Full Judgment Text
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PETITIONER:
SHRI VALLABH GLASS WORKS LTD. & OTHERS
Vs.
RESPONDENT:
UNION OF INDIA & OTHERS
DATE OF JUDGMENT14/03/1984
BENCH:
VENKATARAMIAH, E.S. (J)
BENCH:
VENKATARAMIAH, E.S. (J)
MISRA, R.B. (J)
CITATION:
1984 AIR 971 1984 SCR (3) 180
1984 SCC (3) 362 1984 SCALE (1)480
CITATOR INFO :
R 1990 SC 313 (22)
RF 1990 SC 772 (31)
RF 1991 SC1676 (72)
ACT:
Constitution of India 1950, Article 226 Indian Contract
Act 1872, Section 72 Limitation Act 1963, Section 17(1)(c) &
Article 113.
Central Excise & Salt Act 1944, First Schedule, Item
23A(1) and Item 68.
Excise duty-Claim for refund of excess duty paid-
Jurisdiction of the High Court to order refund in a petition
under Article 226.
HEADNOTE:
Appellant No. 1 was a company engaged in the business
of manufacturing different types of glass, viz., figured
glass, wired glass, coloured figured glass, rolled glass and
coolex wired glass. The Central Excise Department had levied
and collected excise duty on the said goods on the basis
that they belonged to the category of ’sheet glass’ and were
therefore subject to payment of excise duty under Item
23A(1) of the First Schedule to the Central Excise and Salt
Act, 1944. On February 20, 1976, the appellants applied for
the refund of excess duty paid by them from October 1, 1963
upto the date of the application on the ground that the
items of glass in question could not be described as ’sheet
glass’ mentioned in Item 23A and that since they did not
fall under any of the Items ] to 67 in the First Schedule of
the Act they could only be subjected to levy of excise duty
under the residuary provision, Item 68. The Assistant
Collector of Central Excise rejected the claim for refund
and the appellants there-upon filed a Writ petition in the
High Court on September 28, 1976, but the same was withdrawn
as a Departmental Appeal filed by the appellants was pending
with the Collector. The said Departmental Appeal was however
later dismissed and this order was confirmed in the
appellants’ revision petition to the Government.
The appellants thereupon filed a Writ Petition in the
High Court and assailed the order. The High Court reversed
the decision of the departmental authorities and held that
the items of glass manufactured by the appellants did not
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fall within the scope of tariff Item 23A(I) of the First
Schedule but that they came within tariff Item 68 thereof,
liable to duty accordingly, and directed refund of excess
duty paid after February 20, 1976, on which date the dispute
was raised. The claim for refund of excess ’duty paid during
the period prior to February 20, 1976 was, however,
rejected.
In the appeal to this Court on the question: (I)
whether the appellants are resettled to claim refund of
excess excise duty paid prior to February 20,
181
1976 and whether they are entitled to claim refund of such
duty paid between A October 1, 1963 and February 20, 1976 or
during any shorter period, and (2) whether the appellants
are entitled to claim such refund in respect of all the
goods.
Allowing the appeal in part.
^
HELD: 1. (i) The excess amount paid by the appellants
would have become refundable by virtue of section 72 of the
Indian Contract Act if the appellants had filed a Suit
within the period of limitation. Section 1 1(1)(c) of the
Limitation Act, 1963 provides that where in the case of any
suit or application for which a period of limitation is
prescribed under that Act, the suit or application is for
relief from the consequences of a mistake, the period of
limitation shall not begin to run until the plaintiff or
applicant had discovered it or could have with reasonable
diligence discovered it. [186F-G]
(ii) Under Article 113 of the Limitation Act. 1963 a
suit for recovery of excess duty had to be filed within
three years from the date of payment to the Department.
