The doctrine of unjust enrichment is not a bar to refund of tax collected without authority of law. The Court can mould relief to prevent unjust enrichment.

JUDGMENT - C. MOOKERJEE, C.J.:---This writ petition had come up for final hearing before Ashok Agrawal, J. The learned Single Judge was of the view that the levy and collection of excise duty by the respondents upon the photographic printing papers manufactured by the petitioner No. 1 New India Industries Ltd. according to the price charged by its sole distributor Agfa Gevaert (India) Ltd. was illegal and unauthorised. The respondents had opposed the petitioners' claim for refund of excise duty, inter alia, on the ground that the petitioner No. 1 had already passed on the burden of the said duty. Therefore, the petitioners ought not to be allowed to unjustly enrich themselves by obtaining an order for refund. In view of difference of opinion on the said question between different Benches of this Court, Ashok Agarwal, J., has made the present Reference for deciding the following question :--

"Where the tax admittedly or has been held to be levied and collected by the State without the authority of law, whether refund of the tax must be granted to the assessee or applying the principle of 'unjust enrichment' no refund should be made to the assessee unless he can pass on the benefit to the ultimate consumer?"

2. We may first briefly refer to some of the reported Division Bench decision on this point. The said point of unjust enrichment was, for the first time, raised by the revenue authorities in this Court in the case of (Ogale Glass Works Ltd. v. Union of India)1, 79 Bom.L.R. 37 . In the said case, Deshpande and Mukhi, JJ., both held that assessment of excise duty by including the cost of packing in the price of the product was illegal. The two learned Judges who delivered separate judgments gave slightly different reasons for rejecting the claim made by the petitioner of the said case for refund of excise duty paid by it from the year 1962 upto the year 1972. Mukhi, J., inter alia held that the petitioner having already collected the duty from its customers it would be unjust to grant refund to it. According to Deshpande, J., in the case of (D. Cawasji and Co. v. State of Mysore)2, 1978(2) E.L.T.J. 154 the Supreme Court did not consider that the inexpediency and injustice by themselves were fatal to the claim for refund and that the Supreme Court had upheld the Karnataka High Court's order refusing to exercise its discretion on the ground of laches on the part of the petitioner of the said case.

3. In the case of (Associated Bearing Company Limited v. Union of India and another)3, 1980(6) E.L.T. 415 (paragraph 15), the Union of India had again urged that the Company must have already recovered the excise duty from its customers and, therefore, any order to refund would result in unjust enrichment Chandurkar and Kotwal, JJ., had referred to the Supreme Court decision in D. Cawasji and Co.'s case (supra) and had rejected the said plea of the Excise authorities. In Associated Bearing Company Limited S. case (supra), the Division Bench did not expressly deal with the observations about unjustness of refund in such cases made by Mukhi, J. in Ogale Glass Works Ltd.'s case (supra).

4. In the case of (Maharashtra Vegetable Products Pvt. Ltd. and another v. Union of India and others)4, 1981(8) E.L.T. 468, Chandurkar and Bhonsale, JJ., after giving elaborate reasons had again rejected the Revenue's submission that it might result in unjust enrichment in the event even after recovering the amount in question from its customers, a manufacturer was allowed to obtain under Article 226 an order for refund of duty illegally collected from it. In paragraph 11 of his judgment in Maharashtra Vegetable Products Pvt. Ltd.'s case (supra), after referring to the views on this point of unjust enrichment expressed by Mukhi, J., in Ogale Glass Works Ltd.'s case (supra). Chandurkar, J., had inter alia, observed that it was impossible to dispute the correctness of the observation of Mukhi, J., to the effect that in order to obtain relief under Article 226 t

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