1996 JTR(SC) 240
1996 AIR(SC) 2212 ; 1996 AIR(SCW) 2699 ; 1996 28 AllLR 24 ; 1996 1 CCC(SC) 207 ; 1996 1 CivCC 694 ; 1996 1 CLT(SC) 507 ; 1996 1 CurCC(SC) 207 ; 1996 2 JT 167 ; 1996 1 MLJ 105 ; 1996 1 RRR 670 ; 1996 2 Scale 14 ; 1996 2 SCC 496 ; 1996 1 SCR 1147 ; 1996 1 UJ 753 ; 1996 2 Supreme 127
1996(2) SUPREME 127
SUPREME COURT OF INDIA
K. Ramaswamy and G.B. Pattanaik, JJ.
P.K. Kutty Anuja Raja & Anr. - Appellants
versus
State of Kerala & Anr. -Respondents
Civil Appeal No. 1998 of 1977
Decided on 1-2-1996
Counsel for the Parties :
For the Appellant : A.S. Nambiar, Sr. Adv.
IMPORTANT POINT
The knowledge of the mistake of law to the assessee is from the date of High Court s Judgment modifying the assessment and the same cannot be countenanced for extended time till the appeal was disposed of unless, there was stay of High Court s Judgment.
Act
Referred
:CONTRACT ACT : S.72
LIMITATION ACT : S.3, S.4, S.24
A) Relevant laws and sections are not explicitly cited in the judgment.
B) Limitations period runs from the date when the cause of action accrues; once limitation starts running, it cannot be interrupted by pendency of an appeal without a stay; knowledge of mistake does not extend limitation unless operation of judgment is stayed.
Facts of the case:
The agricultural income tax assessment on an estate was quashed by the High Court on January 1, 1968. Subsequent partial payments were made in 1960. A suit for recovery by successors was filed in 1974, after the limitation period had expired. The trial decreed the suit, but the appellate court held it barred by limitation.
Findings of Court:
The cause of action to sue for refund accrued on January 1, 1968, when the assessment was quashed. The limitation period commenced from that date and ran uninterrupted. The suit filed in 1974 was time-barred as it fell outside the prescribed limitation period.
Issues:
Whether a suit for recovery of amounts paid under a quashed assessment is time-barred by limitation when filed years after the decree that quashed the assessment.
Ratio Decidendi:
Limitation begins to run from the date the cause of action arises, here January 1, 1968, and is not suspended by the mere pendency of an appeal; thus, the suit is barred.
Result:
Appeal dismissed; suit decreed by the trial court is not maintainable due to limitation.
A) Relevant laws and sections are not explicitly cited in the judgment.
B) Limitations period runs from the date when the cause of action accrues; once limitation starts running, it cannot be interrupted by pendency of an appeal without a stay; knowledge of mistake does not extend limitation unless operation of judgment is stayed.
Facts of the case:
The agricultural income tax assessment on an estate was quashed by the High Court on January 1, 1968. Subsequent partial payments were made in 1960. A suit for recovery by successors was filed in 1974, after the limitation period had expired. The trial decreed the suit, but the appellate court held it barred by limitation.
Findings of Court:
The cause of action to sue for refund accrued on January 1, 1968, when the assessment was quashed. The limitation period commenced from that date and ran uninterrupted. The suit filed in 1974 was time-barred as it fell outside the prescribed limitation period.
Issues:
Whether a suit for recovery of amounts paid under a quashed assessment is time-barred by limitation when filed years after the decree that quashed the assessment.
Ratio Decidendi:
Limitation begins to run from the date the cause of action arises, here January 1, 1968, and is not suspended by the mere pendency of an appeal; thus, the suit is barred.
Result:
Appeal dismissed; suit decreed by the trial court is not maintainable due to limitation.
ORDER
This appeal by special leave arises from the judgment and decree of the High Court dated January 4, 1974 made in A.S. No. 74 of 1976. The Division Bench of the High Court of Kerala had held that the limitation to lay the suit started to the appellants on January 1, 1968 when the High Court had earlier delivered the judgment quashing the assessment of agricultural income tax upon the estate of Raja Mananikraman and his estate is liable only to the extent of 1/693 share of that estate. The facts are not in dispute. The agricultural Income Tax Officer has made on assessment of the agricultural income tax to the tune of Rs. 84,788,78 for the period between 1.11.1956 to 31.3.1958. It is not necessary to dilate all the facts but suffice to state that for recovery thereof when demand was made, the succeeding Raja made payment in part discharging their liability. On October 12, 1960 a sum of Rs. 18069.75 was paid and another successor on December 23, 1960 paid a sum of Rs. 21,000/-. As stated earlier, ultimately in O.P. No. 2413/65 by judgment and order dated January 1, 1968, the High Court set aside the assessment and the liability to recover the tax was confined only to the extent of 1/693 share of the estate Raja Manavikraman.
2. The Civil Suit for recovery of the amounts paid by the successors was filed in 1974. The Suit (O.S. No. 197/74) was decreed by the trial court in 1976. But on appeal, as stated earlier, the Division Bench held that it was barred by limitation. Thus this appeal by special leave.
3. Shri A.S. Nambiar, the learned senior counsel appearing for the appellants contended that the appellants had discovered the mistake on October 5, 1971 when this Court dismissed the appeal filed by the State against the orders passed in O.P. 2413 of 1965 and that, therefore, the limitation begins to run from that date. Therefore, the suit was filed within three years and such was not beyond time. The High Court was wrong in holding that the suit was barred by limitation. We are unable to agree with the learned counsel. It is not in dispute that at his behest the assessment was quashed by the High Court in the aforesaid O.P. on January 1, 1968. Thereby the limitation started running from that date. Once the limitation starts running, it runs its full course until the running of the limitation is intradicted by an order of the Court. Section 3 of the Limitation Act gives a power of entertaining the suit which says that :
"Subject to the provisions contained in Section 4 to 24 (inclusive), every suit instituted, ........... after the prescribed period shall be dismissed although limitation has not been set up as a defence."
4. Therefore, if any period of limitation is to be excluded from the prescribed period of limitation, the party necessarily has to satisfy any of the appropriate provisions in Sections 4 to 24 of the Limitation Act, 1963. This is not one of such cases. Under those circumstances, the limitation having begun to run from January 1, 1968, it stood expired by efflux of time after three years. Therefore, from January 2, 1971, the right to recover stood barred by limitation. The pendency of the appeal, unless the operation of the judgment is suspended by this Court, does not amount to suspend the operation of running of the limitation. We do not find any such plea raised by the appellants in this case in that behalf. Therefore, the High Court was right in its finding that the suit was barred by limitation.
5. It is contended that in The Sales Tax Officer & Ors. v. Kanhaiya Lal Makund Lal Saraf & Ors. 1, that when the knowledge was acquired by the party for the first time before the judgment was rendered by this Court in previous litigation, the claim for refund would start from the judgment rendered by this Court. We do not have that fact situation in this case. The appellants is a party to the proceedings and at his instance the assessment of agricultural income tax was quashed as referred to hereinbefore and having had the assessment quashed the cause of action had arisen to him to lay the suit for refund unless it is refunded by the State. The knowledge of the mistake of law cannot be countenanced for extended time till the appeal was disposed of unless, as stated earlier, the operation of the judgment of the High Court in the previous proceedings were stayed by this Court. The suit, therefore, is barred by limitation.
6. The appeal is accordingly dismissed. No costs.
Appeal dismissed.
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