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TMI Blog1978 (12) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... ive petitions. 2. As illustrative of facts, the case in W.P. No. 1526 of 1976 can be referred to. The petitioner is an Amalgamation of six companies and is a company incorporated under the Companies Act. The Buckingham and Carnatic Mills Unit of the petitioner company began manufacturing from the year 1963 yarn containing more than one synthetic fibre or yarn containing synthetic fibre and natural fibre or, in other words, blended yarn as known in trade circles. The blends of yarn manufactured by the petitioners are of the following types- Polyester Cotton 66-2/3% 33-1/3% 65% 35% 50% 50% 83-1/3% 16-2/3% Polyester Viscose 65% 35% 75% 25% **** Taking into consideration the rival contentions of the parties, the questions that need determination can be formulated as follows - 1. Can blended yarn be considered an excisable item prior to the introduction of Item 18E by the Finance Act of 1972 on 16-3-1972. 2. If it is not an excisable item, can the petitioners seek refund of excise duty collected before 16-3-1972 by filing writ petitions instead of suits ? and 3. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs for refund of excise duty collected under the Trade Notice of 1963 and the notification in 1964. The learned Judges of the Gujarat High Court have held as follows - "This new Item (blended yarn) manufactured by the company could never answer the description of purely synthetic yarn, cotton yarn or woolen yarn so as to be covered under entries 18 to 18B, and that is why the Legislature has introduced the new entry 18E under the Finance Act of 1972, to cover up such blended yarn when its use had become widespread in the country. A contract for supply of blended yarn could obviously be not discharged by mere supply of cotton yarn or mere supply of synthetic fibre yarn, because the customers are interested only in this particular blending". In another portion of the judgment they have held as follows - "Therefore, on no process of construction, this new blended yarn produced by the company could be treated as excisable item for the earlier period before the Finance Act of 1972, which introduce a clear unequivocal Item No. 18E to cover such goods which were produced by the mixture of two or more fabrics-man-made and natural. Therefore, the levy in the present case was clearly a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven fabric) composed of textile materials of different kinds, those materials are aggregated together for the purpose of classifying a similar product containing those materials mixed with others. For instance, a fabric composed of 40% discontinuous man made fibres, 35% woollen yarn and 25% fine animal hair does not fall within heading 56.07 (woven fibrics of discontinuous man made fibres), but comes under heading 53.11 (woven fabrics of wool or of fine animal hair), since the proportions of wool and of fine animal hair must, in this case, be taken in the aggregate...." 14. The further argument of Mr. Chengalvarayan was that Item 18E was not introduced to make blended yarn an excisable item for the first time in the year 1972, but was introduced with a view to bring uniformity in the matter of levy of duty on mixed yarn since it was capable of being assessed differently under item 18A or Item 18. The judgment of the Gujarat High Court, so the respondents counsel argued, cannot advance the case of the petitioners in any manner, because, in that case, no identification had been made about the qualitative content of the synthetic yarn and cotton yarn in the blended shape, but in all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .L.T. (154) AIR 1975 S.C. 813; 815 it was held that where a suit will lie to recover money's paid under a mistake of law, a writ petition for refund of tax within the period of limitation prescribed i.e., within three years of the knowledge of the mistake would also lie. Placing reliance on these authorities, the petitioners' counsel argued that the petitioners need not file suits and can seek appropriate reliefs by means of writ petitions. No doubt, under normal circumstances, this contention has to be accepted. But, in the instant case, this contention has to be accepted. But, in the instant case, the petitions have not been filed promptly. The First Trade Notice as well as the Exemption Notification which are impugned in these proceedings were issued in the years 1963 and 1964 respectively. Thereafter, Item 18E was introduced with effect from 16-3-1972. In spite of these things, the petitioners have come to court only in the years 1976 and 1977. The petitioners would say that they come to know of the mistake of law only when they received information about the judgment of the Gujarat High Court in S.C.A. No. 1958 of 1972 in 1976. The respondents would, however, say that the disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... known by the pronouncement of the Gujarat High Court in S.C.A. No. 1058 of 1972 and in terms of Sec. 17 (equivalent to Art. 96 of the old Act) of the Limitation Act of 1963, the petitioners have a limitation period of three years to file writ petitions or suits to ask for refund of tax. In support of this contention, Mr. Venugopal referred to K.S. Venkataraman and Co. Pvt. Ltd. v. State of Madras, AIR 1966 S.C. 1089-LX I.T.R. 112. In that case, the question of limitation has not been directly considered, but the majority judgment allowed the plaintiff's suit instituted on 23-3-1955 for getting refund of sales tax paid during the years 1948-49 and 1952-53. Mr. Chengalvarayan submitted that it is not known whether the plea of limitation was specifically raised in that case, and, secondly, the case was exclusively based on discovery of a mistake of law, whereas, in the petitions on hand, the discovery would be of mistake of fact as well as mistake of law, assuming there was such mistake. In view of my conclusion that the parties should canvass their respective cases before the civil court, it is unnecessary to give any finding in these petitions whether the claim of the petitioners i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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