Writ refund of unlawfully collected cess upheld where no statutory refund regime applied and unjust enrichment was not shown

Money collected as water cess without authority of law was held refundable in writ jurisdiction under Article 226, where the refund claim followed a declaration that the levy itself was unlawful and no special statutory refund mechanism applied. The Court distinguished such claims from independent money claims and accepted the writ remedy on the facts. Refund was also not barred by delay and laches, res judicata, or unjust enrichment, because the claims were made within a reasonable time after the levy was invalidated, the cess had been paid under protest, no prejudice to third parties was shown, and the burden had not been passed on. The refund orders were upheld.

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Issues: (i) Whether a writ petition under Article 226 of the Constitution of India was maintainable for refund of water cess collected without authority of law, and (ii) whether refund could be denied on the grounds of delay and laches, res judicata, or unjust enrichment.

Issue (i): Whether a writ petition under Article 226 of the Constitution of India was maintainable for refund of water cess collected without authority of law.

Analysis: The collection of cess prior to the relevant amendment was held to be without authority of law, and the claim for refund arose after the law had been declared invalid. The Court distinguished cases where refund is sought as an independent money claim from cases where refund follows a declaration that the levy itself was unlawful. It also held that, in the absence of a special statutory refund mechanism comparable to the one considered in the excise cases, a writ remedy was available on the facts.

Conclusion: The writ petitions for refund were maintainable and the claim was in favour of the respondents.

Issue (ii): Whether refund could be denied on the grounds of delay and laches, res judicata, or unjust enrichment.

Analysis: The claims were made within a reasonable time after the declaration that the levy was invalid, the cess had been paid under protest, and no prejudice to third parties was shown. The Court further held that earlier unsuccessful challenges to the levy did not defeat the refund claim once the legal position was settled by the Supreme Court. On the plea of unjust enrichment, the Court accepted the respondents' stand that the burden had not been passed on and rejected the contention that remittance to governmental authorities barred refund.

Conclusion: Refund could not be denied on delay and laches, res judicata, or unjust enrichment grounds, and the respondents were entitled to refund.

Final Conclusion: The orders directing refund of the illegally collected water cess were upheld, and the special leave petitions were dismissed.

Ratio Decidendi: Money collected as cess without authority of law is refundable in writ jurisdiction where the claim is made within a reasonable time, no unjust enrichment is shown, and the case does not fall within a special statutory refund regime.

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