Refund under Article 226 can survive statutory time limits where departmental instructions misled the assessee and duty lacked legal authority.

A departmental circular could not enlarge refund rights beyond the express limitation in Rule 11 of the Central Excise Rules, so it was unenforceable to the extent it conflicted with the rule; refund could not rest on that circular alone. At the same time, a writ court under Article 226 could still order refund of duty collected without authority of law even after expiry of the statutory refund period. Delay and laches did not bar relief where the assessee acted on the departmental circular and the revenue's own conduct materially contributed to the delayed challenge. The refund order was therefore sustained.

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Issues: (i) whether a circular issued under the Central Excise Rules could validly permit refund of duty contrary to the limitation prescribed by Rule 11 of the Central Excise Rules; and (ii) whether the refund writ petitions were liable to be rejected on the ground of delay and laches.

Issue (i): whether a circular issued under the Central Excise Rules could validly permit refund of duty contrary to the limitation prescribed by Rule 11 of the Central Excise Rules.

Analysis: The refund claim was founded on a departmental circular which permitted applications for refund of duty paid by mistake within the period available for a suit for recovery. The Court accepted that the Board could issue instructions only on supplemental matters and could not override the express limitation contained in Rule 11. The circular, to the extent it was inconsistent with the rule, was not enforceable.

Conclusion: The circular could not prevail over Rule 11, and the assessee could not claim refund on that basis alone.

Issue (ii): whether the refund writ petitions were liable to be rejected on the ground of delay and laches.

Analysis: The duty had been paid despite exemption under the notification, and the assessee sought refund after discovery of the mistake. Even though the statutory refund period had expired, the Court held that jurisdiction under Article 226 of the Constitution of India could be exercised to direct refund of duty collected without authority of law. The assessee had acted on the basis of the departmental circular, and the delay in approaching the Court was substantially attributable to the conduct of the revenue authorities in withholding and rejecting the refund claims after a long interval.

Conclusion: The writ petitions were not barred by delay and laches, and refund was rightly directed.

Final Conclusion: The order directing refund was sustained, and the appeal failed.

Ratio Decidendi: A writ court may direct refund of duty paid without legal liability under Article 226 notwithstanding expiry of the statutory refund period, and delay and laches will not defeat relief where the assessee was misled by departmental instructions and the revenue's own conduct materially contributed to the delay.

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