Sudhir Ranjan Roy, J.
1. These two Rules arising out of two different Writ petitions filed by the same petitioner, namely, Dayapara Tea Company Ltd. are taken up for analogous hearing and disposal since they involve common question of fact and law and this common judgment will govern both the Rules. For convenience it may be sufficient to lay down the facts only of C.R. No.4167(W) of 1979.
2. The petitioner which is a company registered under the Indian Companies Act, is a manufacturer of Vanaspati and Soap, both excisable commodities.
3. By Notification No. 144/68-C.E. dated 13-7-1968, as amended by Notification No. 27/73 dated 1-7-1973, the Central Govt. exempted from whole of excise duty the first fifty tonnes of household and laundry soap and first twentyfive tonnes of toilet, monopola or textile soap, cleared for home consumption on or after the first day of April in any financial year by any manufacturer whose total production of soap in the preceding financial year did not exceed 500 tonnes.
4. The petitioner Company is covered by the self removal procedure under Rules 173A to 173Q of the Central Excise Rules under which it is required to assess the duty payable and on payment of duty so assessed can remove the goods under Rule 9 of the said Rules.
5. Since, during the financial year 1971-72, the petitioner produced only 391.764 metric tonnes of soap, it was not liable to pay any excise duty on the first 50 tonnes of soap produced and/or manufactured during the succeeding financial years beginning from 1st April, 1972, in view of the exemption notification. But without being aware of such notification the petitioner during the Financial year; 1971-73 paid excise duty on the total production of soap.
6. That it was only on receipt of a letter from the office of the Accountant General (Central) dated 7th August, 1974 (Annexure 'C') directing the petitioner to let them know whether any claim for refund of duty had been preferred by it, that the petitioner came to know an enquiry about the exemption notification.
8. Thereafter, on 7-12-1974 the petitioner filed an application for refund of the excise duty paid by mistake for the period from 13-11-1972 to 11-1-1973 (Annexure 'D') under Rule 11 of the Central Excise Rules read with the Board's Circular dated 20-4-1959' providing inter-alia that if payment is made in respect of goods which in fact are not excisable goods, such payment under mistake is liable to be refunded by the Government within three years from the date the mistake becomes known to the party under Article 96 of the Limitation Act. Limitation of three months would not apply in such a case.
9. This claim for refund was, however, rejected by the Assistant Collector, Central Excise on the ground of the claim being time-barred as not made within the period of limitation as prescribed by Rule 11.
10. An appeal preferred by the petitioner against the said order under Section 35 of the Central Excise Act having been proved to be abortive, the petitioner moved up in Revision under Section 36 of the Act before the Govt. of India but without success.
11. As such, the petitioner has come up before this Court for redress under Article 226 of the Constitution of India.
12. In their Affidavit-in-opposition the respondents, besides controverting the material averments made in the Writ petition, have alleged that the payment in question having been made by the petitioner on account of ignorance due to inadvertance or error and not on account of any erroneous demand made by the Excise Officials, Rule 11 of the Central Excise Rules was rightly applied by the concerned authorities and the petitioner's claim was rightly rejected as barred by limitation as provided by the said Rule. And that being so, the petitioner is not entitled to any relief from this Court.
13. Mr. Bhattacharjee, the Learned Counsel representing the petitioner, contended inter-alia that Rule 11 can have no application in the instant case since the payment of the excess duty was not made due to any error, inadvertence and/or mis-construction. According to him the authorities should have held that the petitioner's claim for refund was covered by Section 72 of the Contract Act and the Board's Circular dated 2-4-1959 and the period of limitation was not three months but three years from the date of knowledge as provided by the Limitation Act.
