JNANA PRABODHINI Vs. UNION OF INDIA

JUDGEMENT

(1.) THE questions involved in the petition---Three questions arise in this petition (a) Whether the petitioner-trust is entitled to the refund of the excise duty which they paid to the Excise Department under a mistake of law which they claim to have realised in the year 1982. (b) Whether the writ petition filed by it in the year 1986, after the expiry of three years, should be entertained by this Court in view of certain intervening proceedings to which the petitioner was directed by the respondent-Department itself. (c) Whether, in the peculiar facts of the case, this Court would be justified in ordering refund in favour of the petitioner public trust or whether this would amount to the petitioners unjust enrichment disentitling the petitioner to recover the refund for themselves. The relevant facts stated chronologically.

(2.) THE fact relevant for the purpose of this petition may be briefly stated as follows :-

(3.) THE petitioners contention is very simple. It points out that the fact that the earlier classification under Tariff Entry No. 68 was a mistaken classification is accepted by the Department itself as early as on 22-9-1981 and it is precisely on that ground that the petitioner has been allowed to classify the selfsame goods under Tariff Entry 30 as from that date, with the result that the petitioner has been enjoying the exemption from payment of excise duty of those goods from that date. Neither the articles manufactured earlier were different from the articles manufactured now nor was the law relating to excise tariff was different earlier than the one obtaining at present. The classification done by the petitioner under Tariff Entry 68 (the residuary article) was, therefore, patently erroneous. It follows that the tariff paid by it under that Tariff Entry was the result of a mistake. The petitioner has contended that the mistake was a result of the advice received from the Department itself. As stated above, this position is not admitted by the Department. The Department contends that they gave no advice as such; but they expressed the opinion that the Tariff Entry 68 would be the correct entry. Now, the petitioner is entitled to say that the opinion expressed by the Department was as good as their advice; but, all that apart, point remains that the classification by the petitioner under Entry 68 was a mistake of law on their part. The tax paid by them is, therefore, under a mistaken notion of law and the moment they realised that mistake, they should be held entitled to the refund of the amount from the Department. The cause of action for such claim would be the date of realisation by the petitioner about their mistake. Now, in the present case, there is no dispute even on the question as to when the petitioner trust realised the mistake. The facts stated above show that the mistake was realised by the Trust in July 1980. They even made an application to the Assistant Collector for refund of the tax on the basis that they were entitled to exemption under Entry 30 The fact that the Assistant Collector rejected their claim at that time is a different matter. Position remains that the Trust got the information about the mistake not earlier than July 1980. As a matter of fact, the petitioner can and do legitimately contend that the real information in this behalf was received by them in June 1981 when they got the information that Hind Condensors, one of their competitors, had, in fact, got exemption from payment of excise duty on the identical article. That exemption was given by the Central Board and when the petitioner learnt about that position, they submit, they became fully aware of the mistake committed by them. According to them, in a way, true realisation of the mistake, on the part of the petitioner trust, was in July 1981 and not in July 1980. But we can even assume that this was, in fact, in July 1980 and not in July 1981. Fact remains that, as early as on 16-7-1981, the trust made an application to the Superintendent of Excise informing him about this position and claiming benefit of the exemption arising out of Entry 30, as a result of which the petitioner, in fact, got the exemption by virtue of the order dated 22-9-1981 on which date the new classification filed by the petitioner-trust based on Entry 30 was, in fact, accepted by the Assistant Collector. The entire factual position, therefore, leaves no room for doubt that even according to the Assistant Collector, what was made by the petitioner before 1981 was a mistaken payment, the mistake being one of law. If this is the position, the inexorable provision emanating from section 72 of the Contract Act must hold the field. Under that provision, any money paid by mistake or under coercion by any person must be refunded by that person to the former. This is a provision independent of any of the provisions of the Excise Act as such. It is a provision of the general law. No question of any provision arising out of the Act arises at all. The petitioners, right to refund of the amount paid by mistake cannot, therefore, be belittled.