The limitation period under Section 11b of the Central Excises and Salt Act, 1944, does not apply to payments made under mistake of law, and a person is not debarred from invoking the extraordinary jurisdiction of the court under Article 226 of the Constitution for a refund of such payments, even after the expiry of the limitation period.

( 1 ) DOES the period of limitation provided under Section 11b of Central Excises and Salt Act for refund of duty paid on goods which were not excisable or were entitled to exemption prevents a person from approaching this court for refund of the amount paid under mistake of law after expiry of six months from the date of payment is the issue which has been debated with some vehemence. No less interesting has been discussion on ethics of undue enrichment.

( 2 ) NARRATION of facts is unnecessary. Suffice it to mention that the Assistant Collector Central excise while exercising power under Section 11b of Central Excises and Salt Act of 1944 accepted the claim of petitioner, a Rice Mill Plant, that it being registered as small scale industry was entitled for exemption from whole of excise duty leviable under Tariff Item No. 68 of First schedule in respect of first clearance, for home consumption therefore, the payment of excise duty at 10% during financial years 1983-84 and 1984-85 was made under mistake of law. But the claim was held to be admissible for the period six months prior to 27th September, 1984, the date on which refund application was. made as refund under Section 11b could be claimed within six months only from the date of payment of duty.

( 3 ) RIGHT to claim refund of tax or duty paid under mistake of law with corresponding obligation of state to repay has been consistently upheld by courts. Taxation is sovereign power of the state. But it is subject to constitutional restriction under Article 265 that no tax shall be levied or collected except by authority of law. Therefore, any levy or collection which is contrary to law has to be struck down. when moneys are paid to the State which the State has no legal right to receive, it is ordinarily the duty of the State subject to any special provisions of any particular statute or facts or circumstances of the case to refund the tax of the amount paid. (Commissioner,of Sales Tax v. Auraiya Chamber of Comm. 1986 (25) ELT 867 (SC), [see also sales Tax Officer v. Kanhaiya Lal A. I. R. 1959 SC 135, State of Madhya Pradesh v. Bhailal a. I. R. 1964 SC 1006, State of Kerala v. Aluminium Industries (1965) 16 S. T. C. 689].

( 4 ) WHAT has agitated, however, courts from time to time is the period during which the government can be directed to discharge its obligation by the courts in exercise of power under article 226. Here too there is more or less unanimity that since a suit for recovery of payment under mistake of law can be filed within three years from the date of knowledge the same rule should be adhered to while exercising discretion under Article 226. [a. I. R. 1964 SC 1004, (1965) 16 S. T. C. 689 ). In Trilok Chand v. R. B. Munshi A. I. R. 1970 SC 898 Chief 3ustice hidayatullah while cautioning the courts against entertaining stale claims preferred to rule that discretion of the court should be the guiding factor. But the ratio which has held the field on period of limitation during which refund should be directed is stated thus in D. Cawasji v. State of Mysore A. I. R. 1975, S. C. , 813; "therefore, where a suit will lie to recover moneys paid under a mistake of law, a writ petition for refund of tax within 3 years of the knowledge of the mistake would also lie. "

( 5 ) BUT the fundamental issue is if the remedy of approaching this court in its extraordinary jurisdiction after addition of Sub-section (5) to Section 11b of Act of 1944 is not available as it would indirectly extend period of limitation which has been restricted to six months by the statute. Sub-section (5) of Section 11b reads as under : "notwithstanding anything contained in any other law, the provisions of this section shall also apply to a claim for refund of any amount collected as duty of excise made on the ground that the goods in respect of which such amount was collected were not excisable or were entitled to exemption from duty and no court shall have any jurisdiction in respect