TMI Blog1987 (9) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... notice bearing No. 82 of 1977, clarifying that the padding solutions manufactured by the plaintiffs were not subject to excise duty under the Central Excises and Salt Act, 1944. Since the plaintiffs had paid and the defendants had demanded the excise duty, on the basis that the padding solutions manufactured by the plaintiffs were liable to excise duty, it was obvious that the payment had been demanded and made under a mistake of law. The plaintiffs made an application for refunding the amount which they had paid under a mistake. The application was made under rule I of the Central Excise Rules, 1944, but the same was rejected by defendant No. 1 on the ground that it had been made beyond the period of six months which is the period of limitation prescribed for such an application. Thereafter, the plaintiffs gave a notice under section 80 of the Code of Civil Procedure and after the expiry of the period of the said notice, they filed the present suit. The defence to the claim in the suit was that the plaintiffs had not paid the amount under protest and, therefore, they could not claim the amount by way of a suit. It was also contended that if the amount was ordered to be paid t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r an obligation to return the same to their customers. As far as this Bench is concerned, the denial of the refund of duty collected by the taxing department of the Government cannot be upheld on the ground of what is now known as the doctrine of unjust enrichment. We thought that this is well-settled as far as this court is concerned and as far as this Bench of two judges is concerned. Since the point has been argued with some persistence and vehemence, it has become necessary to refer to some of the decisions in this regard. In Parle Products Ltd. v. Union of India (Writ Petition No. 1362 of 1980), decided on July 21, 1986 [1987] 30 ELT 180, by one of us Jahagirdar J., the entire law on the subject till the date of the decision, which was July 21, 1986, has been reviewed. In that judgment, apart from the judgments of this court, the judgments of the Supreme Court on the same question have been noticed and it was held that the amount by way of excise duty, which is collected without the authority of law, must be refunded to the person from whom the same is collected. The doctrine of unjust enrichment cannot be put up as a defence to a claim made on behalf of a citizen or a company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only on the basis of the reasons given in the judgment in the case of Parle Products Ltd. [1987] 30 ELT 180 but also, as we read the judgment of the Division Bench, on the basis that the distinction between a statute or a statutory order dealing with pricing is on a ground different from the ground on which a statute dealing with taxation stands. In the case of the latter, the doctrine of unjust enrichment could not be invoked. Thus we must take it as settled, as far as this court is concerned or, at least, as far as a Division Bench of this court is concerned, that on the basis of the doctrine of unjust enrichment, the court cannot refuse to direct the Government to refund the amounts which the Government has collected without the authority of law. We are sitting as a Division Bench of two judges. The obvious course for us is to follow the law which has been propounded by another Division Bench of co-ordinate strength. The law of precedents, so far as judges of the High Courts are concerned, has been pointed out with sufficient clarity and precision by the Supreme Court in Tribhuvandas Purshottamdas Thakkar v. Ratilal Motilal Patel (70 Bom LR 73). There is nothing in the oath o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Prasad v. State of U. P., AIR 1980 SC 1762, pointed out the importance of following earlier precedents. In his characteristic language, Krishna Iyer J. pointed out as follows (p. 1764): " Every new discovery or argumentative novelty cannot undo or compel reconsideration of a binding precedent. In this view, other submissions sparkling with creative ingenuity and presented with high-pressure advocacy, cannot persuade us to reopen what was laid down for the guidance of the nation as a solemn proposition by the epic fundamental rights case." If the precedents which are established are allowed to be too easily reconsidered or disturbed, it " may well be a kind of judicial destabilisation of State action too dangerous to be indulged in save where national crisis of great moment to the life, liberty and safety of this country and its millions are at stake, or the basic direction of the nation itself is in peril of a shake-up." Referring to Salmond's Jurisprudence (11th Edition), the learned judge reminded that it was wise to remember that fatal flaws silenced by earlier rulings cannot survive after death because a decision does not lose its authority merely because it was badly arg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sell