1968 JTR(Ori) 117
1969 AIR(Ori) 180 ; 1969 ILR(Cut) 969 ; 1969 KHC 4948
HIGH COURT OF ORISSA
S. Barman, C. J. And S. Acharya, J.
M. ABDUL HASSAN - Appellant
Versus
STATE OF ORISSA - Respondent
O. J. C 234 Of 1967
Decided On : OCTOBER 25, 1968
The High Courts have the power to order refund of money realised by the Government without the authority of law, even in the absence of a specific provision in the relevant statute.
Act
Referred
:BIHAR AND ORISSA EXCISE ACT : S.27
CONSTITUTION OF INDIA : Art.226
LIMITATION ACT : Art.96
REFUND OF COUNTERVAILING DUTY - LIMITATION - WRIT JURISDICTION - POWER OF HIGH COURT TO ORDER REFUND OF MONEY REALISED BY GOVERNMENT WITHOUT AUTHORITY OF LAW - Bihar and Orissa Excise Act (Act 2 of 1915), Section 27 - Limitation Act, 1908, Article 96 - Constitution of India, Article 226.
Fact of the Case:
The petitioners, dealers in excisable commodities including foreign liquor, challenged the legality of a notification issued under Section 27 of the Bihar and Orissa Excise Act, 1915, which enhanced the duty on foreign liquor by Rs. 30-00 per L. P. gallon. The Supreme Court, in Kalyani Stores v. State of Orissa, declared the notification unenforceable. The petitioners sought a writ of mandamus for refund of the countervailing duty illegally collected under the notification.
Finding of the Court:
The court held that the petitioners' claim for refund was not barred by limitation as it was filed within three years from the date of knowledge of the mistake, as prescribed under the Limitation Act. The court also held that the writ jurisdiction could be invoked to enforce the petitioners' right to refund, as the Act did not provide for refund of tax and the petitioners had no other effective remedy.
Issues: 1. Whether the petitioners' claim for refund was barred by limitation? 2. Whether a writ of mandamus could be issued for refund of countervailing duty illegally collected?
Ratio Decidendi: 1. The court held that the petitioners' claim for refund was not barred by limitation as it was filed within three years from the date of knowledge of the mistake, as prescribed under Article 96 of the Limitation Act, 1908. 2. The court held that a writ of mandamus could be issued for refund of countervailing duty illegally collected, as the Act did not provide for refund of tax and the petitioners had no other effective remedy. The court relied on the Supreme Court decisions in State of Kerala v. Aluminium Industries Ltd. and State of Madhya Pradesh v. Bhailal Bhai, which held that the High Courts have the power to give consequential relief by ordering repayment of money realised by the Government without the authority of law.
Final Decision: The court allowed the petitions and directed the opposite parties to refund the countervailing duty illegally collected from the petitioners within one month from the receipt of the orders passed.
REFUND OF COUNTERVAILING DUTY - LIMITATION - WRIT JURISDICTION - POWER OF HIGH COURT TO ORDER REFUND OF MONEY REALISED BY GOVERNMENT WITHOUT AUTHORITY OF LAW - Bihar and Orissa Excise Act (Act 2 of 1915), Section 27 - Limitation Act, 1908, Article 96 - Constitution of India, Article 226.
Fact of the Case:
The petitioners, dealers in excisable commodities including foreign liquor, challenged the legality of a notification issued under Section 27 of the Bihar and Orissa Excise Act, 1915, which enhanced the duty on foreign liquor by Rs. 30-00 per L. P. gallon. The Supreme Court, in Kalyani Stores v. State of Orissa, declared the notification unenforceable. The petitioners sought a writ of mandamus for refund of the countervailing duty illegally collected under the notification.
Finding of the Court:
The court held that the petitioners' claim for refund was not barred by limitation as it was filed within three years from the date of knowledge of the mistake, as prescribed under the Limitation Act. The court also held that the writ jurisdiction could be invoked to enforce the petitioners' right to refund, as the Act did not provide for refund of tax and the petitioners had no other effective remedy.
Issues: 1. Whether the petitioners' claim for refund was barred by limitation? 2. Whether a writ of mandamus could be issued for refund of countervailing duty illegally collected?
Ratio Decidendi: 1. The court held that the petitioners' claim for refund was not barred by limitation as it was filed within three years from the date of knowledge of the mistake, as prescribed under Article 96 of the Limitation Act, 1908. 2. The court held that a writ of mandamus could be issued for refund of countervailing duty illegally collected, as the Act did not provide for refund of tax and the petitioners had no other effective remedy. The court relied on the Supreme Court decisions in State of Kerala v. Aluminium Industries Ltd. and State of Madhya Pradesh v. Bhailal Bhai, which held that the High Courts have the power to give consequential relief by ordering repayment of money realised by the Government without the authority of law.