[187B]
(iii) The High Courts have power, for the purpose of
enforcement of fundamental rights and statutory rights to
make consequential orders for repayment of money realised by
Government without the authority of law under Article 226 of
the Constitution. This is an alternative remedy provided by
the Constitution in addition to, but not in supersession of
the ordinary remedy by way of suit in the absence of any
provision which would bar such a suit expressly or by
necessary implication. While there are different periods of
limitation prescribed for the institution of different kinds
of suits by the Limitation Act. 1963, there is no such
period prescribed by law in respect of petitions filed under
Article 226 of the Constitution. Whether relief should be
granted to a petitioner under Article 226 where the cause of
action had arisen in the remote past is a matter of sound
judicial discretion governed by the doctrine of laches.
Where a petitioner who could have availed of the alternative
remedy by way of suit approaches the High Court under
Article 226, it is appropriate ordinarily to construe that
any unexplained delay in filing of the writ petition after
the expiry of the period of limitation prescribed for filing
a suit as unreasonable. This rule. however, cannot be a
rigid formula. Each case has to be judged on its own facts
and circumstances touching the conduct of the parties, the
change in situation, the prejudice which is likely to be
caused to the opposite party or to the general public.
[187D-H]
In the instant case, the appellant had made excess
payment on being assessed by the Department and such payment
cannot be treated as voluntary payment precluding them from
recovering the amounts. The appellants should in the facts
and circumstances of this case be deemed to have discovered
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the mistake on the date of making each payment of excise
duty in excess of the proper duty payable under law. All
such excess payments made on or after September 28, 1973
which would fall within the period of three years prior to
the date on which the first writ petition was filed should
have been ordered to be refunded under Article 226 But the
High Court declined to do so. Though
182
the appellant should not be granted any relief in respect of
payment made between October 1, 1963 and September 27, 1973
which would fall beyond the three years from the date of the
first writ petition, it is not proper and just to negative
the claim in respect of excess payments made after September
28, 1973.
Sales Tax officer, Banaras & Ors. v. Kanhaiya Lal
Mukundlal Saraf, [1959] S.C.R. 1350, referred to.
2. In respect of wired glass, a dispute has arisen
between the Department and the appellants earlier and in
that case while the Department claimed that wired glass was
subject to payment of duty under tariff Item 23A(4) the
appellants pleaded that wired glass was liable to duty under
tariff Item 23A(1). The Government of India ultimately
accepted the case of the appellants, . and duty was paid on
that basis till February 20, 1976. While the earlier order
may not be a legal bar to the contention raised by the
appellants on February 20, 1976 that wired glass was not
taxable under tariff Item 23A(l) but under tariff Item 68
after that date, it is certainly a circumstance which
disentitles the appellants to claim refund of excess duty
paid by them in a petition under Article 226. The claim for
refund of excess duty paid on wired glass during the period
prior to February 20, 1976 is therefore liable to rejected.
[185G-186C]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3338 of
1979
From the Judgment and order dated 22 and 23-11-78 of -
Gujarat High Court in Spl. Civil Application No. 577 of
1978.
Anil B. Divan, Ravinder Narain and Ms. Rainu Walia for
the appellants.
M. M. Abdul Khader, G. S. Narayan and A. Subhashini for
the respondents.
The Judgment of the Court Was delivered by
VENKATARAMIAH, J. This appeal by special leave is filed
against the judgment and order dated November 22/23, 1978 of
the High Court of Gujarat in Special Civil Application No. -
577 of 1978 filed under Article 226 of the Constitution.
Appellant No. I is a company which is engaged in the
business of manufacturing different types of glass viz.
figured glass wired glass, coloured figured glass, rolled
glass and coolex wired glass at Vallabh Vidyanagar in the
State of Gujarat from the year 1963. Appellant No. 2 is the
Managing Director of appellant No. t. The Central Excise
Department had levied and collected excise duty
183
On the said goods on the basis that they belonged to the
category of sheet glass and were therefore subject to
payment of excise duty under Item 23A (1) of the First
Schedule to the Central Excises and Salt Act, 1944
(hereinafter referred to as ’the Act’). On February 20,
1976, the appellants applied for the refund of excess duty
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paid by them from October 1, 1963 upto the date of the
application on the ground that the item of glass in question
were distinct commercial goods known in the market as
figured glass, wired glass, coloured figured glass, rolled
glass, coolex figured glass and coolex wired glass and could
not be described in common parlance as ’sheet glass’
mentioned in Item 23A and that since they did not fall under
any of the Items 1 to 67 in the First Schedule to the Act
they could only be subjected to levy of excise duty under
the residuary provision Item 68 in that Schedule after it
was inserted in it.
