COLLECTOR OF CUSTOMS Vs. SOORAJMULL NAGARMULL

JUDGEMENT

(1.) This is an appeal against the judgment and decree of the High Court of Calcutta, refusing to enter satisfaction of two decrees under Order 21, Rule 2 of the Code of Civil Procedure obtained by the respondents against the Union of India in the following circumstances.

(2.) The respondents M/s. Soorajmull Nagarmull imported spindle oil form Philadelphia. The firm was required to pay Customs Duty under Item 27 (3) of the First Schedule to the Tariff Act, 1934 at 27 per cent ad valorem. The firm filed two suits asking for refund of excess duty claiming that the oil was dutiable only under Item 27 (8) at-/ 2/6 per imperial gallon. The suits were filed against the Collector of Customs, the Assistant Collector of Customs for Appraisement and the Union of India. The suits were successful and decrees were passed against the Union of India for refund of the amount charged in excess. In one suit the decree was for payment of Rs. 43,723 with interest at 6 per cent per annum from 1st day of April, 1952 until realisation. In the second suit the decree was for Rs. 75,925 with similar interest.

(3.) Since the firm had not paid a sum of Rs. 18,08,667.72 as tax the Income-tax Officer, Circle II, Calcutta issued a notice under section 46 (5A) of the Income Tax Act, 1922 calling upon the Collector of Customs to pay the amount of the decree to him and stating that his receipt would constitute a good and sufficient discharge of the liability for refund to the firms. The Collector of Customs paid the amount into the Reserve Bank and the Reserve Bank issued receipts crediting the amount against Super-tax due from the firm. The Collector of Customs then applied to the High Court of Calcutta under Or. 21, R. 2 of the Code of Civil Procedure for the adjustment of the decrees by this payment. This was refused by a learned single Judge who gave no reasons while dismissing the petition. On appeal to the Division Bench it was held by the Division Bench on January 22, 1964 that the adjustment of the decree could not be granted. It is against the last order that the present appeals have been filed by special leave of this Court.