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TMI Blog1984 (9) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... g special leave. The first respondent, in exercise of the power conferred under Rule 8(1) of the Central Excise Rules, 1944, for short, "the Rules", issued the Notification No. 162/81-C.E., dated September 11, 1981, deleting the words "including flush doors" from Item 16-B. It was published in the Gazette and the Collector, Central Excise, Guntur communicated on October 2, 1981, to all concerned. The petitioner in the meanwhile, by his application dated May 11, 1981 requested the Assistant Collector, Central Excise, fourth respondent to refund the difference of the duty. Thereon the fourth respondent issued a notice dated September 16, 1981 to show cause why the refund claim should not be rejected. Pursuant thereto, the petitioner submitted the explanation on October 29, 1981 and requested for personal hearing which was given. After consideration on merits, the fourth respondent held that Section 11-B of the Act which came into force from November 14, 1980, prescribed a period of six months from the date of payment of duty, and the claim is barred by limitation under sub-section (1) of Section 11-B of the Act. Accordingly, the claim for refund was rejected. It was confirmed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nding Counsel for the Central Government has fairly conceded that though the jurisdiction of the Courts was ousted by operation of sub-section (5) of Section 11-B of the Act, it has no effect on the exercise of jurisdiction under Article 226 and in appropriate cases, writs or orders could be issued. But in this case, that jurisdiction cannot be exercised for the reason that the petitioner had already invoked the jurisdiction of the authorities. The authorities are not bound to grant the relief under Section 11-B if the claim for refund is made after six months from the date of payment of the duty. Admittedly, the claim was made beyond six months. Therefore the authorities have rightly rejected the claim for refund. In support thereof, he relied on Burmah Construction Co. v. State of Orissa - AIR 1962 S.C. 1320 and Incheck Tyres Ltd. v. Assistant Collector - 1979 E.L.T. 236 (Cal.). He further contended that the Amendment was made by the Legislature with a view to prevent the manufacturer or producer to have unjust enrichment on refund of the amount. While exercising the jurisdiction under Article 226 that principle has to be kept in view. He distinguished the decisions relied upon b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ged and they were allowed to become final. Preceding Section 11-B of the Act, Rule 11 of the Rules was operating the claim for refund and the limitation prescribed thereunder is three months from the date of payment of excise duty or adjustment as the case may be. It was held that the said limitation applies only to the authorities under the Act and the High Court is not bound by it. (Vide Associated Bearing Co. Ltd. v. Union of India - 1980 E.L.T. 415 (Bom.) (D.B.). 6. It is well settled that Rule cannot control the operation of the main provisions in the Act. Stream can rise no higher than the source. Therefore, the Customs, Central Excises and Salt and Central Boards of Revenue Amendment Act 25 of 1978 was made by the Parliament. It received the assent of the President on 6-6-1968. The Act was published in the Gazette of India on June 7, 1978. It has come into force with effect from November 17, 1980, vide Notification No. 182/80-C.E., dated November 15, 1980. Section 21 of the Amendment Act introduces Sections 11-A, 11-B, and 11-C under the Act. Section 11-A empowers the State to recover the dues not levied or not paid, or short levied or short paid or erroneously refunded in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o duty or their exemptability, yet when such goods were assessed to duty and levy was collected, the claim for refund of the duty in respect of such goods also shall be made only under Section 11-B. The adverb "also" manifested the Legislative intent meaningful in clear and unequivocal terms i.e., in respect of exigible as well as non-exigible goods the claim for refund shall be made only under Section 11-B. (7) In respect of all the claims the jurisdiction of any Court is expressly ousted. Thereby the Legislature appears to have intended that Section 11-B is a complete Code in itself. A reading of Sections 11-A and 11-B shows that for the claims of the State five years period was prescribed and for the assessee limited to six months. 