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TMI Blog2001 (1) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... nd in the writ petitions. We do not see any good ground or valid reason to interfere with the judgments and orders of the High Court impugned in these petitions. Hence the special leave petitions are dismissed. The parties shall bear their own costs. - S.L.P. (Civil) Nos. 4436, 4437 of 1998, 5241, 5242 of 1998, 12654 of 1998, - - - Dated:- 24-1-2001 - Judge(s) : S. RAJENDRA BABU., SHIVARAJ V. PATIL JJ. Indu Malhotra, H.K. Puri, S.K. Puri, Rajesh Shrivastava, Ujjwal Bannerjee and Mrs. Anindita Gupta, Advocates, for the respondents in S.L.P. (Civil) Nos. 4436 and 4437 of 1998. Altaf Ahmed, Additional Solicitor-General for India (Pradeep Misra and Indu Misra, with him), for the petitioners in S.L.P. (Civil) Nos. 4436 and 4437 of 1998. Dushyant Dave, Senior Advocate (Pradeep Misra and Indu Misra, Advocates, with him), for the petitioners in S.L.P. (Civil) Nos. 5241 and 5242 of 1993 and 12654 of 1998. Sudhir Chandra, Senior Advocate (Jayant Bhushan, Rebecca George, Achintya Dwivedi and Vijay Panjwani, with him), for the respondents in S.L.P. (Civil) Nos. 5241 and 5242 of 1998. JUDGMENT The judgment of the court was delivered by SHIVARAJ V. PATIL J.- -In al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the reasons that after collection, the amount has been paid to the State Government, which in turn has paid the amount to the Government of India; referring to the representations of the respondents it was stated that a reference had been made to the State Government in the matter and their reply was awaited; after the judgment in Saraswati Sugar Mills' case [1992] 1 SCC 418, entry 15 of Schedule I to the Act, was amended with effect from January 2, 1992 covering sugar industries and distilleries and making them liable to pay water cess under the amended provisions of entry 15 of Schedule I to the Act. In these petitions, we are not concerned with the said amended entry and the levy and collection of cess from January 2, 1992. The High Court, after considering the rival submissions and relying on a few judgments of this court, disposed of the writ petitions directing the petitioners to refund the sum realised from the respondents as water cess after verification of the amount stated to have been paid by them within the given time. Hence the petitioners have filed these special leave petitions. Shri Altaf Ahmed, learned Additional Solicitor-General appearing for the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s had become final was only technical. Shri Dushyant Dave, learned senior counsel for the respondents in Special Leave Petitions Nos. 5241-5242 of 1998 supporting the submissions made by the learned Additional Solicitor-General, added that writ petitions seeking writ of mandamus only for refund of the amount were not at all maintainable. He cited a few decisions in support of this submission. The arguments of the learned counsel for the respondents are already noticed above in Special Leave Petitions Nos. 4436-4437 of 1998. The learned counsel for the respondents in Special Leave Petition No. 12654 of 1998 submitted that when the petitioners did not make refund in spite of several representations a writ petition was filed and the same was disposed of on January 8, 1998 following the common judgment impugned in Special Leave Petitions Nos. 4436-4437 of 1998 and Nos. 5241-5242 of 1998. He submitted that the respondents had also paid the amount under protest and in the matter of refund the respondents stand on the similar footing as the respondents in other petitions. We have carefully considered the submissions made by the learned counsel for the parties. On the question of mai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clusion that it was possible for the appellant to know about the legality of the tax sought to be imposed as early as 1963, when the Act in question was declared ultra vires as mentioned hereinbefore. Thereafter, the taxes were paid in 1968. Therefore the claim in November, 1973 was belated. We are unable to agree with this conclusion. As mentioned hereinbefore the question that arises in this case is whether the court should direct refund of the amount in question. Courts have made a distinction between those cases where a claimant approaches a High Court seeking relief of obtaining refund only and those where refund is sought as a consequential relief after striking down of the order of assessment, etc. Normally speaking, in a society governed by rule of law taxes should be paid by citizens as soon as they are due in accordance with law. Equally, as a corollary of the said statement of law it follows that taxes collected without the authority of law as in this case from a citizen should be refunded because no State has the right to receive or to retain taxes or monies realised from citizens without the authority of law." In the para extracted above, in a similar situation as ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ground that tax/duty had been collected by misinterpreting or misapplying the provisions of the Central Excises and Salt Act, 1944 read with the Central Excise Tariff Act, 1985, or the Customs Act, 1962 and the Rules and Regulations or the notifications issued under such enactments. In such cases claims for refund had to be preferred under and in accordance with the provisions of the respective enactments before the authorities specified and within the period of limitation prescribed therein. Hence it was held that a petition under article 226 of the Constitution could not be entertained having regard to the legislative intention evidenced by the provisions of the said Act and the writ petition, if any, would be considered and disposed of in the light of and in accordance with the provisions of section 11B of the Central Excises and Salt Act, 1944 stating that power under article 226 has to be exercised to effectuate the rule of law and not to abrogate it. In the present cases there is no corresponding section to section 11B of the Central Excises and Salt Act, 1944 for making claim for refund of money and, therefore, the respondents could maintain the writ petitions under artic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sonable time from the date of the declaration that the law under which tax/cess was collected was unconstitutional. There is no good reason to deny the relief of refund to the citizens in such cases on the principles of public interest and equity in the light of the cases cited above. However, it must not be understood that in all cases where collection of cess, levy or tax is held to be unconstitutional or invalid, the refund should necessarily follow. We wish to add that even in cases where collection of cess, levy or tax is held to be unconstitutional or invalid, refund is not an automatic consequence but may be refused on several grounds depending on the facts and circumstances of a given case. Another reason to defeat the claim for refund put forth is that the respondents have filed writ petitions challenging unsuccessfully the validity of the levy in question and those orders have become final inasmuch as no appeal against the same has been filed. The contention is put forth either on the basis of res judicata or estoppel. It is no doubt true that these principles would be applicable when a decision of a court has become final. But in matters arising under public law when t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Bombay High Court on September 16, 1987, it was open to the petitioner to claim for recoveries and the same should have been made within a reasonable time thereafter. In ascertaining what is reasonable time for claiming refund, the courts have often taken note of the period of limitation prescribed under the general law of limitation for filing of suits for recovery of amount due to them. In the present case also that standard adopted by the High Court is the same in ascertaining whether there has been laches on the part of the appellant in seeking relief in due time or not. The finding clearly recorded is that long after the charges had been paid and law had been declared by the court, the writ petition has been filed and, therefore, such a refund should not be allowed. We do not think such a view taken by the High Court calls for interference under article 136 of the Constitution. Hence we dismiss the petition." It is clear from the said paragraph that a distinction is made between the claims made for refund where collection of tax was illegal and not authorised and the cases where rule had been struck down on the ground that it had been framed inarticulately and was not cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctice based on sound and proper exercise of discretion. Each case must depend upon its own facts. It will all depend on what the breach of the fundamental right and the remedy claimed are and how delay arose. The principle on which the relief to the party on the grounds of laches or delay is denied is that the rights which have accrued to others by reason of the delay in filing the petition should not be allowed to be disturbed unless there is a reasonable explanation for the delay. The real test to determine delay in such cases is that the petitioner should come to the writ court before a parallel right is created and that the lapse of time is not attributable to any laches or negligence. The test is not to physical running of time. Where the circumstances justifying the conduct exists, the illegality which is manifest cannot be sustained on the sole ground of laches." The argument that the relief should be denied to the respondents on the ground of delay and laches in approaching the High Court by filing writ petitions claiming refund is equally unsustainable. The claims for refund were made by the respondents within a reasonable time after the judgment was rendered by this cou ..... 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