1983 (11) TMI 73 - HC - Central Excise

Summary

Issues Involved:
1. Refund of excise duty paid under a mistake of law.
2. Inordinate delay in filing the petition.
3. Unjust enrichment of the petitioner.
4. Applicability of the limitation period for filing a writ petition under Article 226 of the Constitution.

Detailed Analysis:

1. Refund of Excise Duty Paid Under a Mistake of Law:
The petitioner, a limited company engaged in manufacturing yarn, paid excise duty under tariff item 18 on blended yarn from December 10, 1968, to January 29, 1972, amounting to Rs. 10,66,555.52. This payment was made without any protest. The petitioner later discovered, based on a Gujarat High Court decision dated January 15, 1976, that no excise duty was payable on blended yarn prior to the introduction of tariff item 18-E on March 16/17, 1972. Consequently, the petitioner filed a writ petition under Article 226 of the Constitution on June 23, 1980, seeking a refund of the amount paid under a mistake of law.

2. Inordinate Delay in Filing the Petition:
The respondents opposed the petition on the grounds of inordinate delay, arguing that the petition was filed more than three years after the petitioner allegedly became aware of the mistake on November 9, 1976. The respondents contended that the delay alone was sufficient to refuse the discretionary relief under Article 226. The Court noted that the petitioner had filed a revision under Section 36 of the Central Excises and Salt Act, 1944, on November 6, 1979, which was dismissed on May 26, 1980. However, the Court found no cogent explanation for the delay from November 9, 1976, to June 23, 1980.

3. Unjust Enrichment of the Petitioner:
The respondents argued that the excise duty burden had been passed on to consumers, and thus, refunding the amount to the petitioner would result in unjust enrichment. The petitioner's counsel countered that suitable directions could be given to ensure the refund amount reaches the consumers. However, the Court did not delve into this issue in detail, as the petition was dismissed on the ground of inordinate delay.

4. Applicability of the Limitation Period for Filing a Writ Petition:
The Court referred to several Supreme Court decisions, including Sales Tax Officer v. Kanhaiya Lal, AIR 1959 S.C. 135, and State of Madhya Pradesh v. Bhailal Bhai, AIR 1964 S.C. 1006, which established that the period of limitation for a writ petition is generally three years from the date the mistake is discovered. The Court emphasized that the special remedy under Article 226 is not intended to supersede the modes of obtaining relief through civil courts. The Court reiterated that a writ petition filed beyond three years from the date of knowledge of the mistake is typically considered unduly delayed.

Conclusion:
The Court concluded that there was no cogent explanation for the delay in filing the petition after November 9, 1976. As a result, the petition was dismissed on the ground of inordinate delay. The Court did not address the issue of unjust enrichment in detail but indicated that had the petition been allowed, suitable directions would have been issued to ensure the refund amount reached the consumers. Consequently, the petition was dismissed without any order for costs, and the security amount, if any, was ordered to be refunded to the petitioner.