TMI Blog1977 (12) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... the Petitioners, they imported various kinds of paper including the three varieties which were a trade name Greaseproof paper, Vegetable Perchment paper and Glassine paper in the year 1965-66. They went on paying 1000% duty on Glassine paper as also Vegetable Perchment paper. So far as the Greaseproof paper was concerned, it was so imported by this name, and they were charged only 50%. On the other two Items 100% duty was charged to them. This was because the petitioners were not aware due to mistake of fact or law or both that the other two varieties are also entitled to exemption of 50% duty. Accordingly, as many as 17 Bills of Entry were presented between April 1965 to April 1966 relating to Vegetable Perchment paper as also Glassine paper. 100% duty was recovered from them which was paid. 4. In or about September 1966 the Petitioners got information that for these two varieties of paper only 50% of duty was being charged at Madras and Calcutta ports. This was because the two varieties were being treated as Greaseproof paper for the purpose of classifying them under Entry No. 5 to the Customs Notification. 5. An officer of the Customs Department one Mr. Lal was immediately ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e authorities had no right at all in law to charge anything more than 50% duty. The assessment as well as the payment has been by mutual mistake of fact and law. The Petitioners never specifically represented that the two varieties of paper were in fact Greaseproof paper. There was, therefore, no occasion when Customs Authorities were ever called upon to decide that question. On the mistaken assumption that specific exemption is not attracted because the trade name of these two varieties of papers are different, the taxation went on as a matter of mistake. If that is so, Petitioners say that even though the petitions for refund were filed after the limitation under Section 27 of the Customs Act, refund should have been allowed as the recovery was without the authority of law. If within three years, which would be a legitimate time to claim refund by a Civil action, the authorities themselves should have refunded the excess amount. 9. So far as the present petition is concerned, it is urged that the Petitioners came to know that the two varieties of paper could be taxed at a lesser rate for the first time in September 1966. In other words, the alleged mistake was discovered for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounts paid between April 1965 and April 1966. The theory of knowledge dawning upon the petitioners for the first time in September of 1966 is being denied by the respondents. Whether, therefore, the Petitioners got knowledge of the mistake for the first time in September of 1966 is a matter which will require evidence to be led. This always depends upon a frame of mind of the party and the information available to him. Prima facie the petition having been filed beyond the three years, a suit would also be barred by limitation. Where an important defence like limitation is available to the suit because of the delay in filing the Petition, the Court should not entertain this petition at all. 12. It is further added that the Pleading regarding Article 14 of the Constitution of India is also not available to the Petitioners. It is not true that duty was being charged at 50% on some papers at Madras and Calcutta. The alleged information of the Petitioners seems to be fictitious. It has been ascertained that at Madras all along 100% duty was charged. In Calcutta the procedure was that actual samples were taken and examined. Where the Vegetable Perchment paper or Glassine paper was act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Board with reference to a particular limited point. It may bind a Customs Officer in the assessment but may not necessarily bind a citizen who is free to dispute that ruling and claim exemption in respect of any particular duty. 15. All said and done it is no more now in dispute that Vegetable Perchment paper and Glassine paper have to be treated as falling under the category of greaseproof paper and accordingly benefit of exemption notification No. 33-Customs, dated 28th February, 1965 is to be extended to the two varieties of paper. The communication also says that Tariff becomes effective with effect from 1966-67. The Petitioners have thus established the fact that the two types of papers in dispute are Greaseproof papers entitled to 50% of exemption in terms of the exemption notification. 16. The main dispute, however, centres round the question, whether the recovery of the duty at 100% until the dispute was raised and settled by the Central Board of Excise and Customs could be said to be wholly outside the Act and wholly illegal. The department's pleading is that even though all kind of papers fall within the general entry No. 44 of the Indian Customs Tariff, the exempti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indicated that claim for refund of any duty shall be entertained in no other manner than as provided by Section 27. The only exception is incorporated in Section 26. 20. It is not possible for me to accept the argument of Mr. Dhanuka. It is well settled that the jurisdiction of the Civil Court can be said to have been deprived either by express provision or necessary implication. Where there is no express provision, an inference against taking away of the Civil Court's jurisdiction is not to be readily drawn. If a given Act offers a complete substitute machinery for disposing and deciding claims and shows by express language or by implication that the Civil Courts shall not deal with claims, then only that inference will be drawn. The usual Section which gives immunity to the Government officers acting bona fide under the provisions of the Act is not by itself an indication that the jurisdiction of the Civil Court has been taken away. 21. In the case of Provincial Govt., Madras v. J.S. Bassapa, A.I.R. 1964 S. C. 1873, the Supreme Court has pointed out that original Section 18 of the Madras General Sales Tax Act (19 of 1939) merely applies to suits for damages and compensation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... departmental appeals having failed, the plaintiff filed a suit for a declaration that the decision of the Customs authorities was clearly wrong and that he was entitled to the recovery of the parts on payment of appropriate duty under entry No. 295 of the Import (Control) Order. A learned Single Judge of this Court held in favour of the Plaintiff on facts. According to him, all the parts