Item 23A of the First Schedule to the Act at all
material times read as.-
"23A. Glass and glassware-
(1) Sheet glass and plate Thirty per cent ad
glass valorem
(2) Laboratory glassware Ten per cent ad
valorem
(3) Glass shells, glass Fifteen per cent ad
globes and chimneys valorem
for lamps and lanterns
(4) other glassware inclu- Thirty per cent ad
ding tableware valorem."
The relevant part of tariff Item 68 which was
introduced from March 1, 1975 read as: .
"68. All other goods not one per cent ad
elsewhere specified, valorem
manufactured in a factory
but excluding
(a) alcohol, all sorts,
including alcoholic
liquors for human
consumption.
184
(b) opium, Indian hemp
and other narcotic
drugs and narcotics;
and
(c) dutiable goods as
defined in sections
2(c) of the Medici-
nal and Toilet
Preparations (Excise
Duties) Act, 1955."
After holding an enquiry and hearing the appellants,
the Assistant Collector of Central Excise, Anand rejected
the claim for refund by his order dated September 20, 1976
because he was of the view that the items of goods in
respect of which dispute had been raised fell within the
purview of tariff Item 23A (1). Against the said order of
the Assistant Collector the appellants filed a writ petition
in Special Civil Application No. 1365 of 1976. On the file
of the High Court on September 28, 1976. The said petition
was admitted but when it was taken up for Final hearing it
was contended on behalf of the Department that since the
appellants had also filed an appeal against the very same
order before the Collector of Central Excise they could not
pursue the remedy under Article 226 of the Constitution as
it stood then. In view of the above contention the writ
petition was withdrawn without prejudice to the remedy by
way of appeal. The appeal was thereafter disposed of by the
Collector on July 27, 1977 affirming the order of. the
Assistant Collector. A revision petition filed by the
appellants against the order of the Collector was dismissed
by the Government of India by its order dated February 2,
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1978. The said order in revision was challenged before tile
High Court by the appellants under Article 226 of the
Constitution. The High Court by its judgment under appeal
reversed the decision of the departmental authorities which
had, been affirmed by the Central Government and held that
the items of glass manufactured by the appellants namely,
figured glass, wired glass, coloured figured glass, rolled
glass and coolex wired glass did not . fall within the scope
of tariff Item 23A(1) of the First Schedule to the Act as it
stood at the material time but they came within tariff Item
68 and were liable to bear duty accordingly. The High Court
was, however, of the view that the appellants were only
entitled to refund of excess duty paid by them after
February 20,
185
1976 on which date they raised the dispute. Accordingly the
High A Court issued a writ quashing the decision of the
Department in so far as the classification of the goods was
concerned and declaring that they were subject to payment of
duty under tariff Item 68 of the First Schedule to the Act
aud not under tariff Item 23A(1) thereof. The Department was
further directed to review the relevant assessments
accordingly for the period subsequent to February 20, 1976
and to refund any excess duty that might after such review
be found to be refundable to the appellants. The claim of
the appellants for refund of excess duty paid during the
period prior to February 20, 1976 was, however, rejected.
The appellants have filed this appeal by-special leave only
as regards the rejection by the High Court of their prayer
for refund of excess- duty paid by them prior to February
20, 1976.
The Department has not filed any appeal against the
judgment of the High Court. Hence the decision that the
goods were taxable under tariff Item 68 and not under tariff
Item 23A(1) of the First Schedule to the Act has become
final. Item 23A(1) is also stated to have been since amended
suitably so as to bring the items of glass in dispute within
its scope.
