The
Deputy Commissioner, Andaman District, Port Blair. Vs. Consumer Co-Operative
Stores Limited., Hari Narayan Arora [1998] INSC 597 (9 December 1998)
Sujata
V. Manohar, G.B. Pattanaik. Pattanaik. J.
The
these appeals the Judgment of the Division Bench of Calcutta High Court 31st of January, 1994 is
under challenge and the question for consideration is whether in view of
Andaman & Nicobar Islands (Amendment) Regulation, 1984 the respondents are
entitled to claim refund of the excise duty levied and paid. The further
question which arises for consideration is whether by application of the
principle of 'unjust enrichment' the said respondents can be denied of getting
the refund in question.
The
respondents had obtained licence to vend Indian made foreign liquor on the
basis of a public auction. The Chief Commissioner of Andaman & Nicobar
Islands issued a notification purporting to be one in exercise of powers
conferred under Rule 29 of Andaman Excise Rules, 1934 prescribing the rate of
excise duty payable by the licensees-respondent on such Indian made foreign
liquor. A licensee, Jagannath of Middle Point, Port Blair filed a writ petition
challenging the aforesaid notification and the notification was held to be
invalid as the Chief Commissioner had no power to levy the excise duty in
question. Against the Judgment of the learned Single Judge, an appeal was
preferred to the Division Bench but the said appeal was dismissed and the
Judgment of the Single Judge was confirmed. The Excise Authorities did raise a
contention before the Division Bench of the High Court that the licensees have realised
the amount from the customers and as such should not get the refund in question
but the said contention was negatived by the High Court. After the appeal was
dismissed, the amount realised from said licensee Jaganath was refunded. In
view of the aforesaid Judgment of the Division Bench of Calcutta High Court the
other licensees also applied for refund to the Excise Authorities but as no
action was taken thereon, writ petitions were filed. Those writ petitions were
disposed of with a direction to the Excise Authorities to pass final orders on
the application for refund. The Excise Authorities then took steps for
refunding the amount collected after complying with the formalities but before
the refund vouchers could be finally signed, a notification was issued on 1st
of September, 1984 by the president of India, promulgating the Andaman & Nicobar
Islands (Amendment) Regulation 1984, authorising imposition of excise duty w.e.f.
24th of October, 1973 on Indian made foreign liquor notwithstanding any
judgment, decree or order of any court.
In
view of the aforesaid amendment of the Excise Regulation, the Excise
Authorities of Andaman & Nicobar Islands rejected the prayer for refund of
the duty and the respondents then moved the High Court in writ petitions
challenging the legality of the amended provision and seeking a writ of
mandamus to the appellant to refund the alleged illegal levy collected by the
Excise Authorities. The Division Bench of the Calcutta High Court by the
impugned judgment came to hold that Section 31A of the Andaman & Nicobar
Islands (Amendment) Regulation, 1984 is ultra vires and Section 6(1) and 6(2)
of the Regulation are also invalid. On the question of applicability of the
principle of unjust enrichment the high Court came to the conclusion that there
is absolutely no materials to show whether the excise duty that was paid in
advance was consumed by the dealers by their margin of profits or not and it is
nobody's case that the excise duty was recovered as such from the purchaser by
the wine merchants. Consequently, the principle of unjust enrichment has no
application. With these conclusions, writ applications were allowed with the
direction that the amount collected as excise duty from the licensees be
refunded.
Mr. Nambiar,
the learned Senior Counsel, appearing for the appellants contended that in view
of Section 31A of the Amendment Regulation, 1984, the excise duty which have
been collected can be held to be a special duty under the amended provisions
and in view of the non obstante clause in Section 6 of the Amendment
Regulation, notwithstanding the earlier judgment of the High Court striking
down the notification dated 24th of October, 1973, the duty which had been
collected can be held to be a valid levy as special duty under Section 31A and,
therefore, the Excise Authorities had rightly refused the refund application
and High Court committed error in allowing the Writ Petition.
Though
the learned counsel had raised the aforesaid contention while beginning his
arguments but later on did not pursue the same being faced with the problem
that subsequent to insertion of Section 31A, no notification has been issued by
the Administrator in the Andaman & Nicobar Islands Gazette, specifying the
levy of special duty. Since issuance of a notification by the Administrator in
the Andaman & Nicobar Islands Gazette is a pre-condition for making any
levy under Section 31A and the said pre-conditon has not been satisfied, Mr. Nambiar,
the learned Senior Counsel, did not pursue his argument that the levy in
question can be held to be a valid levy as special duty contemplated under
Section 31A of the Amended Regulation of 1984.
Mr. Nambiar,
the learned Senior Counsel, however vehemently argued that even if the levy can
be held to be not authorised by law but the same having been collected, the
licensees are not entitled to refund of the same and the said relief can be
rejected by applying the principle of unjust enrichment. In support of his
contention he placed reliance on the decision of this Court in State of Madhya Pradesh v. Vyankatial and Anr. 1985(2)SCC
544 and the Constitution Bench decision of this Court in Mafatlal Industries
Ltd., vs. Union of India 1997(5)SCC 536. In the first case the Court held that
the burden of paying the amount in question was transferred by the respondents
to the purchasers and, therefore, the respondents were not entitled to get
refund and only the persons on whom lay the ultimate burden to pay the amount
would be entitled to get a refund of the same. In the aforesaid case under the
Madhya Bharat Sugar Control Order, 1949, the supply price of sugar had been
fixed higher than its ex-factory price and the sugar factories were directed to
credit the difference to a fund called "sugar fund". the validity of
the said notification could not be sustained in the Supreme Court but all the
same no refund was allowed on the finding that the burden in question had been
transferred to the purchasers. In Mafatlal's case 1997(5) SCC 356, the majority
judgment dealing with the question of unjust enrichment held:
"The
doctrine of unjust enrichment is a just and salutary doctrine. No person can
seek to collect the duty from both ends. In other words, he cannot collect the
duty from his purchaser at one end and also collect the same duty from the
State on the ground that it has been collected from him contrary to law. The
power of the Court is not meant to be exercised for unjustly enriching a
person." The principles underlying the doctrine of 'unjust enrichment' as
culled out from the aforesaid two decisions will have no application to the
case in hand, in view of the findings arrived at by the High Court on
consideration of the entire materials on record that it is nobody's case that
the excise duty was recovered from the purchaser by the wine merchants. Since
the burden has not been passed on to the purchaser as found by the High Court
and the levy having been held to be unconstitutional, the State would not be
entitled to resist the claim of refund by application of doctrine of 'unjust
enrichment'. We, therefore, do not find any infirmity with the directions of
the High Court to refund the illegal levy collected from the respondents.
'The
appeals accordingly fail and are dismissed, but in the circumstances of the
case, there will be no order as to costs.
It was
submitted before us that the entire amount has been deposited in Court. If that
be so, the respondents-licensees will be entitled to receive the amount from
the High Court.
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