Minerals And Metals Trading … vs Cegat on 14 February, 1992

Calcutta High Court
Minerals And Metals Trading … vs Cegat on 14 February, 1992
Equivalent citations: 1992 (40) ECC 269, 1992 (58) ELT 548 Cal
Author: A N Roy
Bench: A N Roy


Ajoy Nath Roy, J.

1. This is an application on the part of the Minerals & Metals Trading Corporation of India Ltd. for return or refund from the Customs Authorities of a sum of Rs. 20,97,487.35 on the ground that the same represents overpaid duty. The writ petitioner Corporation has exhausted its remedy upto the Customs, Excise and Gold Control Tribunal as provided under the Customs Act but has failed to obtain refund, mainly because the refund application was late by about a month. The order of the Tribunal dated 13th June, 1990 is annexed to the Writ petition.

2. Mr. Mitra appearing for the respondents has prayed for time to file an affidavit-in-opposition. Mr. Mitra stated that his client would like to put in an affidavit showing facts about the excess payment of duty being made by the Writ petitioner by reason of its own mistake, and that it is by reason of the Writ petitioner’s own inaction that the refund was not claimed within time. Mr. Mitra has also said that he would like to put in the affidavit, that the concerned Bill of Entry was not corrected by the Customs authorities as stated by the Writ petitioner and that no refund could be had on the basis of the date of that alleged correction. I do not think there is any necessity of filing any affidavit for the purpose of the aforesaid facts as, for the purpose of disposal of the instant Writ, I assume all the above in favour of the respondents and against the Writ petitioner.

3. The undisputed fact is that the duty was paid by two several instalments on 10th May, 1982 and 12th May, 1982. The refund was claimed on 3rd December, 1982 which means six months had expired by then, but not seven.

4. It is also not in dispute that excepting for the delay of under one month, the application for refund was in order. It was nobody’s case either before me or before the Tribunal that the application form for refund or necessary declaration to be attached therewith was in any manner defective.

5. Mr. Bajoria has argued the case on three grounds. First he said that the Writ petitioner, M.M.T.C. is a Government within the meaning of Section 27 of the Customs Act and that the proper period of limitation would be one year and not six months.

6. The second submission of Mr. Bajoria was that the Bill of Entry being incorrect, his client would be entitled to refund pursuant to such correction on the basis of Section 154 of the Customs Act, 1962 notwithstanding the limitation provisions of Section 27. I do not intend to dispose of this Writ on this second ground either; for entering upon this, an affidavit from the Respondents regarding correction of the Bill of Entry would be necessary. To my mind, the same is not called for in view of the third and the most important point urged by Mr. Bajoria.

7. Mr. Bajoria stated that assuming that his client was not entitled to refund of the overpaid duty within the four corners of the Customs Act, yet there vests in the Writ Court and the Courts enforcing fundamental rights a residuary jurisdiction to permit return of money unfairly held by public Respondents who are State or other authority within the meaning of Article 12 of the Constitution of India. Mr. Bajoria has stated that such an enforcement, or Mandamus directing return of money, under circumstances which are considered by the Court to be fair within the ambit of Article 14 of the Constitution of India as at present judicially interpreted, would not be limited by any special provision of limitation in any particular situation. The Constitutional power can be limited only by way of a Constitutional Amendment and not by way of any ordinary central enactment.

8. For the purpose of supporting the above contention, Mr. Bajoria referred to the case of Doaba Co-operative Sugar. Mills from which a passage is also quoted in the order of the Tribunal. It was held in that case that though the statutory authorities granting refund might be bound by the provisions regarding limitation or other limiting provisions in the special enactment, yet if the party can seek recourse in an alternative remedy in a Civil Court then that independent remedy would remain open notwithstanding the special enactment.

9. The said case specifically mentions the situation of payment under a mistake of law. In this regard Mr. Bajoria referred to the case of Kanhaiyalal and said that, on the basis of this judgment of a 5 Judges Bench of the Supreme Court, for several purposes, the question of a mistake of law is equated to the question of a mistake of facts. One such purpose is the purpose as envisaged in Section 72 of the’ Contract Act. It was further contended by Mr. Bajoria that in the instant case the independent remedy by invoking the Writ jurisdiction is permitted because the duty was paid on a mistake of fact committed by the Minerals and Metal Trading Corporation of India Ltd. It was said that the mistake consisted for multiplying a money figure by the number of packages instead of by the dollar amount that should have been the appropriate figure.

10. The next case relied upon on the part of the petitioner is the case of Shri Vallabh Glass Works reported in AIR 1984 Supreme Court 971. It was contended on the basis of this authority that a Writ jurisdiction is separate from the jurisdiction for ordinary enforcement of rights, say, for example, those rights which have accrued by reason of mistakes. It may be that an ordinary suit upon a mistaken payment is to be instituted within three years. But if a refund is claimed by way of a constitutional action, then the discretion of the Court for ordering such a refund might well be exercised beyond the period of 3 years under appropriate facts and circumstances; on the other hand in an underserving case such an application might fail even if made within a period of 3 years. In my opinion this case is another good authority for emphasizing the distinction as between obtaining a refund on an ordinarily recognized general principle of law, and obtaining a refund by way of the extraordinary enforcement of fair action on the part of the Respondent public authorities.