14. On the other hand, the contention of Mr. Roy Chowdhury, the learned counsel for the respondents was that in view of the facts and circumstances of the case, the Excise authorities were quite justified in applying the period of limitation as provided by Rule 11 and consequently, this Court exercising Writ jurisdiction, should not exercise its discretionary powers in favour of the petitioner. It was further contended by him that the petitioner having already passed on the excess duty paid to the customers and ultimately to the members of the public, the Writ Court as a Court of equity would be reluctant to direct refund of the duty to the petitioner, on the ground of unjust enrichment.
15. Now, before examining the rival contentions of the parties, it may be useful to refer to Rule 11 of the Central Excise Rules, as it stood at the material time. It is as hereunder :
'No duties or charges which have been paid or have been adjusted in account current maintained with the Collector under Rule 9, and of which repayment wholly or in part is claimed in consequence of the same having been paid through inadvertence, error or misconstruction, shall be refunded unless the claimant makes an application for such refund under his signature and lodges it with the proper officer within three months from the date of such payment or adjustment, as the case may be.'
According to this rule as it stood, refund of duty paid through inadvertence, error or mis-construction could be claimed only by filing an application with the proper officer. Limitation provided for making such claim was three months from the date of such payment (extended to one year under the old Rule 173-H, since omitted).
16. So far the instant case is concerned, it may be recalled that the petitioner was covered by the Self-Removal Procedure and could remove the excisable goods on payment of duty self-assessed.
17. So, here is not a case where any duty was illegally or erroneously demanded and realised by the excise authorities. It is a case of payment of excise duty without knowledge that under an exemption notification a part of the goods was exempted from payment of excise duty.
18. It now seems to be well-settled that when tax is paid where it is not payable under the law, it is regarded as a payment under a mistake.
19. In Black's Law Dictionary (Fifth edition) at page 903, 'Mistake' has been defined as 'some unintentional act, omission or error arising from ignorance....'
20. And here also it is a case of error arising out of ignorance about the existence of the exemption notifications.
21. Rule 11 as such, as it stood prior to 6-8-1977, was very much attracted to the petitioner's claim for refund. And it is not disputed that such claim was filed beyond the period of one year from the date of payment.
22. In Shri Vallabh Glass Works Ltd. v. Union of India, : [1985]155ITR560(SC) , one of the questions that came up for consideration before the Supreme Court was whether the High Courts have power to order repayment of money realised by the Government without the authority of law under Article 226 of the Constitution. And the Court observed that the remedy under Article 226 is an alternative remedy provided by the Constitution in addition 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.
23. It may be mentioned here that such a bar has since been expressly imposed by Section 11B of the Central Excise Act, with effect from 17-11-1980 when Rule 11 was omitted.
24. But though Rule 11 as it stood, did not provide any express or implied bar for such suit, it undoubtedly provided a specific remedy for refund of part or whole of the excise duty paid through error, inadvertence or mis-construction and also provided a specific period of limitation for preferring such claims for refund.
25. The question which, therefore, stares large is that whether in such a situation it could be said that the ordinary remedy for recovery of such amount was by way of suit for which the period of limitation under the Limitation Act is three years.
26. In Patel India Ltd. v. Union of India, : AIR1973SC1300 , the excise duty in respect of which refund was claimed, was demanded by the Customs Authority on the ground that the invoice price did not represent the real value of the imported goods and payment was made under protest. Refund of such duty was thereafter claimed under Section 40 of the Sea Customs Act, 1878 which, as in'' Rule 11 of the Central Excise Act provided for refund of Customs duty paid through inadvertence, error or mis-construction. The Supreme Court held that since the claim of the assessee was not based on any such ground, Section 40 of the Act did not have any manner of application to such claim and consequently the claim could not be rejected as barred by limitation under that section. And that being so, the Customs authority was under legal obligation to refund the excise duty since such authority was not entitled to retain the excise duty without legal authority.
27. It seems, therefore, that had Section 40 of the Sea Customs Act applied to the facts of the case, the claim for refund might have been found to have been rightly rejected as barred by limitation under that section.
