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TMI Blog1987 (7) TMI 329X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal is Dhrangadhra Chemical Works. Dhrangadhra Municipality was the original defendant while Dhrangadhra Chemical Works was the original plaintiff in civil jurisdiction suit No. 76 of 1963 which was filed in the court of Civil Judge (S.D.) Surendranagar to recover Rs. 6,29,066.97 on the ground that the said amount was illegally retained and collected by the defendant municipality from the plaintiff towards octroi. Special Civil Application No. 1729 of 1977 has been moved by the plaintiff directly in this court against the State of Gujarat and defendant-municipality challenging the vires of Gujarat Act 6/78 viz. Dhrangadhra Municipality (Imposition of tax) Validation Act, 1977. For the sake of convenience, we shall refer to Dhrangadhra Municipality as the defendant and Dhrangadhra Chemical Works as the plaintiff in the later part of this judgment. 3. The plaintiff alleged in its aforesaid suit that the defendant had no authority to levy or recover octroi from the plaintiff and that the action of the defendant in recovering and retaining octroi from the plaintiff was illegal and ultra vires. The plaintiff s case was that it is a company registered under the Indian Companies Act a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndant towards octroi dues as collected from the plaintiff totally amounted to Rs. 6,29,066.97 for the entire period from 1953 to 30-9-1960. A decree for the said amount alongwith interest and cost was prayed for by the plaintiff against the defendant on the aforesaid grounds. 5. The suit was resisted by the defendant on various grounds contained in the written statement, ex. 12. The defendant municipality tried to justify its action of collecting octroi from the plaintiff and its action of appropriating the deposited amount towards octroi dues of the defendant for the relevant period. The suit was resisted on various other technical contentions including non-joinder of parties and limitation. 6. On the pleadings of parties, issues were framed by the learned trial Judge at Ex. 44. In all, 17 issues were framed. After recording evidence offered by the parties, the trial court came to the findings on respective issues. On issue No. 1, the finding was against the plaintiff. That pertained to the alleged ultra vires character of the rules framed by the Government purporting to act under Section 4 of the Saurashtra Terminal Tax and Octroi Ordinance, 1949 authorizing the municipalitie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt may seek to attack the decree of the trial Court on the additional ground of passing of the Validation Act 6/78 by the Gujarat Legislature. It becomes obvious that if decree passed by the trial Court against the defendant is shown to be liable to be set aside on any other grounds, challenge to vires of Gujarat Act 6/78 in the companions special civil application would be academic challenge and would not call for a decision thereon by us. As the subsequent discussion in this judgment will show, challenge to the vires has become academic as the decree passed by the learned trial Judge against the defendant is liable to be set aside on a short ground which will be highlighted hereinafter. 7. When this appeal and the companion special civil application reached final hearing before us, Mr. Raval for the defendant vehemently contended that the suit as filed by the plaintiff does not disclose any cause of action and suffers from a fatal flow and only on this short ground, the suit is liable to be dismissed and the decree passed against the defendant is liable to be set aside. According to Mr. Raval, the suit as filed by the plaintiff is based on the ground that the defendant had no a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it fall under Section 148 of the Indian Contract Act or Section 70 of the Act and if that is so, the legal requirements of pleading and proof so far as suit under Section 72 of the said Act are concerned, would at apply to the facts of the present case. It was next contended that agreement ex. 126 entered into between the parties pending the first litigation upto the Supreme Court, cannot be of any avail to the defendant as the said agreement was contrary to law and in any case, the plaintiff can always show that despite this agreement, entitling the municipality to appropriate the then capacited amounts ever years, towards its octroi dues, as the defendant was not entitled to recover octroi, such appropriation was bad in law and, therefore, the deposited amount was required to be refunded to the depositor viz. the plaintiff. It was ultimately contended that decisions of the three Division Benches of this court in the cases of Bharat Vijay Mills (supra), New India Industries Ltd. (supra) and Tata Chemicals Ltd. (supra) were required to be reconsidered in view of the fact that they were contrary to the decision of the other High Courts to which our attention was invited and to whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... framed is of little consequences. The preliminary objection raised on behalf of the plaintiff in this connection has, therefore, to be rejected. 