11. Mr. Mitra relied upon the case of Parson Tools reported in AIR 1975 Supreme Court 1039 and placed before me Headnote-‘B’ thereof. That case is no doubt an authority for the proposition that provisions of limitation engrafted in special statutes are meant to be observed and not broken. They are naturally incorporated with a purpose and the original period of limitation engrafted or the permissible extension period thereof as mentioned in the statute cannot be broken at will of the applicant. Mr. Mitra also said that since the Writ jurisdiction was not invoked in the beginning by the Writ petitioner the same could not now be invoked as the order of the Tribunal has now finally negatived the rights of the Writ petitioner.

12. With the greatest of respect, I am unable to agree with Mr. Mitra. The two procedures, one before the Customs authorities leading upto the Tribunal, and the other before a Constitutional Court are entirely different in nature. By reason of the pronouncement of the first type it is now practically settled that the writ petitioner cannot claim refund within the four corners of the special statute being the Customs Act. However, the other question still remains as to whether the Respondents can justly hold on to the overpaid money. This is a separate question. The Writ petitioner complains that the keeping of overpaid refund with the Respondent authorities is unfair and therefore in breach of Article 14 of the Constitution of India which enforces fair action on the part of all public authorities. Thus the special period of limitation engrafted in the Customs Act would not stand in the way of enforcing fair action on the part of the Respondents if such is otherwise seen to be a mandate flowing from the provisions of Article 14 of the Constitution of India.

13. Mr. Mitra next relied on the case of Madras Rubber Factory reported in AIR 1976 Supreme Court page 638. He said that on the basis of this decision the claim beyond six months would have to be dismissed by reason of the provisions of the Customs Act. He also said that if claims are entertained in the Writ jurisdiction for refund made beyond the period of six months, the entire statutory provisions would be nullified.

14. I am again, with respect, unable to agree. It is not that in each and every case of constitutional action for refund on claims made after 6 months, that the Court would pass a mandate or a writ directing refund of the overpaid amount. Just as the customs authorities are bound to reject the claim preferred outside six months so also is a constitutional Court compelled to ‘use its discretion and apply its mind to the facts and circumstances of each case where a writ is asked for on the basis of compelling fair action on the part of the Respondents. Just as permitting refund beyond six months would be illegal for customs authorities, so also would an automatic rejection of a writ application for refund claims made after six months be an abandonment of constitutional functions entrusted to a Writ Court. I am compelled therefore by reason of discharge of these constitutional duties to assess the undisputed facts of this case to see if fair action on the part of the Respondents calls for the refund rather than the retention of the overpaid amount.

15. The amount of money overpaid is not disputed. The delay in claiming refund is under one month. The pursuit of remedies under the Customs Act has been thorough and diligent and has spread over a period of 10 years. No negligence or laches on the part of the Writ petitioner is apparent excepting at the initial period where the period of 6 months was allowed to lapse by some days. On the other hand the respondent authorities have laid no claim to the overpaid duty on any legal or other just head or basis. It is quite possible that both the Government departments and the Tribunal would rather refund the amount but find it impossible on the basis of law to effect the refund themselves. Indeed neither the Tribunal nor the Respondent authorities can, on the basis of any law which they are bound to obey or administer, direct refund of this overpaid duty. If such refund were directed by them, the same might well be called in question. An inter-departmental resolution in this matter as between the Government and the petitioner which is at least a Government Company would also therefore serve no useful purpose. None can direct refund by way of fair action excepting a Court administering the constitutional jurisdiction of enforcing fundamental rights. Under these circumstances, it would be a further wastage of time to send the matter over for any departmental conciliation which has not fructified in the last 10 years and might well remain in a position of stalemate ever afterwards.

16. The case of Dunlop India reported in AIR 1985 Supreme Court 330 envisages a situation where statutory remedies are entirely ill-suited to meet the demands of an extraordinary situation; there, it has been said a Writ under Article 226 might provide the only solution. In my opinion the aforesaid dictum finds an exact fit in the facts of this case. It is quite extraordinary that the claim for refund should have been delayed by only a few days and it is quite clear now that proceedings under the Customs Act or departmental conciliation are both entirely ill-suited to resolve the justice of the present case.

17. Accordingly in my opinion there should be a direction for refund of the overpaid duty immediately to the Writ petitioner. No question of payment of interest arises as this is a case for enforcement of fair action on the part of the State authorities and it is not a resolution of private disputes where interest rates are calculated on principles applicable in those situations. There shall, accordingly be a Writ absolute in the nature of Mandamus directing the Respondents to refund forthwith to the Writ petitioner the said sum of Rs. 20,97,487.35 being an excess customs duty paid on import of 82 and 37 cases of Stainless Steel mentioned in the Writ petition and the annexures thereto.

18. The refund shall in any event not be delayed beyond four weeks from the date of service of a copy of this order upon the concerned respondents.

19. Mr. Mitra wants to record that the allegations in the Writ petition are not admitted. I am unable to make any recording to that effect as I have proceeded not upon any disputed allegations in the Writ petition but only upon admitted facts as contained therein.

20. Stay of operation of this order is prayed for. The same is refused.

21. All parties are to act on a signed copy of the minutes of this dictated order on the usual undertaking.

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