Unjust enrichment governs duty refund claims, requiring proof that the tax burden was not passed on before refund is granted.

Refund claims arising after withdrawal of a duty demand must be examined under the doctrine of unjust enrichment, and the applicant must establish that the duty burden was not passed on to another person. The pending refund application was required to be considered on that basis, including compliance with the affidavit requirement recognised in Mafatlal Industries. The direction for immediate refund was therefore set aside, and the claim was left to be decided in accordance with the law governing unjust enrichment.

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Issues: Whether the High Court was justified in directing immediate refund of duty when the refund application was still pending and the claim had to be examined in light of the doctrine of unjust enrichment.

Analysis: The refund application had been filed after withdrawal of the duty demand and was stated to be pending before the department. The appeal was disposed of by applying the principles laid down in Mafatlal Industries, under which a refund claim can be entertained only if the applicant files an affidavit that the burden of duty has not been passed on to another person. The pending refund claim was required to be dealt with accordingly.

Conclusion: The High Court's direction for refund was set aside and the refund claim was left to be decided in accordance with the law governing unjust enrichment.

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