1992 (3) TMI 349 - HC - Indian Laws

Summary

Issues Involved:
1. Whether the petitioners should be denied relief under Article 226 of the Constitution due to the availability of an alternate efficacious remedy.
2. Whether PVC Resin falls under item 40(b) or item 53(c) of Schedule I of the Octroi Rules.
3. Whether the petitioners are entitled to a refund of excess octroi duty paid during the pendency of the petition.

Detailed Analysis:

1. Alternate Efficacious Remedy:
The first issue is whether the petitioners should be denied relief under Article 226 of the Constitution because an alternate efficacious remedy of filing a statutory appeal under section 406 of the Act is available. The court acknowledged that section 406 allows an aggrieved assessee to file an appeal before a Civil Judge and further to the District Court. However, the court decided not to accede to this submission for multiple reasons. Firstly, the petition had been pending for eight years, making it harsh and cruel to direct the parties to start fresh litigation. Secondly, the Corporation had given an undertaking to refund the excess duty if the petitioners succeeded, indicating their willingness to proceed with the hearing. Lastly, there was no dispute on facts that required examination in a statutory appeal, as both parties agreed on the nature and use of the imported PVC Resin. Therefore, the preliminary objection raised by the Corporation was turned down.

2. Classification of PVC Resin:
The second issue involves determining whether PVC Resin falls under item 40(b) or item 53(c) of Schedule I of the Octroi Rules. The court examined the headings of the respective classes and concluded that the headings serve as an integral part of the schedule. Item 40(b) falls under Class III, which pertains to industrial use, while item 53 falls under Class V, which pertains to household goods. The court noted that PVC Resin is a chemical used for industrial purposes, thus falling under item 40(b). The court referred to various authoritative sources and previous judgments to establish that PVC Resin is a chemical and not plastic. The court concluded that PVC Resin imported by the petitioners is liable to octroi duty under item 40(b) and not item 53(c).

3. Refund of Excess Duty:
The third issue is whether the petitioners are entitled to a refund of the excess octroi duty paid during the pendency of the petition. The Corporation argued that the petitioners had passed on the excess duty to their customers and that a refund would result in unjust enrichment. However, the court held that the Corporation could not plead unjust enrichment due to the solemn undertaking given at the time of admission of the petition. The court emphasized that accepting such a submission would undermine the administration of justice and the sanctity of undertakings given to the court. Therefore, the Corporation was directed to refund the excess duty within one month.

Conclusion:
The petition succeeded, and the rule was made absolute in terms of prayer (a). The respondents were directed to refund the excess duty recovered under item 53(c) of Schedule I of the Octroi Rules from the date of the petition's lodgment until the date of the judgment within four weeks, in accordance with the undertaking furnished. The respondents were also ordered to pay costs to the petitioners. The application for a stay of the order was refused.