10. Now, turning to the merits of the contentions raised on behalf of the defendant about the maintainability of the suit, it is necessary to look at the main averments in the plaint with a view to finding out the true nature and scope of the plaint. In paras 2 and 3 of the plaint, history of the various legislations which were holding field in connection with the import of octroi in that case has been traced. In para 4 it has been pointed out how the then Saurashtra Government purported to act under Section A of the Ordinance and framed rules for collection of octroi under the said Ordinance. In para 5 of the plaint, it has been averred that under the provisions of the Bombay District Municipal Act, 1981, the Government has no authority and the defendant municipality cannot derive such authority directly from the Government for levying and collecting octroi, as from the date the said municipal act. Then follows para 6 which recites that from 1-7-1963, the rate of octroi on different goods which was raised by the defendant to 1-1/2 times ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lity on 25-11-1962 and then follows para 18 which is cause of action para. It is useful to reproduce para 10 fully, and it reads as under :- 10. That the cause of action for the suit has arisen on or about 27-9-1980 when the amounts deposited with the defendant Municipality were illegally and wrongfully appropriated by the defendant as octroi and on or about 25-11-1962 when the plaintiff gave the statutory action to the defendant to which the defendant has neither replied nor complied. After these relevant paras in the plaint, follows prayer clause which is also required to be extracted in extenso as under :- The plaintiff, therefore, prays :- (a) It be declared that the defendant have no authority to levy or recover octroi from the plaintiff and that the action of the defendant levying and collecting octroi is illegal, void and ultra vires and a decree be made against defendant for Rs. 5,29,066.97 (Rupees Six lacs twenty-nine thousand sixty six and ninety seven ps.) being the amount of octroi illegally collected by them from the plaintiff upto the period ending with 31-9-1961. (b) the recovery of the cost of the suit from the defendant. (c) any other relief that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 of the Indian Contract Act comes to the assistance of the plaintiff. Section 148 of the Act occurs in Chapter IX and it deals with bailment. It recites that a bailment is the delivery of goods by one person to another for some purposes, upon a contract that they shall, when the purpose is accompalished, be returned or otherwise disposed of according to the directions of the person delivering them. The person delivering the goods is called the bailor. The person to whom they are delivered is called the bailee. On the express pleadings contained in various paras of the plaint to which we have made reference, it must be stated that nowhere by a remotest implication, cause of return of bailed goods from the defendant is pleaded by the plaintiff. It is not the case of the plaintiff that it had bailed various amounts with the defendant even assuming that cash amount on be made subject neither of bailment and that it was done for a specific purpose which is now over and, therefore, bailer demands back bailed goods from the bailee. On the express language of the plaint and especially in the light of the prayer clause, such case is totally ruled out. Reliance placed by the learned Advocat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey were to be returned to the plaintiff as deposit amounts. On the contrary, it is the case of the plaintiff that whatever might have been the historical background of the deposits on the octroi account till 26-9-1960, atleast from that day onwards, the entire amount which was standing in the account of the plaintiff was appropriated towards octroi dues and subsequently also, the defendant want on charging octroi and the suit as filed was for refund of the entire amount on the ground that the defendant had no authority to appropriate this amount as octroi dues. The suit was filed on 9-4-1983. By that time, admittedly, as stated in the plaint, the entire amount collected over years had got appropriated towards octroi dues and was credited in the books of account of the defendant as octroi recovered from the plaintiff. It is that amount which is sought to be recovered from the defendant on the ground that the defendant had no power to levy octroi during the relevant time. Consequently, the suit as filed must necessarily be held to be one far refund of octroi amount retained and collected by the defendant from the plaintiff which according to the plaintiff, the defendant had no right ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id various amounts upto 26-9-1980 by way of octroi duty only as deposit under protest. If the amount is paid under protest, it can never be urged that it was paid voluntarily and lawfully and that the other side having obtained benefit thereof must pay compensation for the same. On the express language of Section 70, therefore, the present suit cannot be said to be one contemplated by it. It is totally dehors the basis requirements of Section 70. Consequently, it is not possible to agree with the submission of the learned Advocate for the plaintiff that this suit falls within Section 70 of the Act. As discussed