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1953 Supreme(P&H) 75
PUNJAB & HARYANA HIGH COURT
Kapur, J.
Union Of India
Versus
F.Gian Chand Kasturi Lal
Second Appeal No. 560 of 1951,
Decided On : AUGUST 4, 1953
Notifications issued under the Central Excise and Salt Act, 1944, and published in the official Gazette have the same effect as if they were part of the Act. However, a notification that does not fall under any statutory rule or notification having the force of a statute cannot create an enforceable right to a refund.
Headnote:
CENTRAL EXCISE AND SALT ACT - NOTIFICATION - REFUND OF DUTY - LIABILITY OF CENTRAL GOVERNMENT - NOTIFICATION NOT HAVING STATUTORY FORCE - NO RIGHT TO REFUND.
Fact of the Case:
Plaintiffs, stockists of salt, paid duty and claimed a refund under notifications exempting salt from duty. The Central Government contested the suits, denying liability and raising the plea that the liability to refund, if any, was that of the West Punjab Government.
Finding of the Court:
The notifications relied upon by the plaintiffs did not fall under any statutory rule or notification having the force of a statute. The refund of duty was not provided for under any section of the statute, statutory rules, or notifications issued under the statute. Rule 11 of the rules provided that refunds for duty paid through inadvertence, error, or misconstruction had to be claimed within three months from the date of payment.
Issues: 1. Whether the Central Government was liable to refund the salt duty despite excise being a Central subject?
Ratio Decidendi: 1. Notifications issued under the Central Excise and Salt Act, 1944, and published in the official Gazette have the same effect as if they were part of the Act. However, the notifications relied upon by the plaintiffs did not fall under any statutory rule or notification having the force of a statute. 2. The refund of duty was not provided for under any section of the statute, statutory rules, or notifications issued under the statute. Rule 11 of the rules provided that refunds for duty paid through inadvertence, error, or misconstruction had to be claimed within three months from the date of payment. 3. The plaintiffs did not have any contract or statute in support of their claim for a refund.
Final Decision: The appeals were allowed, the decrees of the trial court were set aside, and the plaintiffs' suits were dismissed. The Central Government was directed to pay the costs of all the courts.
Kapur, J.
1. This judgment will dispose of three appeals R. S. A. Nos. 560 to 562 of 1951 which have been brought against three appellate decrees passed by Mr. Ishwar Das, Senior Subordinate Judge Amritsar, dated 2-4-1951, confirming the decrees of the trial Court whereby the three suits brought by the three different plaintiffs were decreed. The point involved in all these cases is the same.
2. On 28-2-1947 the Government of India Issued a notification exempting from 1-4-1947 salt. manufactured in or imported by land into British India from salt duty. The notification was as follows :
"No. 1-Salt/47.-- In exercise of the powers conferred by Sub-rule (1) of Rule 8 of Central Excise Rules, 1944 , the Central Government is pleased to exempt, with effect from 1-4-1947, salt manufactured in or imported by land into British India from the whole of the duty leviable thereon under Section 3 of the Central Excise and Salt Act, 1944 (I of 1944)."
On the same date another notification No. 2-Salt/47 was issued which was in the following terms :
"No. 2-Salt/47-- By" Notification Nos. 1-Customs/47 and 1-Salt/47 of 28-2-1947 salt imported into or manufactured in British India is with effect from 1-4-1947 exempted from payment of the -duty leviable thereon. A refund of duty paid on stocks of salt held on 1-4-1947 or in transit on that date will also be admissible subject to the conditions set out in the following rules."
3. Under Section 37 of the Central Excises and Salt Act (Act I of 1944) hereinafter termed the Act rules can be framed to carry out the intention of the Act and certain rules have been made which are contained in the Central Excise Manual. Rules 8 and 11 are relevant to this case. Rule 8 gives to the Central Government the power to authorise exemption from duty in special oases and runs as follows:
"8. Power to authorise exemption from duty in special cases: (1) The Central Government may from time to time, by notification in the Official Gazette exempt subject to such conditions as may be specified in the notification any excisable goods from the whole or any part of the duty leviable on such goods.
(2) The Central Board of Revenue may by special order in each case exempt from the payment of duty, under circumstances of an exceptional nature, any excisable goods."
4. Rule on the date of the suit, before it was amended, was as under :
"11. No refund of charges erroneously levied or paid, unless claimed within the three months. --No duty which has been paid, or has been adjusted in an account-current maintained with the Collector under Rule 9, and of which repayment wholly or in part is claimed in consequence of the same having been paid through inadvertence, error or misconstruction, shall be refunded unless a written claim is lodged with the proper officer within three months from the date of such payment or adjustment as the case may be."
In order to understand the case it may be necessary at this stage to refer to certain sections of this Act. Section 3 is the charging section. It provides:
"3. Duties specified in the First Schedule to be levied. --(1) There shall be levied and collected in such manner as may be prescribed duties of excise on all excisable goods other than salt which are produced or manufactured in India, and a duty on salt manufactured in, or imported by land into, any part of India as, and at the rates, set forth in the First Schedule."
5. Chapter 7 of this Act contains the supplemental provisions and Section 37 which empowers the Central Government to make rules provides:
"X X X
(i) provide for the assessment and collection of duties of excise, the authorities by whom functions under this Act are to be discharged, the issue of notices requiring payment the manner in which the duty shall be payable, and the recovery of duty not paid;
(ii) prohibit absolutely, or with such exceptions or subject to such conditions as the Central Government thinks fit, the production or manufacture, or any process
