Refund for duty paid by mistake of law allowed under general limitation, despite departmental refund time bar.

Refund of excise duty paid under a common mistake of law was held enforceable under the general law of limitation, because a suit for money paid by mistake would lie under Section 72 of the Indian Contract Act and the claim was brought within the three-year period under Article 113 of the Limitation Act. The departmental limitation in Rule 11 of the Central Excises and Salt Rules, 1944 did not defeat restitution to that extent, and writ relief under Articles 226 and 227 was available for money realised without authority of law. The refund was therefore maintainable for the period within time, while the earliest two days remained time-barred.

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Issues: Whether refund of excess excise duty paid under a common mistake of law was barred by the limitation in Rule 11 of the Central Excises and Salt Rules, 1944, or whether the claim was maintainable under the general law of limitation and in writ jurisdiction.

Analysis: The claim arose from excess duty collected and retained under a common mistake of law. The Court held that, where a suit for recovery of money paid by mistake would lie under Section 72 of the Indian Contract Act and the claim is brought within the general three-year period under Article 113 of the Limitation Act, 1963, relief is not defeated merely because the departmental refund application does not satisfy Rule 11. The Court further held that writ relief under Articles 226 and 227 of the Constitution of India can be granted for repayment of money realised without authority of law, and that the refund application filed within three years, except for two days, was within time.

Conclusion: The refund was held maintainable for the amount paid from 19-6-1971 to 31-3-1972, while the claim for 17-6-1971 and 18-6-1971 remained barred. The limitation objection under Rule 11 did not defeat the claim to the extent allowed.

Ratio Decidendi: A claim for refund of tax or duty paid under a mistake of law is governed by the general law of limitation and may be enforced in writ jurisdiction when brought within the applicable three-year period, and a departmental limitation rule cannot bar restitution to that extent.

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