were properly imported in consequence of the terms and conditions of the import licence. The Customs authorities could not put the parts together in an imaginary manner and treat the imported goods as falling under a different entry altogether. Having given that finding in favour of the plaintiff, the suit was still dismissed because, according to the learned Judge, the decision of the Customs Authorities could not be challenged in a civil court as it had no jurisdiction to interfere with the finding of the Customs Authorities. The Division Bench while allowing the appeal, however, took a contrary view. According to them, the Customs Authorities had no right to do what they did. The import was a valid import under Item in Entry No. 295 and by a certain manipulation a different entry could not be in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n other words, if the importation does not fall under the Act at all, or is beyond the jurisdiction of the officers, the order can be challenged before the Civil Courts. It is entirely different that under the Act certain limits have been laid down. If applications are disposed of only on the technical ground of limitation, as has been done in the present case, it would not be a decision on the merits in the sense whether the article was in fact classified under a particular entry and, therefore, the refund is not permitted on the merits. 25. Mr. Rana also relied upon the judgment in Coffe Board v. Joint Commercial Tax Officer, A.I.R. 1971 S.C. 870, for two propositions. According to him, if the action is ultra vires of the statute or though intra vires is without jurisdiction, or principles of natural justice are violated, a right to move the Supreme Court under Article 32 of the Constitution for enforcement of fundamental right exists. Since the order clearly affects property of a citizen he can move the Supreme Court by an application. If that could be done, there should be no objection in a case like this to file a Writ Petition for getting refund from the respondents. He als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proposition as to what constituted a demand or assessment of a tax or duty without the authority of law. In the case of Dattatraya Nagesh Deodar v. The Poona City Municipal Corporation, 62 Bom. L.R. 71, the facts were that the Poona Municipal Corporation was not entitled to recover any octroi duty on goods in transit. However, under the Rules of the Corporation which were continued even after the passing of the Bombay Provincial Municipal Corporation Act, 1949, the Municipality was charging 10% on the octroi paid, when the goods went out of the Corporation limits at the other end. This recovery of 10% was challenged as unlawful recovery and a civil suit was filed by Plaintiff Deodhar in the Poona Civil Court. As he did not succeed he carried an appeal to this Court. The Division Bench in the above judgment held that the Poona City Municipal Corporation was not competent to impose a tax on octroi refunds after February 15, 1950, when the Bombay Provincial Municipal Corporation Act, 1949 was applied to it. Such tax would be ultra vires the powers of the Corporation and illegal and ineffective and the Corporation would be bound to refund any amount recovered by it in enforcement of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f limitation for the recovery of that amount paid under mistake is with reference to Article 24 of the Limitation Act of 1963. That period is three years when the money is received by the defendant. That being so, he wants to rely upon Section 17(1) of the Limitation Act making the limitation commence from the date of the realisation of the mistake. Mr. Rana has to argue in that manner because the view to which I have already referred shows that the present petition is not within three years on the date of payment. All the payments are between April, 1965 and April, 1966. The present petition is filed on 7th August, 1969. According to the Petitioners, they realised the mistake for the first time in September, 1966 and immediately took an appointment with the Collector of Customs Mr. Lal. If this is the point of time when the mistake was discovered, the present petition on 7th August 1969 is within three years from that date and should be entertained as being within the period of limitation. This is stated even though there is no specific period for filing a writ petition. Accordingly, the High Court did not entertain a writ petition where the claim is found to be barred by the law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... take of law, ordinarily, therefore, it is the duty of the State to refund the tax subject to the provisions of the Act and if a Civil Court is approached subject to limitation under the Act or under Article 96 of the Limitation Act, viz. three years. On that conclusion being reached, the matter was remanded down for finding out how much tax relates to outside State and whether writ petition was filed within three years from the date of the mistake. 33. Similar approach regarding limitation has been adopted by the Supreme Court also in the case of Gill Co. Pvt. Ltd. v. Commercial Tax Officer, Hyderabad, (1968) 22 Sales Tax Cases 524. The writ petition related to the tax paid for the years 1959-60, 1960-61, 1961-62 and 1963-64. It was alleged that the payment was made under mistake and the writ was filed in the year 1967. The High Court summarily rejected the petition. The Supreme Court holds that it was not a proper course to adopt and the High Court ought to have investigated as alleged whether the mistake was discovered for the first time in January of 1967 and after such investigation it should have disposed of the petition. The petition was accordingly remanded to the High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wants to interfere, it must come to the conclusion that the approach was also erroneous without which interference under Article 226 of the Constitution should not be made. 35. Before citing authorities to support this approach Mr. Dhanuka raised one more point which was not pleaded earlier. According to him, in this petition the petitioners merely asked for the refund of duty. They have not asked for quashing the assessment orders and refund by way of consequence thereof. A mere prayer for recovery of money which is at best be made in a civil suit cannot be the subject-matter of a writ petition. He relied for this purpose on Suganmal v. State of Madhya Pradesh and Ors. A.I.R.1965 S.C. 1740. This is not a defence taken in the pleadings by the respondents. The recovery under the Indore Industrial Tax Rules, 1927 was held by the