STATE Vs. MOOLCHAND FATECHAND

JUDGEMENT

(1.) THE Appellant State in this case was the Defendant in an action brought by the Respondents to recover Rs. 8,526 -3 -3 together with interest and costs. The learned Additional Civil Judge, First Class, Indore, who tried the suit, gave judgment for the Plaintiffs for an amount of Rs. 8,526 -3 -0 besides costs.

(2.) THE case of the Plaintiffs is that they are dealers in cloth doing business in Indore; that the Government of the former Holkar State by notifications Nos. 19 and 20 dated 27th June 1936 established a bonded warehouse in a portion of Maharaja Tukojirao Cloth Market, Indore, wherein licensed cloth dealers could deposit cloth imported into Holkar State without payment of customs duty; that they kept a shop in the bonded warehouse and had stocked therein cloth free from any import duty until 14th August 1948; that on this date the Rajpramukh of Madhya Bharat promulgated an Ordinance abolishing all free customs zones in Madhya Bharat and charging on all commodities in stock in free zones on 14th August 1948 a special duty equivalent to the customs duty to which the commodities would have been liable for their import into the covenanting State concerned; that consequently a sum of Rs. 8,526 -3 -3 was recovered from them by way of customs duty on account of cloth held in stock by them in the warehouse on 14th August 1948. The Plaintiffs further averred that after the promulgation of the Ordinance representations were made by various merchants and dealers to Madhya Bharat Government and as a result thereof the Madhya Bharat Government appointed a committee with Shri Mishrilal Gangwal as its President to investigate into the question of the levy of customs duty on commodities stocked in free zones on 14th August 1948; that the report submitted by the committee was considered by the Madhya Bharat Government and on its basis the Madhya Bharat Government issued a notification on 23rd July 1949 declaring that no customs duty would be levied on stock of goods lying in customs free zones on 14th August 1948; that the report submitted by the committee was considered by the Madhya Bharat Government and on its basis the Madhya Bharat Government issued a notification on 23rd July 1949 declaring that no customs duty would be levied on stock of goods lying in customs free zones on 14th August 1948 and that the customs duty already realised on these commodities would be refunded to the merchants on their applying to the Superintendent of Customs and Excise having jurisdiction for the area concerned. After the issue of this notification the Plaintiffs applied to the Superintendent of Customs and Excise, Indore, for a refund of Rs. 8,526 -3 -3 realised from them by way of customs duty on the stock of cloth lying in their shop in the bonded warehouse on 14th August 1948. But the Superintendent of Customs and Excise, Indore, refused to refund the amount on the ground that the notification in question applied to stocks in customs free zones and that the bonded warehouse was not a free zone. Thereupon the Plaintiff instituted the suit giving rise to this appeal for the recovery of Rs. 8,526 -3 -3.

(3.) , The learned trial Judge held that the Plaintiffs' suit was within time; that it was cognizable by the civil Court; that the bonded warehouse was a customs free zone which was abolished by the Ordinance issued by the Rajpramukh of Madhya Bharat on 14th August 1948; and that the notification issued by the Madhya Bharat Government on 23rd July 1949 exempting from customs duty goods held in stock -in free zones on 14th August 1948 and directing the refund of the duty already realised applied to cloth held in stock in the bonded warehouse. He further held that there was nothing in the notification on 23rd July 1940 to disentitle any cloth dealer who had recovered the amount of customs duty from the purchasers by including it in the price of cloth sold or otherwise, from making a demand for the refund of the amount of duty paid by them to the Government. On these findings the Plaintiffs' suit was decreed.