1997 (6) TMI 28 - HC - Customs

Court Invalidates Direction to Consider Refund Application Beyond Limitation Period

The court held that the direction to consider the refund application without regard to the limitation period under Section 27 of the Customs Act was ... Refund - Limitation Issues Involved:1. Validity of the direction to consider the refund application without reference to the period of limitation under Section 27 of the Customs Act, 1962.2. Applicability of the period of limitation prescribed under Section 27 of the Customs Act, 1962.3. Jurisdiction of the High Court to issue directions contrary to statutory provisions.4. Availability of alternative remedies for the respondent.Issue-wise Detailed Analysis:1. Validity of the direction to consider the refund application without reference to the period of limitation under Section 27 of the Customs Act, 1962:The primary contention in this appeal was whether the learned single Judge's direction to consider the refund application dated 14-8-1983 without reference to the period of limitation under Section 27 of the Customs Act, 1962, was valid. The court found that such a direction was not valid in law. Section 27 prescribes a limitation period for filing refund claims, and the authorities are bound by this statutory provision. The court emphasized that the learned single Judge acted beyond jurisdiction in directing the consideration of the refund application on its merits without adhering to the statutory limitation period.2. Applicability of the period of limitation prescribed under Section 27 of the Customs Act, 1962:Section 27 of the Customs Act, 1962, mandates that an application for refund must be filed within six months from the date of payment of duty. The respondent paid the duty on 17-2-1983, and thus, the refund application should have been filed by 17-8-1983. The application was received by the Department on 1-9-1983, beyond the six-month period. The court reiterated that the limitation period prescribed under the Act is mandatory and must be adhered to by the authorities. The respondent failed to provide proof of timely despatch of the application, and therefore, the claim was rightly rejected by the authorities.3. Jurisdiction of the High Court to issue directions contrary to statutory provisions:The court examined whether the High Court has the power to direct authorities to act contrary to statutory provisions. It was held that the High Court's power under Articles 226 and 227 of the Constitution is to ensure that authorities act in accordance with the law, not contrary to it. The court cited precedents from the Supreme Court, including the cases of Escorts Limited v. Union of India and Union of India v. Kirloskar Pneumatic Co. Ltd., which affirm that authorities under the Act must operate within the statutory framework and cannot entertain claims filed beyond the prescribed limitation period. The High Court cannot direct authorities to bypass statutory limitations.4. Availability of alternative remedies for the respondent:The respondent's counsel argued that if the payment of duty was under a mistake of law, the respondent could seek alternative remedies. The court acknowledged this contention and noted that the respondent could pursue alternative legal remedies, such as filing a suit under Section 72 of the Indian Contract Act for recovery of money paid under a mistake of law. The court clarified that the dismissal of the writ appeal does not preclude the respondent from adopting such remedies that are open under law.Conclusion:The writ appeal was allowed, and the direction given by the learned single Judge to consider the refund application without reference to the period of limitation under Section 27 of the Customs Act was set aside. The court emphasized the mandatory nature of the limitation period prescribed under the Act and upheld the authorities' rejection of the refund claim as time-barred. The respondent was advised to seek alternative remedies available under the law.