The question which arise for consideration in this
appeal are therefore (I) whether the appellants are entitled
to claim refund of - excess excise duty which had-been paid
by them prior of February 20, 1976 and if so, whether they
are entitled to claim refund of such duty paid between
October l, ;963 and February 20,1976 or during any shorter
period and (2) whether the appellants are entitled to claim
such refund in respect of all the goods in question. F
Since it is convenient to dispose of the second
question at this stage, we shall take it up first. A few
more facts which are relevant to this issue have to be
stated here. As mentioned earlier the goods in respect of
which dispute had been raised by the appellants in their
application dated February 20, 1976 were figured glass,
wired glass, coloured figured glass, rolled glass and coolex
wired glass. But it is seen that in respect of wired glass,
a dispute had arisen between the Department and the
appellants earlier and in that case while the Department
claimed that wired glass was subject to payment of duty
under tariff Item 23A(4) the appellants pleaded that wired
glass was liable to duty under tariff Item 23A(1). The
Government of India ultimately by its order dated August 24,
1971 (in order No. 261 of 1971 of the Government of India on
186
Central Excise Revision Application accepted the case of the
appellants that wired glass was subject to duty wader tariff
Item 23A - (1) and the appellants paid duty on that basis
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till February 20, 1976. These facts distinguish the case in
respect of wired glass from the case in respect of the other
goods While the said earlier order may not be a legal bar to
the contention raised by the appellants on February 20, 1976
that wired glass was not taxable under tariff Item 23A(1)
but under tariff Item 68 after that date, it is certainly a
circumstance which disentitles the appellants to claim
refund of excess duty paid by them in a petition under
Article 226 of the Constitution on a ground contrary to
their earlier stand. The claim for refund of excess duty
paid on wired glass during the period prior to February 20,
1976 is liable to be rejected. The appeal of the appellants
to that extent should, therefore, fall.
In regard to the relief of refund of excess duty paid
in respect of the other goods, the case stands on an
entirely different footing. This is a case where the
Department had assessed the duty payable by the appellants
under a wrong provision. The appellants were obliged to pay
the duty so assessed. They did not, no doubt, question the
assessments by taking a specific stand as they had done
earlier in the case of wired glass. The appellants, however,
questioned the validity of the levy only on February 20,
1976 on the ground that tariff Item 23A (1) of the First
Schedule to the Act under which the duty has been levied was
not applicable to tile goods. While the Department refused
to accept the said plea, the High Court has upheld it. In
view of the decision of the High Court, the fact that the
appellant had paid duty in excess of what they were bound in
P law to pay should be now taken as having been established.
It is. not disputed that if the appellants had filed a suit
within the period of limitation the excess amount would have
become refundable by virtue of section 72 of the Indian
Contract Act. Section 17(1)(c) of - the Limitation Act, 1963
provides that where in the case of any suit or application
for which a period of limitation is prescribed under that
Act, the suit or application is for relief from the
consequence of a mistake, the period of limitation shall not
begin to run until the plaintiff or applicant had discovered
it or could have with reasonable diligence discovered it. In
the instant case the date on which the mistake was
discovered by the appellants or the date on which the
appellants could with reasonable diligence have discovered
it is not clear from the record before us. No efforts also
was made in the course of the arguments urged on behalf of
the appellants to establish it. We have, therefore, to
assume that on the date
187
each payment of excise duty made by the appellants in excess
of the proper duty payable by them, the appellants could
have discovered with due diligence that the duty claimed
from them was excessive. Under Article 113 of the Limitation
Act, 1963 which is applicable to this case, a suit for
recovery of such excess duty had to be filed within three
years from the date of payment to the Department. But the
appellants instead of filing a suit, first filed a writ
petition in Special Civil Application No. 1365 of 1976 on
September 28, 1976 and that petition had to be withdrawn in
view of clause (3) of Article 226 of the Constitution as it
stood then because the alternative remedy by way of an
