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TMI Blog1986 (11) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... uld not be considered complete because the, fertilizer was not marketable. The department held that only when the fertilizer 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 the bags had taken place subsequent to 1-3-1969, the department had demanded and collected the excise duty. The petitioner-company had paid the demanded amount under protest during the period of March 1969 to July 1969. 2. 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 Tamilnadu 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 Co. Ltd. The Madras High Court, in W.P. Nos. 1746 and 1453 and 1676 of 1973 - 1978 E.L.T. (J18) held that the production was complete the moment the fertilizer was produced without waiting for the date of marketability. In Tamilnadu fertilizer p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. His final contention is that this court should not order refund of any excise duty collected by the State even though illegally, because the burden 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. 5. On the other hand, the successful writ petitioner argues that the limitation of Rule 11 of the Excise Rules applies only to the 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 Ramasubramanyam, 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 11-3-1977 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 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssistance for refund of those amounts which were illegally collected by the State from the petitioners. It is well accepted that the primary duty of the Courts is to enforce the Constitution 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 a 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re shown by the appellant and the respondent two judgments of the Supreme Court conflicting with each other. The appellant relied upon the judgment of the Supreme Court in State of M.P. v. Vyankatlal - AIR 1985 S.C. 901, wherein a Division Bench of the Supreme Court consiting a 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 Ramanaiah v. State of A.P. - 1986 (2) ALT 206. But the judgment of the Supreme Court in D. Cawasji Co. v. State of Mysore - 1978 E.L.T. (J 154) (S.C.), 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 liabilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, the relief to the petitioner under Article 226, in our opinion, can only be refused on the ground that granting of such relief would not be in the public interest. A Division Bench of this Court has taken that view in G.S.G.A. Company v. State of A.P. - 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 fertilizer to be imcomplete 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 fertilizer manufacturers were found entitled for 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 other. In the above circumstances, we are of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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