7. It is not disputed that exclusion of the jurisdiction of any Court for the purpose of Section 11-B does not apply to the jurisdiction under Article 226 of the Constitution. It is now well settled that no Legislature can place any fetters inhibiting or whittling down the power conferred under Article 226 of the Constitution or take away by any Act of Legislation. (If any authority is needed, refer to the latest one being Union of India v. A.V. N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ji and Co. v. State of Mysore (supra). In State of Madhya Pradesh v. Bhailal Bhai - AIR 1964 S.C. 1006, Das Gupta, J. speaking for the unanimous Court held that Article 226 empowers to give relief by way of enforcement of fundamental rights and other statutory rights by issuing appropriate writs to give consequential relief by ordering payment of money realised by the Government without authority of law. Under Article 265 of the Constitution, the State has no power to levy or collect tax except by authority of law. It was further held that the Limitation Act does not apply to the granting of relief under Article 226. The time fixed by the Ligislature may ordinarily be taken to be a reasonable standard (vide para 21). In D. Cawasji case (supra) Mathew, J. held that where a suit lies to recover money paid under mistake of law, a writ petition for refund of tax within the period of limitation 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 mistake of law, the Court has to see that the starting point of limitation is from the date on which the judgment declaring as void the particular law under which th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tation Act, 1963 and held : "It is not disputed that the High Courts have power, for the purpose of enforcement of fundamental rights and statutory rights, to make consequential orders for repayment of money realised by Government without the authority of law under Article 226 of the Constitution. This is an alternative remedy provided by the Constitution in addition to but not in suppression of the ordinary remedy by way of suit in the absence of any provision which would bar such a suit either expressly or by necessary implication. While there are different periods of limitation prescribed for the institution of different kinds of suits by the Limitation Act, 1963, there is no such period prescribed by law in respect of petitions filed under Article 226 of the Constitution." (Emphasis supplied) The relief of refund from the date of filing of the writ petition was granted. Therein the amendment did not come up for consideration. 12. Thus, it is now well settled that the State cannot place any fetters or inhibitions or impediments for an aggrieved person to approach the Court under Article 226 of the Constitution. The power given under Article 226 is of wide amplitude, of cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee years. We proceed that Section 11-B is constitutionally valid. Therefore, the question is what is the effect of Section 11-B? Whether this Court in exercise of the power under Article 226 could ignore the statutory intendment ? Whether still exercise the power under Article 226 relying upon the limitation of three years prescribed under the general law of the Limitation Act, though barred under Section 11-B(1) of the Act ? Whether such exercise of power would not frustrate the object of the Amendment Act and render it surplusage ? Would it be feasible for this Court to trample the law under its foot of power to grant relief of refund untramelled by the legislative animation aroused by Section 11-B? are some of the important questions which pose for consideration. As stated earlier, Mr. Srinivasa Murthy banked heavily upon the Division Bench decision of the Bombay High Court in Leukoplast case (supra). 14. Procedural Rights : No person has a vested right in a particular remedy for enforcement of a right. Equally, no person has a vested right in any particular forum. Procedure could be altered by a competent Legislature with retrospective effect unless there is some good reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot only expressly excluded by such special or local law." Thereby Section 29(2) of the Limitation Act excludes the application of the period of limitation provided in the schedule to a law provided by a special or local law. The question is whether Section 11-B(l) is a special law ? 16. In Kaushalya Rani v. Gopal Singh - AIR 1964 S.C. 260 the question arose was whether limitation provided under Section 417(4) of the Code of Criminal Procedure, is a special law within the meaning of Section 29(2) of the Limitation Act, 1908. Their Lordships considered this question and Sinha, C.J. speaking for the Court held in paragraph 7 thus : "A 'special law' therefore, means a law enacted for special case in special circumstances, contra-distinction to the general rules of the law laid down, as applicable generally to all cases with which the general law deals. In that sense, the Code is a general law regulating the procedure for the trial of criminal cases, generally; but if it lays down any bar of time in respect of special cases in special circumstances like those contemplated by Section 417(3) and 417 (4) read together, it will be special law contained within the general law. As the L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incidence will always be on the consumer, as held by Subbha Rao, J. (as he then was) speaking for the Court in R.C. Jall case (supra). Thereby the burden of incidence of tax is thus passed on by the manufacturer or producer to the consumer. He did not bear any burden of the tax. By ordering refund, the benefit of refund of excise duty must normally go to the consumer but not the intermediary manufacturer or producer. It is common knowledge that in the case of collection of indirect tax when it is found to be unconstitutional and refund is ordered, invariably the consumer would remain unidentified or even if it is possible to identify, his chance to get back the refunded amount is a remote one since by then the consumer may not preserve the evidence of purchase made from the producer or manufacturer to whom the refund is ordered. As a result, the producer or manufacturer retains the benefit and get the windfall of money refunded for which he has no legal right, title or interest and thereby he gets an unjust enrichment. 