earlier, the comprehensive reading of the plaint leaves no room for doubt that this is a suit filed by the plaintiff for refund of octroi amount paid by it under protest over a period of time to the defendant on the ground that the defendant had no right to collect such octroi dues from the plaintiff. It is a suit simpliciter for refund of octroi amount allegedly illegally collected by the defendant from the plaintiff over a period of time. If this is so, Section 72 of the Contract Act is the only legal foundation on which the suit can be rested. If at all Section 72 reads a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s connection, It would be profitable to have a look at the commentary on Ansen s law of Contract, 25th Ed. published in 1979 by Oxford (Unipress. We find in Chapter 21 thereof discussion about restitution Relationships creating quasi-contracts wherein one party is bound to restitute to the other party in certain circumstances are discussed in that Chapter. It has been mentioned therein that circumstances must occur under any system of law in which it becomes necessary to hold one person to be accountable to another, without any agreement on the part of the former to be so accountable, on the ground that otherwise he would be retaining money or some other benefit which has come into his hands to which the law regards the other person as better entitled, or on the ground that without such accountability the other would unjustly suffer loss. The law of restitution exists to provide remedies in circumstances of this kind. It becomes obvious that Section 72 of the Contract Act is ipso facto based on the principle of restitution. So far as principle of restitution is concerned, the principle of unjust enrichment of the defendant at the cost of the plaintiff entitling the plaintiff to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clusion is reached, it becomes obvious that when the plaintiff seeks to recover from the defendant tax amount on the ground that the tax was illegally collected of necessity, it is to be pleaded and then provided, that the amount was paid under a mistake or coercion and that if it is not returned or repaid, the plaintiff would suffer legal injury or prejudice. It also becomes obvious that in cases where the plaintiff who has paid alleged illegal tax, has passed it on to the consumers, he cannot legitimately contend that refusal of his request for restitution would result in any prejudice to him. This is exiomatic because so far as the plaintiff is concerned, even assuming that tax was illegally recovered from him, he has paid the tax after collecting it from the consumers. So, it is to consumer to whom tax is passed on, who has really paid the tax through the hands of the plaintiff who is only a collecting instrumentality. If ultimately it is found that tax is illegally recovered by the defendant, then it should go back to the real tax payer and the real tax payer is not the plaintiff but the consumer who has borne the burden of the tax. It must logically follow that no collecting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suit would remain otiose, incohate and incomplete and such suit will have to be treated as still born suit which would fail of its own as disclosing no completed cause of action. It is this grievance of the defendant based on the pleading of the plaintiff that has been put forward in the foreground by Mr. Raval for defeating the case of the plaintiff. As observed above, in the light of the legal requirements of Section 72, relevant averments in the plaint as considered in details by us, fall for short of the requirements of Section 72 and as these basic requirements are not pleaded, there is absolutely no cause of action in favour of the plaintiff for maintaining the present suit and this suit must be held to incompetent and disclosing no cause of action. In fact, it was liable to be rejected under Order 7, Rule 11 C.P.C. which enjoins the court to reject the plaint which does not disclose any cause of action. In the light of the averments found in the plaint, therefore, it must be held that it does not disclose any completed cause of action under Section 72 of the Act and, therefore, such a plaint was liable to be rejected at the threshold. Merely because the trial had gone on and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erved earlier, basic requirements of Section 72 have not been pleaded such less proved by the plaintiff. Such a defective plaint makes the plaintiff liable to be non-suited. 13. It is argued that Article 265 of the Constitution of India provides that no tax shall be levied or collected except by authority of law. Therefore, it is submitted that once it is shown that the imposition and/or levy of tax is illegal, the amount collected by way of tax should be refunded to the person from whom is collected. This argument requires a closer scrutiny. 