28. In Madras Port Trust v. Hymanshu International, 1979 ELT (J 396) the only question that arose in appeal by special leave before the Supreme Court was whether the claim of the respondent for refund of the amount of wharfage, demurrage and transit charges paid to the appellant was barred by Section 110 of the Madras Port Trust Act. In that connection the Supreme Court while observing that it was high time that Governments and public authorities adopted the practice of not relying upon technical pleas for defeating legitimate claims of citizens and did what was fair and just; made it clear that if a Government or a public authority took up a technical plea, the Court had to decide it and if the plea was well-founded, it had to be upheld by the Court.
29. The Supreme Court, therefore, in its earlier decisions did not express itself in favour of granting claims for refund by ignoring totally the mandates of the special statutes.
30. However, in its later decision in Shiv Shankar Dal Mills v. State of Haryana, : [1980]1SCR1170 , the Supreme Court did not even enter into the question as to what the period of limitation is and whether Article 226 of the Constitution will apply in such matters or not, since public bodies recovering people's money under colour of public laws, later discovered to be erroneous levies, were duty bound to return the same and that there is no law of limitation especially for public bodies, on the virtue of returning what was wrongly recovered.
31. In a way, therefore, this decision ignores the earlier decisions of the Court including thsoe trying to fix a period of limitation of three years.
32. Particular reference in this connection may be made to the five-judge Bench decision of the Supreme Court in Triloki Chand Moti-chand v. K.B, Munshi, : [1969]2SCR824 , where it was held that the High Court acts on the analogy of the statute of limitation in a proceeding under Article 226 though the statute may not apply to the proceeding.
32. An identical question came up for consideration before a Division Bench of this Court in Khardah Company Ltd. v. Union of India, 1983 ELT 2159 (Cal.).
33. There also the petitioner's claim for refund of excess excise duty was rejected by the Excise Authority solely on the ground of limitation as provided by Rule 11 of the Central Excise Rules. The Court after having duly considered the scope and amplitude of Rule 11 held that it could not be said in view of the facts and circumstances of the case that the petitioner had paid the excise duty through inadvertence, error or mis-construction.
34. The Court in this connection viewed the matter from another angle, that is, from the view point of propriety. In support thereof reference was made to the following observations of the Supreme Court in Aluminium Corporation of India Ltd. v. Union of India, : 1978(2)ELT452(SC) . :
'To return what has been taken wrongly is as much a duty and grace of the Government as to levy relentlessly and fully what is due. Default in either, not altogether, unfamiliar brings down the confidence of the community in the administration.'
35. Reference was also made in this connection to the decision of the Supreme Court in Shiv Shankar Dal Mills v. State of Haryana (Supra).
36. The Court, in the circumstances, allowed the petitioner's claim for refund under Article 226 of the Constitution.
37. Mr. Roy Chowdhury, in this connection referred to a subsequent Bench decision of this Court in Inchek Tyres Ltd. v. Assistant Collector of Customs, : 1986ECR141(Calcutta) . There the petitioner's claim for refund of excess duty of customs under Section 27(1) of the Customs Act, was rejected by the customs authorities on the sole ground of the claim being barred by limitation. After moving unsuccessfully the Appellate and the Revisional authorities under the statute against the said order of rejection, the petitioner came up before this Court under Article 226 of the Constitution. A learned single Judge having refused to interfere in the matter, the petitioner moved up in appeal before a Division Bench, where reliance was placed mainly upon the decision of the Supreme Court in Patel India Ltd. v. Union of India (Supra) but it was distinguished on the ground that the proceeding before the Supreme Court arose out of an application made under Section 40 of the Sea Customs Act, the provision of which were basically different from Section 27 of the Customs Act, 1962. As regards to the High Court's power to grant relief to the assessee under Article 226 of the Constitution, the Court observed that the obligation to pay duty and obligation on the part of the revenue to refund duty wrongly recovered; both arose under the statute. When by his own conduct a party has already lost its right to obtain refund under a particular law, the Court may not relieve the party of the said statutory bar and grant refund. In other words, by lapse of time a party's right to refund might have been extinguished and it may no longer have any subsisting right to maintain a Writ application for enforcement of the same. In ordering or refusing the prayer for refund in exercise of its Writ Jurisdiction, the Court may decline to make an order for payment of money for which there may be other appropriate and adequate remedies and by the party's own laches the remedy had become time-barred.