19. The need to make amendment : It is now well settled by catena of decisions of their Lordships of the Supreme Court starting from Kanhaiyalal case (supra) that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 46 and 38 of the Constitution to secure justice, social, economic and political for example fundamental right to permanent residence so as to transcend all sections of the society to lead good life fostering "dignity of individual under a legal order" leading to unity and integrity of the nation." 21. The need for funds : In B. Tripurasundaramma v. State of A.P. - 1984-1 A.P.L.J. 55 one of us (K. Ramaswamy, J.) considered the need of the State for funds in the context of its priority of crown debts over unsecured creditor, and while upholding the priority, held : "In a Democratic Socialist Republic, State must have the primacy for its debts when it is charged with the duty to transform the Socialist Republic into a reality within the constitutional framework and to meet frequent devastation done due to natural calamities, etc. The State must therefore be in possession of enough funds. This consideration and wisdom necessitated to concede to the State priority to its debt. The founding fathers of the Constitution directed the State to unravel the economic inequalities among its people assuring in Part III equality and justice, social and economic, etc. and to bring them to frui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity of income amongst individuals vary widely. The faith of the people is the saviour and succour for the sustenance of rule of law. Any weakening of that link will rip apart the edifice of justice. The endeavour has to be to meet that just expectation of those who repose their faith in Courts, not merely the swindlers and contraveners who frequently resort to writ proceedings for gain or to escape law and often times steal a march over old cases that patiently await adjudication for early hearing. This case is an instance. The writ petition was filed on 21-2-1984 and was taken up for hearing on 7-8-1984. The payers of tax are getting disillusioned in their faith in Courts being helpless spectators, to see that the intermediary are securing unjust enrichment at their expense, though the latter bear no burden nor had any right or title to it. Section 2 of the Constitution 44th Amendment Act, 1978, denuded the primacy of the property right occupied in Part III relegating it to be a "statutory right" under Article 300-A which could be deprived of by authority of law. The right to refund being the creature of the statute, could be taken away by an Act of competent Legislature. Article ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e years and then to launch litigation and be not a parasite in the society"; Attempted : (c) to quench the unsatiable crave for more of "any person" turning him down after six months saying that "Look you over-stepped the nautical point, you are stripped off your authority henceforth and thereby became a trespasser, sagacity dictates you to roll up the net though managed to spread upto three years point; close your widely opened mouth; be satisfied with the unclaimed fish thus far caught"; (d) Attempted to remove the baneful and pernicious effect on the (1) edifice of justice and (2) society as a whole; (e) Presumptive evidence furnished to the Parliament that the Constitutional Courts (Supreme Court and High Courts) had already adopted the prescription of the general law of limitation as their base to grant the relief under Articles 32 and 226 of the Constitution, enacted special law of limitation on the faith that these Courts now too, respecting the will of he elected representatives of the people, may substitute it in the place of general law; as a part of the process precluded any court, to enter into this arena since applicability of the Contract Act and Limitation Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istrator, Municipal Committee, Ludhiana - AIR 1963 S.C. 1547 and Premier Automobiles v. K.S. Wadke - AIR 1975 S.C. 2238. Bhagwati, J. in Kanwarlal Gupta v. Amar Nath Chawla - (1973) 2 SCC 646 considering the necessity under Section 77 of the Representation of Peoples Act to impose ceiling on election expenses and implied authority of agent to spend on behalf of the candidate held that the background of the need for Section 77 must inform the Court in the interpretation of this vital and significant provision in the election law of our country and this is the only reasonable interpretation of the provisions which would carry out its object and intendment and suppress the mischief and advances the remedy by purifying our election process and binding it of the pernicious and baneful influence of big money. 