1979 (2) TMI 110 - HC - Central Excise

Supreme Court decisions - Binding effect - Date of effect - Mistake of law - Writ of Mandamus - Discretionary powers

Issues Involved:
1. Refund of duty paid under Rules 1960.
2. Payment made under a mistake of law.
3. Discretionary relief under Article 226 of the Constitution of India.
4. Voluntary payment of excise duty and its implications.
5. Delay in seeking relief.

Detailed Analysis:

1. Refund of Duty Paid Under Rules 1960:
The petitioners sought a writ of Mandamus directing the respondents to refund the duty paid under the Rules 1960. The court considered multiple writ petitions together as they raised the same issue.

2. Payment Made Under a Mistake of Law:
The court examined whether the payments made by the petitioners could be considered as payments made under a mistake of law. The court referenced the Supreme Court decision in *Kalyani Stores v. State of Orissa, AIR 1966 S.C. 1686*, which declared the levy of excise duty on Indian-made foreign liquor and beer as unauthorized and illegal. The court noted that the petitioners paid the duty after the Supreme Court's decision and thus could not claim ignorance of the law. The court emphasized that under Article 141 of the Constitution of India, the law declared by the Supreme Court is binding on all courts within India. Therefore, the petitioners were deemed to have known the law when they made the payments, negating the claim of a mistake of law.

3. Discretionary Relief Under Article 226 of the Constitution of India:
The court discussed the discretionary nature of relief under Article 226. It referenced the Supreme Court's decision in *Dhayalakshmi Rice Mills v. Commissioner of Civil Supplies, AIR 1976 S.C. 2243*, which upheld the High Court's discretion in denying relief when payments were made voluntarily and benefits were derived from such payments. The court concluded that the petitioners, having paid the duty voluntarily and gained permits for their trade, were not entitled to the discretionary remedy of a writ of Mandamus.

4. Voluntary Payment of Excise Duty and Its Implications:
The court noted that the petitioners paid the excise duty voluntarily to obtain permits for importing Indian-made foreign liquor into the State. The petitioners derived considerable profit from this trade. The court cited the Supreme Court's observation that where payments are made voluntarily and benefits are derived, a writ of Mandamus for a refund is not warranted. The court also considered that the duty paid was passed on to the petitioners' customers, further weakening their claim for a refund.

5. Delay in Seeking Relief:
The court addressed the issue of delay in seeking relief. It referenced the Supreme Court's decision in *State of Madhya Pradesh v. Bhailal Bhai, AIR 1964 S.C. 1006*, which emphasized that undue delay and the nature of the controversy are significant factors in deciding whether to grant relief under Article 226. The court found that the petitioners approached the court only when prohibition was reintroduced, affecting their business, and not immediately after the Supreme Court's decision. This delay was a crucial factor in denying the writ of Mandamus.

Conclusion:
The court dismissed the writ petitions, concluding that the petitioners were not entitled to the discretionary relief of a writ of Mandamus for the refund of excise duty. The court emphasized that the payments were made voluntarily, the petitioners derived benefits from the payments, and there was undue delay in seeking relief. The petitioners were advised that they might still have a remedy by filing a suit in a civil court. There was no order as to costs.

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