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TMI Blog1986 (11) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... er so produced was loaded into bags and was made marketable, its production should be deemed to be complete. Till then, fertilizer should be deemed to have been produced. As the loading of the fertilizer into bags had taken place subsequent to March 1, 1969, the Department had demanded and collected the excise duty. The petitioner-company had paid the demanded amount under protest during the period March, 1969, to July, 1969. It appears that the excise authorities, according to this view of the matter, had collected excise duty from the fertilizer manufacturers of the State of Tamil Nadu also. The validity of such imposition of excise duty and collection of the same by the Department on the basis of the test of marketability was successfully challenged in the Madras High Court by E.I.D. Parry Limited and Shaw Wallace and Co. Ltd. The Madras High Court, in W. Ps. Nos. 1746, 1453 and 1676 of 1973, held that the production was complete the moment the fertilizer was produced without waiting for the date of marketability. In Tamil Nadu, fertilizer produced prior to March 1, 1969, was, therefore, held not liable to any excise duty. Accordingly, those writs have been allowed by the Mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... den of excise duty being an indirect tax must have been passed on to the consumer and that, therefore, the writ petitioner cannot be said to have suffered any loss. On the other hand, the successful writ petitioner argues that the limitation of rule 11 of the Excise Rules applies only to claims made to the Department for refund of excise duty collected and not to the writ petitions or to the suits filed in the, civil court. Sri Ramasubrahmanyam, learned counsel for the petitioner, argues that the writ petitioner had come to know of the invalidity of the collection only by and through the judgment of the Madras High Court delivered on March 11, 1977, and that the present writ petition which has been filed within a few months thereafter is well within time. In reply to the second contention of the appellant, the petitioner's answer is that this plea of the appellant, which has not been raised before the learned single judge, ought not to be permitted by this court to be raised, as the petitioner will otherwise suffer grave prejudice. In reply to the third contention of the appellant, the petitioner argues that the judgment of the Supreme Court in D. Cawasji and Co. v. State of Mys ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the laws without taking into account any other consideration. The old saying that justice should be done even if the heavens fall, represents this ideal of justice. Normally, therefore, an amount of money collected by the State illegally and unconstitutionally from the petitioner by the use of State force should be ordered by the court to be refunded and restored. But, judicial decisions have admitted several exceptions to the application of this principle. It has been said that the direction to refund an illegally collected amount of money after a lapse of long number of years might cripple the working of the Government and might work to the disadvantage of the public. From that point of view, the courts have taken pragmatic view of the matter and laid down that the stale claims for refund of taxes illegally collected which would be held to be barred in civil suits filed for recovery of the illegally collected amounts should also be held to be barred under article 226 of the Constitution although that article does not lay down any such rule of limitation. Considering the matter from the above point of view, the explanation offered by the writ petitioner that he had come to kno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . V. Vyankatlal [1985] AIR 1985 SC 901, wherein a Division Bench of the Supreme Court, consisting of Murtaza Fazal Ali and R. B. Misra JJ., held that an amount of money collected by the State illegally as sugar fund from the writ petitioner should not be directed to be refunded, because the burden of paying the amount in question was shifted by the writ petitioner to the purchasers and, therefore, the writ petitioner was not entitled to get a refund and that only the person on whom lay the ultimate burden to pay the amount would be entitled to get a refund of the same. This judgment, which is based upon the theory of unjust enrichment, was followed by this court in Ramaiah v. State of A. P. [1986] AIR 1986 AP 361 ; 2 ALT 206. But the judgment of the Supreme Court in D. Cawasji and Co. v. State of Mysore [1975] AIR 1975 SC 813, has laid down a directly contrary proposition by holding that the court would not deny refund of tax even if the person who paid it has collected it from the customers and has no subsisting liability or intention to refund it to them or for any reason it is impracticable to do so. According to the judgment of the Supreme Court in D. Cawasji and Co. v. State o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat granting of such relief would not be in public interest. A Division Bench of this court has taken that view in Gurram Sreeramulu, Garlapati Anjaneyulu and Co. v. State of A.P. [1972] 30 STC 120. The question then would be whether it would be in promotion of justice in a case like this to deny the refund to the writ petitioner. In answering that question, we must first remember the naked and wholly arbitrary character of the illegal collection of excise duty by the Department which, without any semblance of legal authority, treated the manufacture of fertiliser to be incomplete without its being packed and stitched and made marketable. We must also note the fact that the Department had allowed the judgment of the Madras High Court to become final and had thereby allowed a situation to develop wherein a large number of fertiliser manufacturers were found entitled to the refund of this money. We cannot find any sound reason why one manufacturer alone out of several manufacturers should be compelled to pay an impost or tax which cannot be legally collected from the others. In the above circumstances, we are of the opinion that justice demands that the petitioner should also be acco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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