38. But while making the aforesaid observations, the Court, as it appears, did not visualise a situation where the remedy had become time-barred not due to any laches of the party but due to circumstances beyond his control or due to any other genuine reasons. The question is whether in such circumstances, a Writ Court, which is basically a Court of equity, would come to the rescue of the party on the ground that at any event recovery of the duty had been made without any authority of law in violation of Article 265 of the Constitution.
39. Thus, in my view, the Bench decision of this Court in Inchek Tyre's case (supra) cannot be cited as an authority for the proposition that a Writ Court . cannot or should not under any circumstances allow a claim for 'refund which has become time-barred under a special statute.
40. Considering the trend of the decisions referred to earlier, I am more in favour of the view that though the High Court while exercising powers under Article 226 of the Constitution should not overlook the express statutory provisions so as to render such provisions totally nugatory, it should step in as a Court of equity in appropriate cases to grant relief to a party to prevent his rightful claim being defeated for no fault of his.
41. So far limitation is concerned, it is quite likely that special statutes like the Customs Act, the Central Excise Act etc. have prescribed their own periods of limitation for good reasons, but cases may not be few and far between where the period so prescribed eludes a party due to unavoidable reasons. And since there is normally no specific provision for condonation of the delay, the concerned authority, who is only a creature of the statute, finds no other alternative but to reject the claim as time-barred, however, genuine the claim may be. And in such cases a writ court, as a Court of equity may very well come to the rescue of the party, not to make amends for his laches but to assist him to tide over the situation which is not his own creation. But this remedy under Article 226 should be treated as an alternative remedy provided by the Constitution in addition but not in supersession of the normal remedy as may be provided by the statute. It should have full respect for the statutory mandate but not in a way so as to be a silent spectator of its tyranny. [See in this connections the observations made in Khardah Company's Case, : 1983(14)ELT2159(Cal) (para)].
42. Here is a case, where the petitioner paid excess excise duty being totally ignorant of the fact that he was entitled to certain exemptions under an exemption notification. The ground appears to be genuine since it would not have otherwise paid the excess duty knowing fully well the uncertainties and hazards of refund claims. At any event, the petitioner would not have intentionally allowed the prescribed time to run out.
43. According to the petitioner, it was only on receipt of the letter dated August 7, 1974 from the office of the Accountant General (Annexure 'C') that the petitioner came to know about its right, to get refund and then after proper enquiry when the claim was filed it had already become barred by limitation. And the claim being one under Rule 11 as already found, the Excise Authorities had no other alternative but to reject the claim as time-barred.
44. In my judgment, it would be preposterous to presume that with timely knowledge about his right to get refund of the excise duty paid through error etc., the petitioner would intentionally allow the claim to become time-barred.
45. So, here, in my view, is a case where it cannot be said that the petitioner allowed its claim for refund to become time-barred due to its own laches. And as such, it is a fit case where the writ Court should step in so that the petitioner's rightful claim is not defeated,
46. In this connection it was contended by Mr. Roy Chowdhury, the learned Counsel representing the respondents that as a court of equity the writ Court should decline to come to the assistance of the petitioner on the ground of unjust enrichment, since the petitioner has already passed on the burden of the excess duty paid to its customers.
47. Now, so far this doctrine of unjust enrichment is concerned, a catena of decisions of different High Courts will bear testimony to the fact that the point is now being raised before this Court possibly for the umpteenth time.