appellate authority to be unlawful. However, there was no provision to order refund by appellate authority even if it allowed the appeal. Hence a writ petition was filed. It was obvious that the recovery was already declared unlawful and what was to be done in the writ petition was mere recovery of tax. The Supreme Court points out that for such a recovery ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . If reasonable defence of limitation or a triable issue of limitation arises from the pleadings of the party the claimant should be referred to a regular civil suit when all the circumstances will be proved by leading evidence. It will then be possible for the court to come to a conclusion whether the action prima facie beyond limitation must still succeed in view of the provisions of Section 17 of the Indian Limitation Act. There is no doubt that this approach will have to be borne in mind when I discuss the factual aspect in the present case. At the same time this judgment helps the petitioners to some extent. Where sales tax, assessed and paid by the dealer is declared by a competent court to be invalid in law, the payment of tax already made is one made under a mistake within Section 72 of the Contract Act and so the Government to whom the payment has been made by mistake must in law repay it. The High Court has in exercise of its jurisdiction under Article 226 of the Constitution in such circumstances to enforce the fundamental rights and statutory rights to give consequential relief by ordering repayment of money realised by the Government without the authority of law, and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was beyond time and the time varied between one month to four months. The Supreme Court held that the authorities were right in rejecting the refund applications, being beyond time. 41. This judgment at best shows that where the jurisdiction existed in the officer concerned, but there was an error in the exercise thereof, the only remedy was to go through the procedure prescribed by law within limitation and if remedy is not resorted to within limitation the Writ Court would not help the Petitioner of that type. 42. The next judgment relied upon by Mr. Dhanuka is the case of M/s. D. Cawaji Co. v. State of Mysore, 1978 E.L.T. (J 154)=A.I.R. 1975 S.C. 813. This case particularly turns upon the facts before the Court. In an earlier petition when the provisions of certain Mysore Act were challenged as unconstitutional no refund was claimed. It was only subsequently that refund was claimed and that too in the petition filed after inordinate delay. The High Court refused to grant any relief and that approach of the High Court is considered reasonable in dismissing the appeal. They specifically observed that no reason was assigned as to why refund was not claimed earlier and in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ived a letter from as high officer as a Commissioner of Division that the gradation list made in 1959 was only provisional. He never heard that this was final list. Only after the judgment of the Supreme Court, he realised that he had a case to agitate. In the circumstances, the Supreme Court felt that the petition should be entertained under Article 32 and appropriate relief granted to the petitioner. 44. There are a few judgments cited by him which deal with the wrong classification of goods under this entry. It cannot be doubted that the law is clear enough, viz. that mere classification of entries cannot amount to the passing of order beyond jurisdiction. It is also the law that mere wrong interpretation either of the provisions of law or entries of taxing statutes by themselves do not create a situation where fundamental right is involved. In order that the threat should be really one to property by way of affecting fundamental right, it must be shown that the action was beyond jurisdiction or that it was ultra vires the Act itself or the provisions were unlawful and unconstitutional. He relied upon Kailash Nath v. State of U.P., A.I.R. 1957 S.C. 733; M/s. Pioneer Traders v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... higher rate of duty. They want to clear the goods under protest and they would lodge the claim after payment of duty. The same endorsement is made on Bill of Entry No. 13. What is stated there is that these goods were required urgently for the factory. The Petitioners therefore request that they may he released without test on payment of higher rates of duty. They did not want any refund. On the third Bill of Entry at Serial No. 15 the Petitioners say that they did not claim lower rate of excise duty and hence the samples may not be sent for test. 47. It may now be noted that there is a further endorsement on will of Entry at Serial No. 13 by the Customs Department and that endorsement is in the following terms : "Gms. of the goods as per invoice is 45. An examination order was given because if, the grammage falls between 40-45 excise duty will be 42 paise. Party states (in reverse) that we will pay higher rate of duty and went prefer any claim for refund. A sample however, will be drawn for test in Second Check." These are the total remarks that are available on the basis of the Bills of Entries. 48. In an affidavit dated 2nd December 1975 Mr. Talwar, a Director of the Pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Aktiebolget Jan Libeign Ltd. from Sweden who were the manufacturers of these papers. A person belonging to that organisation who were the manufacturers of paper certified by a letter that Glassine paper is a glazed Greaseproof paper and it has been explained in the letter by pointing out that different processes of manufacture, which make one paper glazed and the other unglazed. Otherwise it is a Greaseproof paper. When this information became available because of the doubt created from the information received from Calcutta and Madras, the Petitioners realised for the first time in or about September, 1966 that two varieties of paper in fact fell under the exemption Notification. 51. I may point out there that the Petitioners plead specifically in their petition that on 23rd September, 1968 the Petitioners made oral representations to Mr. Lal, the Secretary of the Central Board of Revenue and brought to his notice, viz. difference in the assessment of similar paper at the ports of entry at Calcutta and Madras. On his directions they made a written representation on 4th October, 1966 and made out a full fledged case for exemption by attaching the information of the Manufacturers ..... X X X X Extracts X X X X X X X X Extracts X X X X
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