-1 bears, ought to be the date when the plaintiff discovered the mistake. In the cause of action paragraph, the plaintiff states that, the cause of action for the suit, arose when the illegal collections have been made during the period 22nd October, 1962 to 26th May, 1964 and on 2 .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... diligence the mistake at a time beyond the period of limitation. He solely relied upon the pleading in the plaint wherein the plaintiff alleged that it came to know of the mistaken payment and the unauthorised levy only on 20th September, 1965 and reading it in the light of Exhibit A-1 found that there was no other document in the case to indicate that the plaintiff could have discovered the mistake prior to 20th September, 1965. He held, therefore, that the suit was within time. 13. The earlier law on the aspect under consideration was covered by two Articles under the Limitation Act, 1908. Article 95 dealt with a cause grounded on fraud. Article 96 dealt with the reliefs on the ground of mistake. In the former Article a period of three; years was provided to seek for a relief on the ground of fraud from the time when the fraud becomes known to the party wronged. Similarly,' a period of three years was provided in cases wherein a relief on the ground of mistake is asked from the time when the mistake becomes known to the plaintiff. In the new Act, the appropriate Article, which could, if at all, be attracted is Article 24, which runs as follows: But this has to be .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... aid, it would be unreasonable to expect an exact definition of the word ''reasonable . Reason varies according to times and circumstances in which the individual thinks. Thus, the word reasonable has always been understood in law as prim a facie mean in g, reasonably in regard to those circumstances of which the actor called on to act reasonably, knows or ought to know. It is also a fundamental maxim, of things relating to each other, one being known, the other is also known . In the instant case, when the plaintiff knew about the cancellation of the earlier notification by a later notification then it is normally and reasonably expected that it knew or with reasonable diligence ought to have discovered that the payments made by it under the earlier cancelled notification were irregular and improper and the payments were made under a mistake of law or of fact. The cancellation of the earlier order is intimately connected with the mistake in the payments made by the plaintiff pursuant to the first withdrawn order. As' it knew or ought to have known and with reasonable diligence should have discovered that the earlier notification has become inoperative by its cancell .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... rom which time begins to run. On the facts, the learned Judge held that the defendant did not discharge his burden. In our case, the specific allegation of the defendants-appellants is that the plaintiff, by reason of the second notification, should be presumed to have discovered the mistake in the earlier payments on that very date. This contention is not an unreasonable contention, for it is always necessary for Courts to be satisfied with the reasonableness within reach. It cannot be said that the contention of the appellants that on the date when the second notification became effective, the plaintiff should be deemed to have discovered the mistake, is an unreasonable contention or conclusion. 18. We have already seen Exhibit A-1. The plaintiff was making enquiries and it was only, pursuant to such enquiries that the defendant wrote Exhibit A-1 in reply. It cannot, therefore, be said that Exhibit A-1 gave any cause of action at all to the plaintiff. On the other hand,' it would be fair to assume that the enquiries which the plaintiff was making prior to the date when Exhibit A-1 was written by the defendants, was in relation to the refund of the cess paid by it under a m .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

 

 

 

 

Quick Updates:Latest Updates