14. When direct tax like income tax, wealth tax, etc. is imposed, the person who pays and from whom the amount of tax is collected bears the burden of tax. While in case of indirect taxes, which are in economic jargon called commodity taxes, it is the individual who ultimately consumes the commodity that bears the burden of tax. The commodity carried the burden of tax with it. The person who collects the amount of tax and pays to the Government, or to appropriate authority, happens to be at a particular stage where it is administratively convenient to collect the amount of tax and pass it over to the Government. In case of excise duty, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refund of the amount of tax even if it is held that the recovery of the tax was illegal or the same was on account of mistake of law. Such a claim can be made only by the person to whom the income belonged and from whose income the amount of tax was deducted at the source. 16. Having regard to the aforesaid realities of commercial and economic world, the question as regards the applicability of Article 265 of the Constitution of India can be determined. It is trite knowledge to say that no provision of the Constitution of India can be interpreted or implemented in isolation. Just as every statute is to be read as a whole, the Constitution is also required to be read as a whole for correct interpretation and/or application of certain provision contained therein. Preamble to the Constitution of India indicates the basic ideal and object of the Constitution of India, which is to establish on egalitarian society based on socialistic principles. Similarly, the fundamental principles in the Governance of the country require the State (the term State occurring in Article 12 of the Constitution of India also includes judiciary) to direct its policy towards securing the ownership and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may be recommended or directed by the Court to utilise the amount as collected in the best interest of the society at large, instead of refunding it to persons unauthorised or ineligible to receive the same. 19. It is now time for us to have a look at the three decisions of the Division Benches of this Court which had occasion to consider the nature of the case which the plaintiff, coming for refund of the amount allegedly illegally collected by the defendant, has to plead and prove. In the case of Tata Chemicals Ltd. (supra), the Division Bench of this Court consisting of V.V. Bedarkar, J. (as he then was) and one of us A.P. Ravani, J. had to consider the meet question whether the plaintiff company which had filed the suit for recovery of amount of Rs. 1,02,46,701.52 on the ground that this amount representing excise duty was illegally collected from the plaintiff company was entitled to maintain such a suit. It becomes obvious that this was also a suit under Section 72 of the Indian Contract Act. Whether the plaintiff company which had by itself not borne the burden of the tax but which had collected tax from the consumers could maintain such a suit and claim any decree from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the common good. Therefore, it would be unjust and unfair to require the State to make its repayment after a number of years." 20. It is also interesting to reproduce what is stated in para 19 of the report in the light of the decision of the Supreme Court in S.P. Gupta v. Union of India, A.I.R. 1982 S.C. 149 :- In S.P. Gupta v. Union of India, A.I.R. 1982 Supreme Court, 149, D.A. Desai, J. in his separate judgment, in para 735 inter alia said that a class which has benefited enormously by this justice delivery system has came into existence, and then rightly remarked Both, the judges and the lawyers failed to suitably revise the system to suit the needs of form of Government and egalitarian society with emphasis on social-economic justice." One wonders and poses a question as to whether have ever conceived even in their wildest possible imagination, that in free India, through the justice delivery system, it should be possible for the fortunate few (i.e. manufacturers) to commit a mistake, and for that mistake hard pressed middle class citizens and under previlaged, half class starving poor millions of the country should be made to suffer. Since that question does not ari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rious amounts remitted by the plaintiff to the defendant towards dues of the defendant, though of course under protest over years to be kept as deposits with the defendants till the controversy between the parties which was pending before the Supreme Court was revealed. Those documents are from Exs. 177 to 295. They show various amounts remitted from time to time by the plaintiff to the defendant towards octroi dues. By way of a specimen, we may refer to Ex. 288 which shows that an amount of Rs. 4,221.59 was sent by cheque by the plaintiff to the defendant in respect of demand of octroi dues from the plaintiff for the month of September 1958. It is seen that prior to 26-9-1960, the plaintiff used to send from time to time to the defendant various amounts by cheques towards octroi claim of the defendant. Merely because they were kept in a separate account, it cannot be said that payments were not made towards octroi claim of the defendant. It is also interesting to note that neither before the trial Court nor before this court, even a faint suggestion was made that the entire burden of the amount paid by the plaintiff to the defendant towards alleged claim of octroi dues of the defe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d permit pick pocketing under the cover of law. To put it plainly the question which are passed and required to be answered are : Is our system of laws such that it renders the court helpless and powerless and complete it is became an indifferent spectator to the fleeding of the pockets of the people? Not only that, does it further compel the court to sanction and protect the imperceptitle manner of pick pocketing of numerous unidentifiable consumers? Having observed as aforesaid, the court proceeded to deal with the basic requirements of Section 72 as found in Chapter V of the Contract Act and observed as under :- In cases falling under this Chapter, the basis of the obligation which may arise is not founded upon any contract or tort but upon a third category of law, namely, quasi-contract or restitution. English law on the subject was then discussed and having quoted observations in two such decisions, it was observed :- From this, it should be clear that the underlying object of Section 72 is that a person cannot retain the money of, or some benefit derived from another which legitimately does not belong to him and which it would be unconscienable to allow him to ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s borne by the mill company and that burden was not passed on to the consumers. In this connection, Section 72 of the Contract Act was considered by the Division Bench and it was observed that the term mistake has been used without any qualification or limitation whatever and comprises within its scope a mistake of law as well as a mistake of fact. It was further observed that the juristic basis of the obligation under Section 72 is not founded upon any contract or tort but upon a third category of law, namely quasi-contract or restitution. The object with which Section 72 is enacted is on the one hand to prevent unjust enrichment of person to whom money is paid or thing delivered by mistake or under coercion and on the other to restore money or a thing to its real or proper owner. In other words, the object of Section 72 is restoration of money or thing to be real or proper owner or reparetion of injury or making good any loss which might have been occasioned to the person making payment or delivering thing on account of money or delivery of thing by mistake or under coercion. No one can be allowed to enrich himself unjustly at the cost or the expense of another and it is with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide. We may state that the ratio of the aforesaid decision got a directly attracted to the facts of the present case. Here also, the plaintiff has not pleaded and proved that it has borne the entire burden of octroi duty paid by it to the defendant over years. It has nowhere even whispered in the plaint that octroi duty amount was not passed on to the consumers or the customers who had purchased the articles manufactured by the plaintiff. It is obvious that as a prudent businessman, the plaintiff which is a manufacturing concern would, while fixing the price of its commodity, take into account the octroi duty paid on the raw material imparted by it within the municipal limit which would go into making of the finished manufactured product. It also cannot be disputed and it was rightly not disputed that octroi duty paid on the raw material from which finished products are manufactured entered the cost structures of the plaintiff s finished products and that the same was shifted on to the purchasers of the plaintiff s products. It is easy to visualise that in normal circumstances, this duty amount would naturally be passed on to the consumers by way of fixing of price charged from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the defendant can succeed, it must be shown by the plaintiff that the plaintiff itself had borne the entire burden of the payment and refusing such relief would amount to unjust enrichment of the defendant at the cost of the plaintiff. This reasoning of the Supreme Court in the aforesaid decision which by necessary implication supports the ratio of the three Division Bench judgments of this court, puts beyond any pale of controversy, the question passed for our consideration in the present proceedings. We must, therefore, hold that in the present case, the suit as filed by the plaintiff did not disclose any cause of action and was liable to be rejected and dismissed as the basic requirements of Section 72 are neither pleaded nor proved by the plaintiff. As the Supreme Court decision in State of M.P. (supra) has taken the same view which was taken by the three Division Bench decisions of this court, there remains no occasion for us to consider the request of the learned Advocate for the plaintiff to refer this question to a larger bench of this court. Even otherwise, we respectfully concur with the ratio of the decisions of the three Division Bench of this court (supra) and we do n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s observed as follows :- According to the well settled theory of precedents every decision contains three basic ingredients : (i) finding of material facts, direct and inferential. An inferential finding of a facts in the inference which the Judge draws from the direct or perceptible facts; (ii) statements of the principles of law applicable to the legal problems disclosed by the facts; and (iii) judgment based on the combined effect of (i) and (ii) above. For the purpose of the parties themselves and their