N V RAMAIAH Vs. STATE OF A P

JUDGEMENT

(1.) The Hyderabad Denatured Spirit Rules, 1955 and the Andhra Pradesh Denatured Spirit Rules, 1971, which repealed the Hyderabad Rules, levied gallonage fee at the rate of Re.1/- per gallon on the denatured spirit purchased by licensees from the Government Distilleries. Denatured spirit is used as a raw material in the manufacture of several products. A person, M/s. Syntho-Pharm, represented by its partner Sri A. P. Waghray, challenged the said levy on the ground, inter alia, that the State was not rendering any services whatsoever in lieu of the said fee and, therefore, the levy was bad. The writ petition filed by him was allowed by a Bench of this Court, which declared the levy to be bad inasmuch as the State failed to produce any material whatsoever to show that it was rendering some or other service in lieu of the said fee. The declaration granted by the Court is to the following effect:

(2.) The said writ petition was filed in 1969, and the decision was rendered on 6-3-1972; it is reported in M/s. Syntho Pharm v. Commissioner of Excise (1972) 2 Andh WR 260. The plaintiffs/appellants herein were not parties to the said writ petition, nor had they filed any similar writ petition. After the judgment of the Bench aforesaid, however, they instituted the present suits for recovery of the gallonage fee paid by them. Since the facts in all the three appeals are identical, it would be sufficient if we state the facts in A.S. No. 510/1977, arising from O.S, No. 83 of 1975 on the file of the Additional Subordinate Judge, Vijayawada.

(3.) O.S. 83/1975 was filed on 4-3-1975, i.e., practically on the last day of the three-year period commencing from the date of the Bench judgment reported in (1972) 2 Andh WR 260, aforesaid. The plaintiff asked for refund in a sum of Rs. 2,12,679.22 Ps. made up of two items, viz., Rs.1,80,234.22 Ps. being the gallonage fee paid by him during the period 1961-62 to 1972-73, and another sum of Rs. 32,445/- being interest on the said amount from 6-3-1972 to 4-3-1975. The plaintiff also asked for interest from the date of suit till the date of realisation. The plaintiff's case is based on the following averments :- The plaintiff is a manufacturer of French polish; he also deals in methylated spirit; he was granted a licence under the relevant Rules enabling him to purchase denatured spirit; he has been purchasing various quantities of denatured spirit from the Government from the year 1961-62 onwards and has been paying the gallonage fee at the appropriate rate; after the aforesaid Bench judgment, the plaintiff made a representation on 7-10-1973 requesting the Excise Commissioner, Andhra Pradesh, Hyderabad to refund the gallonage fee collected from him, in view of the said judgment; though the plaintiff sent several reminders to the Commissioner, as well as to other Excise authorities, they took no action in pursuance thereof; the judgment of the High Court makes it clear that the levy and collection of the said fee is illegal; the plaintiff paid the same under a bona fide mistake and is, therefore, entitled to its refund along with interest at the rate of 6% per annum; the cause of action for claiming the refund arose on the several dates upon which the fee was illegally collected from the plaintiff during the years 1961-62 to 1972-73, and on 6-3-1972 when the aforesaid Bench judgment was delivered. It was further stated that the cause of action also arose on 7-10-1973 when the plaintiff requested for refund of the amount, and also on various subsequent dates when he sent reminders.