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TMI Blog1980 (3) TMI 96X X X X Extracts X X X X X X X X Extracts X X X X ..... trial court. The defendant's appeal is registered as No. 5 of 1978. 2. The facts of the case are that the plaintiffs firm M/s. Shiv Steel Works, Falna, carries on the business of rerolling and making iron, angles, bars etc., from ingots purchased by them from third parties. It is alleged that in January, 1972, the Inspector, Central Excise, Rani, while inspecting the premises of the plaintiff's factory, realised excise duty to the tune of Rs. 2,850.75 on 38.010 kg. angles manufactured by the plaintiffs. The plaintiffs' case is that they paid in all excise duty totalling Rs. 1,53,002.35 paise during the period 21-1-1972 to 28-2-1974. However, the High Court of Allahabad held in M/s. Bansal Steelsons Co. Pvt. Ltd. v. Union of India and others (decided on 18-1-1974) - 1979 (4) E.L.T. (J 262) that so long as Notification No. 206/63-C. and 123/65-C of the Central Government were in force, no excise duty was leviable on Iron and Steel products falling under sub-item i.e., of Item No. 26-AA of the First Schedule of the Central Excises and Salt Act, 1944 (hereinafter referred to as the Act). The plaintiffs alleged that they came to know about the aforesaid judgment in February, 1976 tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Government or such officer a month's previous notice in writing of the intended proceeding and of the cause thereof after the expiration of three months from the accrual of such cause." RULE : 11. "11. No refund of duties or charges erroneously paid, unless claimed within three months :- No duties or charges which have been paid or have been adjusted in an account current maintained with the Collector under Rule 9, and of which repayment wholly or in part is claimed in consequence of the same having been paid through in advertence, error or misconstruction, shall be refunded unless the claimant makes an application for such refund under his signature and lodges it with the proper officer within three months from the date of such payment or adjustment, as the case may be." RULE : 173-J. "173-J. Time limit for recovery of short levy or refund of excess levy. The provisions of rules 10 and 11 shall apply, to the assessee as if for the expression 'three months', the expression 'One year' were substituted in those rules." In Union of India v. Maharaja Shri Umed Mills Ltd., Pali—1973 Tax. L.R. 2488, it was held that the words "anything done or ordered to be done unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e plaintiffs had filed a suit for recovery of the amount paid by him to the defendant Union of India on account of excess duty on soap. When the plaintiffs came to know of the exemption, it applied for refund of the amount which had been paid by it to the defendant as excise duty by mistake. The application for refund was rejected by the Assistant Collector and an appeal to the Central Excise Collector and a revision application before the Joint Secretary, Ministry of Finance also failed and thereafter the plaintiff instituted the suit for recovery of the amount after due service of notice under section 80, Code of Civil Procedure. The trial court dismissed the suit as barred by limitation under section 40(2) of the Act. The learned Judges held that the suit cannot be said to be a suit in respect of anything done or ordered to be done under the Act and, consequently, section 40 (2) does not operate as a bar to the suit and the special period of limitation provided therein has no application to the case. 11. In Sales Tax Officer, Banaras v. Kanhaiyalal Makundlal - AIR 1959 S.C. 135 it was observed that where it is once established that payment of tax has been made by a party who w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scovered it. In a case where payment is made under a mistake of law as contrasted with a mistake of fact, generally the mistake becomes known to the party only when a court makes a declaration as to the invalidity of the law. Though a party could, with reasonable diligence, discover a mistake of fact even before a court makes a pronouncement, it is seldom that a person can, even with reasonable diligence, discover a mistake of law before a judgment adjudging the validity of the law. 15. Therefore, where a suit will lie to recover moneys 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. For filing a writ petition to recover the money paid under a mistake of law this court has said that the starting point of limitation is from the date on which the judgment declaring as void the particular law under which the tax was paid was rendered, as that would normally be the date on which the mistake becomes known to the party. 16. We are, therefore, of opinion that even if the starting date is considered as the date of the judgment of the Allahabad High Court, ..... 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