appeal was available. The appellants could, therefore, file
the writ petition out of which the appeal arises only after
the disposal of the revision petition by the Government of
India as mentioned earlier. lt is not disputed that the High
Courts have power, for the purpose of enforcement of
fundamental rights and statutory rights, to make
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consequential orders for repayment of money realised by the
Government without the authority of law under Article 226 of
the Constitution. This is an alternative remedy provided by
the Constitution in additional to but not in supersession of
the ordinary remedy by way of suit in the absence of any
provision which would bar such a suit either expressly or by
necessary implication. While there are different periods of
limitation prescribed for the institution of different kinds
of suits by the limitation Act, 1963, there is no such
period prescribed by law in respect of petitions filed under
Article 226 of the Constitution. Whether relief should be
granted to a . petitioner under Article 226 of the
Constitution where the cause of action had arisen in the
remote past is a matter of sound judicial discretion
governed by the doctrine of laches. Where a petitioner who
could have availed of the alternative remedy by way of suit
approaches the High Court under Article 226 of the
Constitution, i. is appropriate ordinarily to construe that
any unexplained delay in the filing of the writ petition
after the expiry of the period of limitation prescribed for
filing a suit as unreasonable. This rule, however, cannot be
a rigid formula. There may be cases where even a delay of a
shorter period may be considered to be sufficient to refuse
relief in a petition under Article 226 of the Constitution.
There may also be cases where there may be circumstances
which may persuade the court to grant relief even though the
petition may have been filed beyond the period of limitation
prescribed for a suit. Each case has to judged on its own
facts and circumstance touching the conduct of the parties,
the change in situation, the prejudice which is likely to be
caused to the opposite party or to the general public etc.
In the instant case, the appellants
188
had in fact approached the High Court on September 28, 1976
itself by filing Special Civil Application No. 1365 of 1976
for directing repayment of the excess duty paid by them. But
no relief could be granted in that petition in view of the
provisions of Article 226 of the Constitution as it stood
then and the petition had to be withdrawn. Hence even
granting that on the date of making each payment of excise
duty in excess of the proper duty payable under law, the
appellants should be deemed to have discovered the mistake,
all such excess payments made on and after September 28,
1973 which would fall within the period of three years prior
to the date on which Special Civil Application No. 1365 of
1976 was filed should have been ordered to be refunded under
Article 226 of the Constitution. But the High Court declined
to do so on grounds of estoppel and acquiescence. While we
do agree that the appellants should not be granted any
relief in respect of payment made between October 1, 1963
and September 27, 1973 which would fall beyond three years
from the date of the first writ petition filed in this case
we do not find it proper and just to negative the claim of
the appellants in respect of excess payments made after
September 28, 1973. In the instant case the appellants had
made excess payments on being assessed by the Department and
such payments cannot be treated as voluntary payments
precluding them from recovering them. (See Sales Tax
officer, Banaras & Ors. v. Kanhaiya Lal Mukundlal Saraf. We
do not also find that the conduct of the appellants is of
such a nature as would disentitle them to claim refund of
excess payments made in respect of goods other than wired
glass.
We, therefore, modify the judgment and order passed by
the High Court by quashing the assessments of excise duty
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made in respect of the goods in question other than wired
glass viz. figured glass, coloured figured glass, rolled
glass and coolex wired glass for the period between
September 28, 1973 and February 20, 1976 also and directing
the assessing authority to make a fresh assessment in
accordance with law in the light of the decision of the High
Court. a The respondents are further directed to refund
after such fresh determination any excess duty that may be
found to have been paid by the appellants. The fresh
assessments shall be completed
189
within four months from today. The appeal is, however,
dismissed in A so far it relates to the claim for refund of
excess duty paid in respect of wired glass during that
period.
The appeal is accordingly allowed in part. No costs.
N.V.K. Appeal partly allowed.
190