48. It may, however, be mentioned at the outset, that the High Courts in India are not consistent in their views on the point. While the Bombay High Court has more or less consistently held that a claim for refund cannot be defeated on the ground of unjust enrichment, different views have been taken by the Madras, Delhi and Gujarat High Courts.
49. In Union of India v. Ahmedabad Calico Printing, 1984 (17) ELT 246, a Division Bench of the Gujarat High Court refused the claim for refund of the manufacturers on the ground of unjust enrichment.
50. The Madras High Court in a Division Bench decision in Aluminium Company Ltd. v. Union of India, 1981 ELT 478 also took the same view and so also the Delhi High Court in Hyderabad Asbestos Cement Products v. Union of India, 1980 ELT 735.
51. The Karnatake High Court in its two Division Bench decisions in Kesoram Cements v. Union of India, 1982 ELT 214 and Union of India v. I.T.C. Ltd., : [1987]165ITR342(KAR) , however, took a different view.
52. A Division Bench of the Bombay High Court in one of its later decisions in I.T.C. Ltd. v. M.K. Chipkar, : 1985(19)ELT373(Bom) and : 1985(22)ELT334(Bom) having failed to come to a concurrent finding, the matter was referred to a learned third 3udge, who took the view that the theory of unjust enrichment could not be invoked in case of claim for refund of excise duty recovered from the manufacturer without authority of law.
53. Mr. Bhattacharjee, the learned Counsel representing the petitioner, relied upon the said decision of the Bombay High Court as well as several other decisions of the same High Court reported in : 1987(31)ELT627(Bom) , : 1987(27)ELT617(Bom) , 1981 ELT 531, 1987 (28) ELT 36, : 1987(27)ELT222(Bom) in support of his two-fold contentions that limitation could not raise its head where duty was realised without authority of law and that the plea of unjust enrichment was also not tenable in such cases.
54. So far the Calcutta High Court is concerned, the matter appears to be concluded by its Bench decision in Khardah Company Ltd. v. Union of India (supra).
55. In the said decision this Court relied upon the decisions of the Supreme Court in Tata Iron and Steel Co. Ltd. v. State of Bihar, A.I.R. 1958 SC 452; Chotabhai v. Union of India, : AIR1962SC1006 and particularly upon the observation in D. Cawasji and Co. v. State of Mysore, : 1978(2)ELT154(SC) that 'there was no provision under which the Cuurt could deny the refund of tax even if the person who paid it had collected it from his customers and had no subsisting liability or intention to refund it: to them, or, for any reason, it was impracticable to do so' as referred to in the decision of the Bombay High Court in Associated Bearing Co. v. Union of India, 1980 ELT 415. It was held that the observation of the Supreme Court in D. Cawasji v. State of Mysore (supra), which though obiter, appeared to enunciate the true legal principle which followed from their earlier decisions in A.I.R. 1958 SC 452 and : AIR1962SC1006 .
56. On such finding the Court rejected and overruled the plea of unjust enrichment. It was also held that though the High Court in exercise of its writ jurisdiction has power for the purpose of enforcement of fundamental as well as statutory rights to give consequential relief by ordering repayment of money realised without any authority of law; the special remedy under Article 226 is not intended to supersede completely the other normal remedies or to deny defences legitimately open in such an action.
57. In my judgment, much controversy could have been avoided had the legislature while prescribing a period of limitation for preferring such claims under a special statute, made provision authorising the statutory functionaries to condone the delay in preferring the claim, on such delay being explained satisfactorily.
58. But so long it is not done the writ Court as a Court of equity has to step in sometimes in case of collection of tax without authority of law in contravention of Article 265 of the Constitution.
59. Since as already held that this is a proper case where the writ Court should intervene; the writ petitions succeed and the Rules issued are made absolute without any order for costs.
60. The respondents are hereby directed by the issue of a writ in the nature of Mandamus to refund to the petitioner the excess excise duties as prayed for within a period of sixty days from this date.
61. This order, as already stated, will govern both the Rules hereby disposed of analogously.