privias, ingredient No. (iii) is the material element in the decision for it determines finally their rights and liabilities in relation to the subject matter of the action. It is the judgment that estops the parties from reopening the dispute. However, for the purposes of the doctrine of precedents, ingredient No. (ii) is the vital element in the decision. This indeed is the ratio decidandi. It is not every thing said by a Judge when giving judgment that constitutes a precedent. The only thing in a Judge s decision binding a party is the principle upon which the case is decided and for this reason it is important to analyse a decision and isolate from it the ratio de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decisions of the Supreme Court referred to hereinabove, nothing more can be read, in the decisions of the Supreme Court in the case of Kanhaiya Lal (supra) except the correct meaning of the term mistake occurring in Section 72 of the Indian Contract Act. The Supreme Court has laid down the principles of law that the term mistake occurring in Section 72 of the Indian Contract Act taken within its sweep mistake of facts as well as mistake of law. To read anything more in this decision would be doing something which is not permitted by the Supreme Court itself. This conclusion of sure becomes apparent when we have a close look at this judgment of the Constitution Bench of the Supreme Court in Sales Tax Officer v. Kanhaiyalal, A.I.R. 1959 S.C. 135 (supra). The limited question before the Supreme Court in that case was as to whether the suit for refund of sales tax allegedly illegally collected from the plaintiff by the defendant was maintainable. Analysing Section 72 of the Contract Act. N.H. Bhagwati, J. (as he then was) speaking for the Supreme Court made the following observations :- Where it is once established that the payment, even though it be of a tax, has been made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be of any avail to the plaintiff for supporting its contention that in the absence of any pleading and proof also, such a suit can be decreed and such is the ratio of the decision of the constitution bench of the Supreme Court. In our view, there is no such ratio of the constitutional bench decision of the Supreme Court. It is interesting to note that on the point with which we are concerned, there is a direct decision of the Supreme Court in the case of State of M.P. v. Vyankatlal, A.I.R. 1985 S.C. 981 (supra) where it has been held that unless the plaintiff shows that non-granting of refund of duty would amount to unjust enrichment to the. defendant, the suit cannot be decreed. That decision has also considered the constitutional bench decision of the Supreme Court in A.I.R. 1959 S.C. 135. In that view of the matter, it would not be open to the plaintiff to contend before us that A.I.R. 1959 S.C. 135 takes a view which is in favour of the plaintiff on the facts of this case. 29. Our attention was then invited to the decision of a two member bench of the Supreme Court in the case of D. Cawasji and Co. v. State of Mysore, A.I.R. 1976 S.C. 813. In that case a writ petition was mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a discretion, having regard to the facts and circumstances of such case, not to entertain the application." Then follows the observations in paras 9 and 10 on which great reliance was placed by the learned Advocate for the plaintiff. We, therefore, deem it fit to extract the entire paras 9 and 10 of the report :- 9. We are aware that the result of this view would be to enable a person to recover the amount paid as tax even after several years of the date of payment if some other party would successfully challenge the validity of the law under which the payment was made and if only a suit or writ petition is filed for refund by the person within three years from the date of declaration of the invalidity of the law. That might both be inexpedient and unjust so far as the State is concerned. 10. A tax is intended for immediate expenditure for the common good and it would be unjust to require its repayment after it has been in whole or part expended, which would often be the case, if the suit or application could be brought at any time within three years of a court declaring the law under which it was paid to be invalid, be it a hundred years after the date of payment. Nor is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of D. Cawasji s and Company (supra) the controversy between the parties was with regard to the period of limitation within which the petition under Article 226 of the Constitution of India shouid have been filed. After referring to the provisions of Section 17(l)(c) of the Limitation Act, 1963, the Supreme Court has observed in para 8 of the judgment to the effect that a writ petition for refund of the tax within the period of limitation prescribed that is - three years from the date of the knowledge of the mistake would also lie. The Supreme Court also observed that if any writ petition is filed beyond a period of three years, it would always be proper for the court to consider that it is unreasonable to entertain that petition, though even in cases where it is filed within three years the court has a discretion having regard to the facts and circumstances of each case, not to entertain the petition. 