Full Judgment Text
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PETITIONER:
THE DEPUTY COMMISSIONER, ANDAMAN DISTRICT, PORT BLAIR.
Vs.
RESPONDENT:
CONSUMER CO-OPERATIVE STORES LIMITED., HARI NARAYAN ARORA.
DATE OF JUDGMENT: 09/12/1998
BENCH:
Sujata V. Manohar, G.B. Pattanaik.
JUDGMENT:
PATTANAIK. J.
The these appeals the Judgment of the Division Bench
of Calcutta High Court 31st of January, 1994 is under
challenge and the question for consideration is whether in
view of Andaman & Nicobar Islands (Amendment) Regulation,
1984 the respondents are entitled to claim refund of the
excise duty levied and paid. The further question which
arises for consideration is whether by application of the
principle of ’unjust enrichment’ the said respondents can be
denied of getting the refund in question.
The respondents had obtained licence to vend Indian
made foreign liquor on the basis of a public auction. The
Chief Commissioner of Andaman & Nicobar Islands issued a
notification purporting to be one in exercise of powers
conferred under Rule 29 of Andaman Excise Rules, 1934
prescribing the rate of excise duty payable by the
licensees-respondent on such Indian made foreign liquor. A
licensee, Jagannath of Middle Point, Port Blair filed a writ
petition challenging the aforesaid notification and the
notification was held to be invalid as the Chief
Commissioner had no power to levy the excise duty in
question. Against the Judgment of the learned Single Judge,
an appeal was preferred to the Division Bench but the said
appeal was dismissed and the Judgment of the Single Judge
was confirmed. The Excise Authorities did raise a
contention before the Division Bench of the High Court that
the licensees have realised the amount from the customers
and as such should not get the refund in question but the
said contention was negatived by the High Court. After the
appeal was dismissed, the amount realised from said licensee
Jaganath was refunded. In view of the aforesaid Judgment of
the Division Bench of Calcutta High Court the other
licensees also applied for refund to the Excise Authorities
but as no action was taken thereon, writ petitions were
filed. Those writ petitions were disposed of with a
direction to the Excise Authorities to pass final orders on
the application for refund. The Excise Authorities then
took steps for refunding the amount collected after
complying with the formalities but before the refund
vouchers could be finally signed, a notification was issued
on 1st of September, 1984 by the president of India,
promulgating the Andaman & Nicobar Islands (Amendment)
Regulation 1984, authorising imposition of excise duty
w.e.f. 24th of October, 1973 on Indian made foreign liquor
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notwithstanding any judgment, decree or order of any court.
In view of the aforesaid amendment of the Excise Regulation,
the Excise Authorities of Andaman & Nicobar Islands rejected
the prayer for refund of the duty and the respondents then
moved the High Court in writ petitions challenging the
legality of the amended provision and seeking a writ of
mandamus to the appellant to refund the alleged illegal levy
collected by the Excise Authorities. The Division Bench of
the Calcutta High Court by the impugned judgment came to
hold that Section 31A of the Andaman & Nicobar Islands
(Amendment) Regulation, 1984 is ultra vires and Section 6(1)
and 6(2) of the Regulation are also invalid. On the
question of applicability of the principle of unjust
enrichment the high Court came to the conclusion that there
is absolutely no materials to show whether the excise duty
that was paid in advance was consumed by the dealers by
their margin of profits or not and it is nobody’s case that
the excise duty was recovered as such from the purchaser by
the wine merchants. Consequently, the principle of unjust
enrichment has no application. With these conclusions, writ
applications were allowed with the direction that the amount
collected as excise duty from the licensees be refunded.
Mr. Nambiar, the learned Senior Counsel, appearing
for the appellants contended that in view of Section 31A of
the Amendment Regulation, 1984, the excise duty which have
been collected can be held to be a special duty under the
amended provisions and in view of the non obstante clause in
Section 6 of the Amendment Regulation, notwithstanding the
earlier judgment of the High Court striking down the
notification dated 24th of October, 1973, the duty which had
been collected can be held to be a valid levy as special
duty under Section 31A and, therefore, the Excise
Authorities had rightly refused the refund application and
High Court committed error in allowing the Writ Petition.
Though the learned counsel had raised the aforesaid
contention while beginning his arguments but later on did
not pursue the same being faced with the problem that
subsequent to insertion of Section 31A, no notification has
been issued by the Administrator in the Andaman & Nicobar
Islands Gazette, specifying the levy of special duty. Since
issuance of a notification by the Administrator in the
Andaman & Nicobar Islands Gazette is a pre-condition for
making any levy under Section 31A and the said pre-conditon
has not been satisfied, Mr. Nambiar, the learned Senior
Counsel, did not pursue his argument that the levy in
question can be held to be a valid levy as special duty
contemplated under Section 31A of the Amended Regulation of
1984.
Mr. Nambiar, the learned Senior Counsel, however
vehemently argued that even if the levy can be held to be
not authorised by law but the same having been collected,
the licensees are not entitled to refund of the same and the
said relief can be rejected by applying the principle of
unjust enrichment. In support of his contention he placed
reliance on the decision of this Court in State of Madhya
Pradesh v. Vyankatial and Anr. 1985(2)SCC 544 and the
Constitution Bench decision of this Court in Mafatlal
Industries Ltd., vs. Union of India 1997(5)SCC 536. In the
first case the Court held that the burden of paying the
amount in question was transferred by the respondents to the
purchasers and, therefore, the respondents were not entitled
to get refund and only the persons on whom lay the ultimate
burden to pay the amount would be entitled to get a refund
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of the same. In the aforesaid case under the Madhya Bharat
Sugar Control Order, 1949, the supply price of sugar had
been fixed higher than its ex-factory price and the sugar
factories were directed to credit the difference to a fund
called "sugar fund". the validity of the said notification
could not be sustained in the Supreme Court but all the same
no refund was allowed on the finding that the burden in
question had been transferred to the purchasers. In
Mafatlal’s case 1997(5) SCC 356, the majority judgment
dealing with the question of unjust enrichment held :
"The doctrine of unjust
enrichment is a just and salutary
doctrine. No person can seek to collect
the duty from both ends. In other words,
he cannot collect the duty from his
purchaser at one end and also collect the
same duty from the State on the ground
that it has been collected from him
contrary to law. The power of the Court is
not meant to be exercised for unjustly
enriching a person."
The principles underlying the doctrine of ’unjust
enrichment’ as culled out from the aforesaid two decisions
will have no application to the case in hand, in view of the
findings arrived at by the High Court on consideration of
the entire materials on record that it is nobody’s case that
the excise duty was recovered from the purchaser by the wine
merchants. Since the burden has not been passed on to the
purchaser as found by the High Court and the levy having
been held to be unconstitutional, the State would not be
entitled to resist the claim of refund by application of
doctrine of ’unjust enrichment’. We, therefore, do not find
any infirmity with the directions of the High Court to
refund the illegal levy collected from the respondents.
’The appeals accordingly fail and are dismissed, but in the
circumstances of the case, there will be no order as to
costs.
It was submitted before us that the entire amount
has been deposited in Court. If that be so, the
respondents-licensees will be entitled to receive the amount
from the High Court.