High Court grants refund for countervailing duty paid under mistake, emphasizes duty of welfare state

The High Court allowed the petition challenging the rejection of refund applications for countervailing duty paid by a company for imported goods. Despite the delay in filing, the court held that the duty was paid under a mistake, entitling the company to the refund claimed. Emphasizing the importance of diligently pursuing remedies and the duty of a welfare state to refund amounts not lawfully due, the court directed the authorities to refund the duty promptly, with interest if there is a delay, granting relief to the petitioner-company.

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Issues:
1. Refund of countervailing duty paid by the petitioner-company for imported consignments.
2. Rejection of refund applications by customs authorities based on limitation under Section 27(1) of the Customs Act, 1962.
3. Jurisdiction of the High Court under Article 226 of the Constitution to grant relief in cases of mistaken duty payments.
4. Entitlement of the petitioner-company to a refund despite the delay in filing refund applications.

Detailed Analysis:
1. The petitioner-company imported silicon oil and silicon fluid, paying countervailing duty, which was later found to be not liable under Tariff Advice No. 13 of 1978. The company applied for a refund, but the applications were rejected by the Assistant Collector and the Appellate Collector on grounds of being time-barred. The company then filed revision applications with the Government of India, where one revision was allowed, and the others were rejected. The present writ petition under Article 226 of the Constitution challenges the rejection of the remaining revision applications for refund.

2. The counsel for the petitioner argued that a previous judgment favored the petitioner's case, while the respondents contended otherwise. The court, however, found it unnecessary to determine the applicability of the previous judgment. The court acknowledged the duty payment was made under a mistake, and despite the delay in filing, the petitioner was entitled to the relief claimed. The court emphasized that the duty was paid under a mistake, and there was no dispute regarding this fact. The court also noted that the writ petition was filed within the statutory limitation period.

3. The court observed that the petitioner had diligently pursued refund of the duty, even though there was a delay as per Section 27 of the Customs Act. The court held that such a delay should not prevent the High Court from exercising its jurisdiction under Article 226 of the Constitution. The court emphasized that if all statutory remedies were exhausted before approaching the court, and the petitioner acted diligently, justice should not be denied. The court highlighted the expectation for a welfare state to refund amounts not lawfully due.

4. Consequently, the court allowed the petition, setting aside the orders rejecting the refund applications. The court directed the respondents to refund the duty amounts promptly and no later than a specified date. In case of delay in refund, interest was to be paid at a specified rate. The court made the rule absolute without any order as to costs, granting relief to the petitioner-company for the mistaken duty payments.

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