31. Thereafter, what is observed in paragraphs 9, 10, 11 and 12 of the judgment was with a view to focussing the attention of the legislature to the present defective state of law in the country. What is stated and observed in these paragraphs did not pertain to the actual co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a mistake of law and realisation by the revenue authorities was also under a mistake. Therefore such sum should be refunded. This is recognised in the provisions of the Act as we have noted before. The principle of Section 72 of the Indian Contract Act has been recognised. It is obvious that the liability of the authorities who might have collected tax under a mistake of law to refund the same has been found to be flowing from Section 72, but the further question whether the dealer who was claiming such refund under Section 72 can maintain his claim without pleading and proving further ingredients of Section 72 viz. that he had suffered legal injury and prejudice and had borne the burden of the tax which entitled him claim refund from the authorities, was never canvassed before the Supreme Court for consideration nor was it in fact considered by the Supreme Court. The Supreme Court in the aforesaid decision only considered one aspect under Section 72 viz. liability of the authorities who have collected tax to refund the same but the question as to when it should be refunded and who are the persons who will be entitled to such refund was never passed for consideration before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the Supreme Court in D. Cawasji s case (supra) a binding ratio to the aforesaid effect which according to the learned Judge of the High Court was the law declared by the Supreme Court under Article 141 of the Constitution and even on the assumption that the observations in Cawasji s case (supra) were obiter in nature, they were held to be binding on the High Court. Now, we have already shown earlier while discussing D. Cawasji s case (supra) that the said decision of the Supreme Court does not contain any ratio to the effect that whether burden of tax is passed on to the consumers or not, once it is shown that it was illegally collected by the taxing authority, it had to be refunded to the person from when tax was collected. We have shown that the said decision did not consider the question whether tax had got to be refunded to the party from which it is collected even without showing that the party who claims refund had suffered any legal injury or not within the meaning of Section 72 of the Contract Act. We have also shows that Cawasji s case (supra) did not contain any obitor dicta on this aspect. In that view of the matter, reliance placed by the Division Bench of the Bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve discussed in details earlier, the ratio of the dp ins of the three Division Bench of this court which have, after elaborate consideration of various aspects of the matter centering round the legal requirements of Section 72 of the Contract Act, have taken the view that unless the concerned plaintiff shows that it has suffered legal injury or prejudice, it cannot, merely on the ground that tax alleged to have been recovered is shown to be illegally recovered, maitnain a suit for refund under Section 72 of the Contract Act. As such, the judgment of Shah, 3. in the aforesaid decision concurring with Lentin, 3. also cannot be of any assistance to the learned Advocate for the plaintiff. Various of the High Courts taking a contrary view as listed in para 16 of the report were just mentioned by the learned 3udge without discussing their ratio in detail and without considering how and why these decisions of the other High Courts taking a contrary view were not acceptable to the learned Judge who decided the aforesaid case. In our view, therefore, the above Bombay High Court decision cannot be of any avail to the learned Advocate for the plaintiff and in any case, we are not inclined to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Supreme Court in D. Cawasji s case (supra) and more is read therein then what actually emerges from it, as discussed earlier. Consequently, these judgments also cannot be of any assistance to the learned Advocate for the plaintiff as they fall in line with the Bombay decisions which as we have shown earlier, cannot advance the case of the plaintiff. 37. As a result of the aforesaid discussion, it becomes clear that the suit as filed by the plaintiff was ex-facie not maintainable and did not disclose completed cause of action and was liable to fail. The plaintiff having not pleaded and proved requisite requirements of Section 72 of the Contract Act was required to be non-suited. Only on this short ground and without considering other contentions canvassed for and against the case of the plaintiff, we deem it fit to set aside the decree as passed by the learned trial Judge in civil suit No. 76 of 1963 and we direct that the said suit shall stand dismissed with cost throughout. Consequently, first appeal No. 48 of 1974 will stand allowed accordingly. As the suit is dismissed, there is no question of giving any relief to the plaintiff in cross-objections claiming more reliefs ..... X X X X Extracts X X X X X X X X Extracts X X X X
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