1996(10)LCX0042

IN THE HIGH COURT OF MADHYA PRADESH, JABALPUR BENCH AT INDORE

T.S. Doabia, J.

BHAILAL BHAI ZAVER BHAI PATEL

Versus

UNION OF INDIA

Writ Petition No. M.P./896/87, decided on 4-10-1996

Cases Quoted

Misc. Petition No. 437/88                                                                                                        [Para 2]

Indian Oil Corpn. v. Municipal Corpn. — AIR 1993 SC 944                                                  [Para 2]

Advocated By : Shri J.K. Upadhaya, Advocate, for the Appellant.

 Shri B.G. Neema, Advocate, for the Respondent.

[Judgment]. - In this petition under Articles 226 and 227 of the Constitution of India, the order passed by the authorities under Central Excises and Salt Act, 1944 (hereinafter referred to as the Act) is being challenged. It is not necessary to notice the detailed facts. This is because, the petitioner submits that they paid duty and this duty was not in fact payable. It is submitted that this was paid under a mistake. They accordingly submitted applications for refund. Some of the applications were allowed. Some were dismissed. These were dismissed on the ground that the petitions had been preferred beyond the prescribed period, under the Act. The requirement of law is that an application for refund should be made within six months from the relevant date. It is also not in dispute that these applications were in fact barred by limitation. As indicated above, it was this plea of limitation which was used against the petitioner and refund was not ordered.

2. The learned Counsel appearing for the petitioners submits that plea of limitation should not be raised by the State in such matters. For this, reliance is placed on a Division Bench judgment of this Court given in Miscellaneous Petition No. 437 of 1988. Paras 4 and 5 are relevant. These be noted :

“As pointed out by the Supreme Court in the Madras Port Trust v. Hymanshu International - AIR 1979 SC 1144, the plea of limitation should not have been invoked by the Asstt. Collector. It is contrary to the principles as laid down by the Supreme Court.

Learned Counsel for the petitioner placing reliance upon the decision of the Supreme Court in the Madras Port Trust (supra) submitted that it does not behove the State to invoke such pleas of limitation in order to defeat otherwise a just claim."

Sitting singly I am bound by the observations made by the Division Bench. As such, this petition is allowed. The petitioners are held entitled to refund. It is however, made clear that respondents-authorities while re-examining the matter of refund would be within their rights to examine the impact of the proviso to Section 11B of the Act. This proviso is to the effect that if the person seeking refund has passed on the burden to the consumer then the refund would not be permissible. Thus, judicially enunciates principle of unjust enrichment has been given a statutory shape. In Indian Oil Corporation v. Municipal Corporation, Jullundhar - AIR 1993 SC 944 the view expressed is as under :

“Before parting with the appeal, we would however, like to take note of the submission made on behalf of the Municipal Corporation with regard to the question of refund of the octroi duty, already deposited by the appellant. The question of refund, in our opinion, does not arise. The IOC has collected the octroi duty from its dealers and agents, who have in turn passed on the burden to the consumer. Thus, having collected the octroi duty, there is no equity in favour of the IOC to claim a refund of the same. Learned Counsel for the appellant also conceded that the question of refund, in the facts and circumstances of the case, does not arise and we, therefore, hold that the appellant shall not be entitled to any refund of the octroi duty, already deposited by the appellant with the Municipal Corporation.”

Thus, on the basis of judicial precedents and on the basis of statutory provision, the petitioners would be entitled to refund only if they have not passed on the burden to the consumers. The respondent-Assistant Collector would pass a fresh order in accordance with law. The petitioners would not be denied the refund on the ground of limitation.

This petition is disposed of accordingly.

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Equivalent 1997 (89) ELT 27 (M.P.)