Judgment

SHELAT, J.: - At all material times, the appellant-company acted as the sole distributing agent in India for the products of M/s. Sawyer s Inc., Portland, U.S.A., and as such used to import View-master stereoscopes, reels etc. The customs authorities used to levy import duty on the basis of the invoice price under Section 29 read with S. 30 of the Sea Customs Act, 1878 as being the real value of the goods so imported.

2. During the year 1954-55, the appellant company imported several items set out in Annexure D to the appellant s special leave petition, the details of which it is not necessary to set out here. When items 1 and 2 arrived in Bombay port, the customs authorities, ignoring their hitherto followed practice, refused to accept the invoice price as the real value and levied excess duty in the aggregate sum of Rs. 1356. An appeal to the Customs Collector failed whereupon the appellant-company lodged a revision application before the Government of India.

3. Pending the disposal of the said revision, several other items set out in the said annexure D arrived in Bombay port, in respect of which the Customs, refusing to accept their invoice price, charged the appellant-company with excess amounts as import duty. For fear that demurrage charges would have to be incurred, the appellant-company paid the excess duty charged as aforesaid, but under protest.

4. On March 20, 1957, the Government of India disposed of the said revision, accepting the appellant s contention, and directed reassessment of import duty on the said two items 1 and 2 on the basis of their invoice price and also ordered refund to the appellant-company of the excess duty charged on them.

5. It would seem that since the said revision was pending before the Government of India, the appellant-company thought that the Customs would follow the principle which would be laid down in the decision in the said revision. The appellant-company, therefore, abstained from filing appeals in respect of the other items, which had arrived pending the decision of the said revision although the Customs had levied excess duty thereon. On the said revision being disposed of and the Government having therein ordered refund, the appellant company applied for refund of the excess duty charged in respect of some of the items, viz., items 22 to 29 and 33-35. This was done under S. 40 of the Act and within the period appointed therein. The customs granted refund on the aforesaid items 22 to 29 and 33-35, although invoice value thereof had not been accepted, and excess duty had been charged. The customs authorities, however, declined to refund the excess duty in respect of the rest of the items. The reason given for such refusal was that the application for refund in respect of those items had not been made within the time prescribed by Section 40. An appeal to the Collector and a revision before the Government of India against the said refusal to grant refund were both rejected, the refusal by the Customs appraiser being confirmed on the ground that refund was not applied for in time under Sec. 40.

6. The appellant-company thereupon filed a writ petition in the High Court of Punjab (at Delhi) under Art. 226 of the Constitution pleading inter alia that:

(a) Section 40 of the Act had no application,

(b) the Union of India was not entitled to appropriate or retain the said excess duty,

(c) the appellant company had a legal right to the return of the said excess duty, and

(d) that there was an error apparent on the record in the orders refusing return of the excess duty.

The appellant-company on these pleas prayed that the said orders of refusal should be quashed and an order should be passed directing return of the excess duty.

7. In para 16, sub-paras (i) and (j) of its return the Union of India averred as follows:

"(i) With reference to Cl. (1) of para No 16 of the petition, it is correct that the Government of India cannot appropriately retain whatever they are not legally entitled to