33. The scope of the validation of the amendment was considered and upheld by their Lordships of the Supreme Court in Sri P.C. Mills v. Broach Municipality - AIR 1970 S.C. 192. Therein, Hidayatullah, C.J. speaking for the Constitutional Bench held thus : "A Court's decision must always bind unless the conditions on which it is based are so fundamentally altered that the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xing statute." Therefore, let us see how the Bombay Bench in Leukoplast case (supra) relied on by Sri Srinivasa Murthy has approached the problem. It is true that the Division Bench speaking through Gadgil, J. did take note of Section 11-B(5) but held at page 2010 thus : "It would thus be clear that Section 11-B would not come in the way of the petitioner for claiming a refund, if sub-section (5) is omitted from consideration. (Emphasis supplied) Having thus omitted, went on to consider the pre-existing interpretation given to Rule 11 of the Rules prior to the amendment by several Division Benches of that Court, viz., Associated Bearing Company Ltd. v. Union of India - 1980 E.L.T. 415; Wipro Products Ltd. v. Union of India - 1981 E.L.T. 531, and laid down that the law thereunder would govern the case by omitting sub-section (5) of Section 11-B and the Court, under Article 226 has power to grant refund. Sri K. Jagannadha Rao contended that the learned Judges instead of considering the effect of Section 11-B, omitted it and took shelter under the power of the Court under Article 226 to grant refund relying on the pre-existing law, and that approach is not correct. We find consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Collector (supra) was knocked of their bottom rendering little assistance to the petitioner. 40. No doubt, Mr. Srinivasa Murthy placed reliance on a Division Bench decision of this Court in Kesoram Cements, Basantnagar v. Union of India (supra). In that case, the payment was made under protest, directly attracting the proviso to sub-section (1) of Section 11-B. Therefore the ratio laid down therein has no application to the facts in this case. 41. The result of the above discussion leads to the following conclusions. The Legislature is competent to alter the law declared by Courts by legislative fiat giving new meaning by suitable structural alteration in the statute. There is liberal presumption of its validity, and change in the legal rights. The Legislature is competent to create rights prescribe procedure and limitation for enforcement. The will of the legislature is the supreme law and it must always prevail. It is to be given effect to without scanning its wisdom or policy and without adding, omitting or implying anything inconsistent with the Statute. If a Statute intended to embody a particular branch of law, it is to be given effect to without whittling down its eff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sought for the enforcement of the provisions of the statute and, in that context, since limitation is one of the criteria, their Lordships have held that the relief could not be granted when it was barred. In our view, Sri Srinivasa Murthy is justified in distinguishing the ratio laid down therein and is of no help to the respondent. 46. Writ of mandamus, in form, is a command directing the State, any authority, tribunal or a person requiring to carry out the duty specified by the Statute or to abstain from doing contrary to what was enjoined to be done. The authority under the Act is bound by the law in discharge of the duties enjoined in Section 11-B(5) read with Section 11-B(1) and they have to obey the law. In Narinder Chand v. U.T., Himachal Pradesh - AIR 1971 S.C. 2399 it was held that no mandamus could be issued to refrain from enforcing a provision of law. Sri Srinivasa Murthy contends that the issue of a mandamus is an innocuous prayer and it could be granted directing the authorities to refund the money. In this context it is of necessity to remember that the trick of the pleadings or the comouflage of the relief sought for are not conclusive and the substance thereof i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interference. Accordingly, we dismiss the writ petition, but in the circumstances, without costs. 49. After the dismissal of the writ petition yesterday, Mr. K. Srinivasa Murthy, learned Counsel for the petitioner made a request to post the matter for arguments as regards leave the appeal to the Supreme Court. The matter is therefore posted today. 50. Mr. Srinivasa Murthy made an oral application under Article 134-A of the Constitution seeking leave to appeal to the Supreme Court. 51. Mainly we have treked on and our conclusions have been stemmed from the decisions of the highest Court of the land referred to in our judgment. Our zone of consideration is, thereby, one of application of the law laid down by the Supreme Court. Article 133(1) of the Constitution postulates that where the High Court is of the opinion that the case involves a substantial question of law of general importance which in its opinion needs to be decided by the Supreme Court, a certificate may be granted. 52. Mr. Srinivasa Murthy relied upon a decision of the Supreme Court in The State Bank of India v. N. Sundara Money- AIR 1976 S.C. 1111 and stated that in view of the difference of opinion of this C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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