Co. Ltd. v. Broome[1972]1 All ER 801 (HL). In the judgments in Parle Products Ltd.'s case [1987] 30 ELT 180 and Rapidur (India) Ltd.'s case [1987] 27 ELT 222, all the judgments on the question of unjust enrichment have been referred to and examined. Those judgments themselves have been, in turn, referred to and have been examined in detail in one or the other judgments culminating with the judgment of the Division Bench in the case of Rapidur (India) Ltd. [1987] 27 ELT 222. It is, therefore, not possible, as has been suggested, that some judgment of this court or the Supreme Court takes a contrary view and, therefore, this Division Bench is not bound by the judgment of the Division Bench in Rapidur (India) Ltd.'s case [1987] 27 ELT 222. However, a somewhat hesitant argument was advanced on behalf of the appellants on the basis of a difference of opinion between Shah J. and Kolse-Patil J. in their judgments delivered in Associated Bearing Co. Ltd. v. Union of India and Garware Marine Industries Ltd. v. Union of India (Writ Petitions Nos. 679 of 1979 and 3007 of 1980). In his judgment delivered between 15th and 19th of December, 1986, a judgment obviously delivered in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be ignored." The difference between Shah J. and Kolse-Patil J. will naturally be resolved in accordance with the provisions of section 98 of the Code of Civil Procedure. But, on the question of law, it should be, however, clearly stated that the judgments of this court, including the judgments of the Division Benches of this court, the last one being the case of Rapidur (India) Ltd. [1987] 27 ELT 222, have necessarily examined every judgment of the Supreme Court to which Kolse-Patil J. has made a reference and have taken the view that the doctrine of unjust enrichment cannot be invoked so as to defeat the claim of an assessee from whom the State has collected duty without the authority of law. If this is so, we would think that the view expressed by the Division Bench of this court, after examining and interpreting the judgments of the Supreme Court, would be binding upon another Division Bench like ours. (See Panjumal Hassomal Advani v. Harpal Singh Abnashi Singh (76 Bom LR 729)). Kolse Patil J. also thought that the other judgments of the Division Benches of this court have ignored the binding nature of the judgment in the case of Ogale Glass Works (79 Bom LR 37). It is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It may not be out of place to briefly mention the underlying principle on which the courts grant relief to persons from whom taxes have been recovered by the State without the authority of law. The State cannot levy any tax without the authority of law. When, however, the State or the Departments of the State make a demand upon a manufacturer asking the latter to pay excise duty on a particular product and, at a particular rate, the latter has two options. If he does not agree with the demand, he can challenge the same by adopting appropriate proceedings. If, however, he has no dispute in the light of the law understood by him about the nature and extent of the demand made on him, he complies with the demand. If it is later discovered that there was mistake of law in the demand and the payment of the duty, then, naturally he is entitled to ask the person who has collected the duty without the authority of law to refund the same. In such a case, one cannot see how the person or the authority which has collected the duty without the authority of law can contend that the amount will not be refunded to the person from whom the same is collected. It is not as if that the person who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has been urged that the remedy, if any, which could have been availed of by the plaintiffs, could have been within the four corners of the Excises Act, which is a code by itself. It is unfortunate that in the year 1987, the appellants should have thought it fit to present such an application. Apart from the questions arising under the Central Excises and Salt Act, if anything is done which is not warranted by law and which is itself without jurisdiction, it can obviously be challenged in the civil court. If authority is needed, it is in Union of India v. Mansingka Industries Private Ltd. (77 Bom LR 663), wherein it has been pointed out that section 40 of the Central Excises and Salt Act merely provides for immunity or protection against claims of damages to the Government itself or any of its officers for acts done in good faith under the Act; the section does not deal with the question of collection of illegal duty and/or its recovery or refund. The Act provides for the imposition of duty on excisable goods. Therefore, when an attempt is made to levy duty on excisable goods which are not excisable, then such a levy would fall outside the law and would be illegal. The necessary c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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