Restitution of illegally collected excise duty upheld; constitutional refund right prevailed over statutory limitation.

Excess excise duty collected on an erroneous interpretation of assessable value under Section 4 was treated as money realised without authority of law. The Delhi High Court held that Article 265 required restitution of the amount, and the revenue's limitation defence could not defeat the constitutional right to refund in writ jurisdiction. The petitioners were therefore entitled to refund of the excess duty, subject to verification, and the writ petition was allowed with a mandamus for refund.

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Issues: Whether the petitioners were entitled to refund of excess excise duty collected under a mistaken interpretation of the assessable value, and whether the refund claim was barred by the limitation under the excise rules.

Analysis: The assessable value under Section 4 of the Central Excises and Salt Act, 1944 was the price charged by the manufacturer to wholesale buyers and dealers. The excess duty had been collected on an erroneous understanding of the law, and the Court treated the excess collection as money realised without authority of law. In such a case, Article 265 of the Constitution of India required the State to refund the amount, and the statutory limitation relied upon by the revenue could not defeat the constitutional and legal right to restitution by writ.

Conclusion: The petitioners were entitled to refund of the excess excise duty, and the plea of limitation failed.

Final Conclusion: The writ petition was allowed and a mandamus issued for refund of the excess duty found due on verification.

Ratio Decidendi: Duty or tax collected without authority of law is refundable in writ jurisdiction, and a statutory limitation on refund applications cannot bar restitution of an amount illegally realised.

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