Refund of excise duty and interest follows where a levy notification was ineffective and later amendment could not override prior rulings.

A notification under Rule 29 of the Andaman Excise Rules, 1934 was treated as ineffective to the extent it levied excise duty on liquor brought from the mainland. A later amendment could not defeat prior judicial determinations by declaring those decisions invalid or non-binding, and the differential treatment between persons already refunded and those not refunded was held arbitrary and discriminatory. Retention of the collected duty was also treated as unjust enrichment by the State. On that basis, refund of the excise duty for the relevant period, with interest at 6% per annum until final payment, was held due.

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Issues: Whether the petitioner was entitled to refund of excise duty collected under the impugned notification, together with interest, in view of the earlier judicial decisions and the subsequent amendment.

Analysis: The notification issued in exercise of power under Rule 29 of the Andaman Excise Rule, 1934 had already been held ineffective insofar as it purported to levy excise duty on liquor brought from the mainland. The later amendment could not validly nullify the earlier judicial determination by merely declaring those decisions invalid or not binding, and the classification created between persons already refunded and those not refunded was found to be arbitrary and discriminatory. The Court also accepted that retention of the collected duty by the administration would amount to unjust enrichment on the part of the State rather than the licencee.

Conclusion: The petitioner was held entitled to refund of the excise duty paid for the relevant period, along with interest at 6% per annum until final refund.

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