Final Decision: The court allowed the petitions and directed the opposite parties to refund the countervailing duty illegally collected from the petitioners within one month from the receipt of the orders passed.
R.K.Kar, R.KAR, R.Sharma, RANJIT MOHANTY
BARMAN, C. J.
( 1 ) THE petitioners in these writ petitions are dealers in excisable commodities inter alia foreign liquor. The point which arises in these writ petitions is whether a writ of mandamus can be issued for refund of countervailing duty illegally -- by mistake -- collected by a notification under Section 27 of the Bihar and Orissa excise Act (Act 2 of 1915 hereinafter referred to as the Act) dated March 31, 1961.
( 2 ) THESE cases arise out of the decision of the Supreme Court in Kalyani Stores v. Stale of Orissa, AIR 1966 SC 1686 decided on September 21, 1965 where their lordships of the Supreme Court, on an interpretation of the relevant provisions of the Bihar and Orissa Excise Act, declared that the said notification enhancing the duty on foreign liquor by Rs. 30-00 per L. P. gallon was unenforceable. These writ petitions were filed in the month of August 1967 for refund of the countervailing duty illegally collected from the petitioners obviously under a mistake.
( 3 ) THE first question is: Is the petitioners' claim for refund barred by limitation? article 96 of the Limitation Act, 1908 corresponding to Section 17 of the present limitation Act prescribes as period of limitation of three years for relief on the ground of mistake when the mistake became known to the plaintiff. On the question as to when the petitioners came to know of the mistake in the present case, it is stated that they came to know of the mistake when the decision of the supreme Court in AIR 1966 SC 1686 was pronounced by the Supreme Court on september 21, 1965. The present petitions were filed on various dales in the month of August 1967, that is within three years from the date of knowledge and therefore they are clearly within time as prescribed under the Limitation Act. This view is supported bv the decision in K. S. Venkatara-man and Co. . (P.) Ltd. v. State of Madras, (1966) 17 STC 418. at pp. 441-442: (AIR 1966 SC 1089 at p. 1101 ).
( 4 ) IT was urged on behalf of the opposite parties that the applications for refund are not maintainable; that the writ jurisdiction cannot be invoked as under the Act there is no duty to refund; that there is no case for grant of ancillary relief. Their point is that simple money claims cannot he enforced in writ jurisdiction, and that there is no provision in the Act for refund of tax. It was argued that the petitioners should have filed a suit in the Civil Court for recovery of the money staled to have been illegally retained by the State.
( 5 ) THESE arguments lose their force in view of the settled position in law as laid down in by the Supreme Court in State of Kerala v. Aluminium Industries Ltd. (1965) 16 STC 689 (SC) and in the Slate of Madhya Pradesh v. Bhailal Bhai, AIR 19g4 SC 1006, 1010. The question arose whether the relief of repayment hag to be sought by the tax-payer by action in a Civil Court or whether such an order can be made by the High Court in exercise of its jurisdiction under Article 226 of the constitution. What their Lordships held was this:
"the jurisdiction conferred by Article 226 is in very wide terms. This article empowers the High Court to give relief by way of enforcement of fundamental rights and other rights by issuing directions, orders or writs including writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari. According to the petitioners a writ in the nature of mandamus can be appropriately used where money has been paid to Government by a mistake, to give relief by commanding repayment of the same. That in a number of cases the High Courts have used the writ of mandamus to enforce repayments is not disputed. "
For the reasons as discussed in their judgment, the Supreme Court expressed the opinion that the High Courts have the power for the enforcement of statutory rights and fundamental rights under the Constitution, to give consequential relief by ordering repayment of money realised by the Government without the authority of law.
( 6 ) THE same view was also reiterated by the Supreme Court in a very recent case gill and Co. (P) Ltd. v. Commercial Tax Officer, (Civil Appeals Nos. 1580 to 1595 of 1967 D/- 9-2-1968.) (See 1968 SC (Notes) 80 ). There, it has been held that where tax is levied by mistake of law it is ordinarily the duty of the State, subject to any provision of the law relating to sales tax to refund the tax. If refund is not made, remedy through court is open, subject to the same restrictions and also to the period of limitation, namely three years from the date when the mistake had become known to the person who has made the payment by mistake.
( 7 ) IN this view of the cases, the petitions are allowed. The opposite parties are directed to refund the countervailing duty illegally collected from the petitioners. The appropriate authorities are directed to assess the amount and refund the same to the petitioners accordingly, within one month from the receipt of the orders passed herein. The petitioners are entitled to consolidated set of costs. Hearing fee Rs. 100/- (Rupees one hundred only ). 8. Acharya, J.
( 8 ) I agree.