2015 Supreme(Raj) 354

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR
Mohammad Rafiq, J.
M/s Interglobe Aviation Limited – Appellant
Vs.
The State of Rajasthan and Others – Respondents
S.B. Civil Writ Petition No.21473, 21474, 21475/2013 With Stay Application No.18454, 18455, 18456/2013
Decided on : 13.05.2015

The plea of unjust enrichment cannot be raised by the respondents when they did not raise such plea specifically at the earlier stage and the respondents are precluded from raising the plea of unjust enrichment by virtue of the doctrine of constructive res judicata.

Headnote:

VAT - REFUND - UNJUST ENRICHMENT - REMAND - SCOPE OF ENQUIRY - DOCTRINE OF CONSTRUCTIVE RES JUDICATA - APPLICABILITY TO WRIT PROCEEDINGS - PUBLIC POLICY - FINALITY OF JUDGMENTS - ALTERNATIVE REMEDY - AVAILABILITY - EXCEPTIONS - WRIT PETITION MAINTAINABLE DESPITE AVAILABILITY OF ALTERNATIVE REMEDY - CONDITIONS.

Fact of the Case:

Petitioner-company, engaged in civil aviation, established a HUB at Jaipur Airport, connecting Jaipur with other cities. It purchased ATF from IOCL at Sanganer Airport, Jaipur. The IOCL collected VAT at the rate of 28% from the petitioner-company, whereas, in view of exemption notifications issued by the State Government, petitioner-company having established a HUB in the State, was fully exempt from such tax during the first and second phase and was liable to pay the tax only at the rate of 4% during the third phase but was wrongly charged at the rate of 28%. The petitioner-company filed writ petitions challenging the collection of VAT and seeking refund of the same. The High Court allowed the writ petitions and remanded the matter to the assessing officer to decide the claim of the petitioner-company for refund afresh, within six months after making appropriate enquiry in the light of discussions made in the judgment. The assessing officer rejected the claim of refund on the ground of unjust enrichment, holding that grant of refund to the petitioner-company would amount to its unjust enrichment as it has failed to prove that it has borne and suffered the incidence of tax and has not passed on the burden thereof on the consumers. The petitioner-company filed writ petitions challenging the impugned orders.

Finding of the Court:

1. The plea of unjust enrichment was not taken earlier by the respondents and they did not specifically deny the assertion of the petitioner-company that it has borne and suffered the incidence of tax and has not passed on the burden to the third party. 2. The High Court in its earlier order, noticed no factual dispute and castigated the respondents by holding that respondents cannot be permitted to give additional reasons in support of their rejection order. 3. The assessing officer, for the first time, with mala-fide intent, issued another notice regarding unjust enrichment in its desperate attempt to somehow deny the relief of refund of tax to the petitioner-company, which is nothing but an attempt to overreach the order of limited remand. 4. The respondents are precluded from raising the plea of unjust enrichment by virtue of the doctrine of constructive res judicata. 5. The judgment of the High Court in the earlier proceedings has not been challenged by the respondents, and has been allowed to attain finality, that would imply that the correctness of the judgment has been accepted by the respondents. 6. The assessing officer has gone beyond the scope of enquiry in a clearly delineated remand order by rejecting the refund claim on an entirely new ground, which they did not take earlier. 7. The High Court does not appreciate the manner in which its judgment has been sought to be circumvented by the respondents.

Issues: 1. Whether the plea of unjust enrichment can be raised by the respondents when they did not raise such plea specifically at the earlier stage? 2. Whether the respondents are precluded from raising the plea of unjust enrichment by virtue of the doctrine of constructive res judicata? 3. Whether the assessing officer has gone beyond the scope of enquiry in a clearly delineated remand order by rejecting the refund claim on an entirely new ground, which they did not take earlier?

Ratio Decidendi: 1. The plea of unjust enrichment was not taken earlier by the respondents and they did not specifically deny the assertion of the petitioner-company that it has borne and suffered the incidence of tax and has not passed on the burden to the third party. 2. The respondents are precluded from raising the plea of unjust enrichment by virtue of the doctrine of constructive res judicata. 3. The judgment of the High Court in the earlier proceedings has not been challenged by the respondents, and has been allowed to attain finality, that would imply that the correctness of the judgment has been accepted by the respondents. 4. The assessing officer has gone beyond the scope of enquiry in a clearly delineated remand order by rejecting the refund claim on an entirely new ground, which they did not take earlier.

Final Decision: The writ petitions were allowed. The impugned orders dated 20.09.2013 passed by respondent no.3 in all the three writ petitions, were quashed and set aside. The respondents were directed to take 05.01.2007 as the date of commencement of HUB to be correct, and were further directed to refund the amount referred to in the preceding para, together with interest at the rate of 9% per annum from 20.09.2013, the date on which they ought to have allowed refund claim of the petitioner-company but illegally rejected the same.