1986 (2) TMI 74 - HC - Central Excise

Summary

Issues:
1. Application for refund of excess tax paid under common mistake of law.
2. Rejection of refund application based on limitation under Rule 11 of Central Excises and Salt Rules, 1944.
3. Interpretation of limitation period for refund under Section 11-B of the Act and general law of limitation under the Limitation Act, 1963.
4. Invocation of writ jurisdiction under Article 226 of the Constitution of India for seeking relief.
5. Precedent regarding relief for excess duty paid under Article 226.

Detailed Analysis:
The petitioners sought a writ of certiorari to quash orders rejecting their refund application for excess tax paid under common mistake of law. The petitioners manufactured excisable welding electrodes and mistakenly deposited Rs. 1,03,676.40 p. in excess from 17-6-1971 to 31-3-1972 due to not deducting trade discounts. The refund application was rejected based on Rule 11's limitation, leading to subsequent rejections by higher authorities. The main contention was the applicability of Rule 11's limitation versus the general law of limitation under the Limitation Act, 1963.

The court analyzed the limitation issue and concluded that the petitioners' refund application was within the three-year limitation period under Article 113 of the Limitation Act, 1963. The court held that the petitioners were entitled to a refund for the excess tax paid from 19-6-1971 to 31-3-1972, excluding two days. The court invoked Article 226 of the Constitution of India to enforce statutory rights for repayment of money collected without legal authority. It was emphasized that relief under Article 226 could be granted if the application for refund was made within three years, as seen in the precedent of Shri Vallabh Glass Works Ltd. v. Union of India.

Ultimately, the court allowed the petition, ordering the refund of the excess tax paid, except for the two days falling outside the limitation period. The court quashed the previous rejection orders and highlighted the importance of seeking relief under writ jurisdiction when statutory remedies are exhausted. The judgment emphasized the availability of relief under Article 226 for excess duty paid, provided the application was made within the general limitation period of three years.