Refund under mistake of law: limitation runs from discovery of the mistake, preserving the common law right to recover unlawful payments.

Refund of excise duty paid under mistake of law was treated as recoverable under common law where no statutory bar applied. Limitation under the Limitation Act was held to begin from the date the mistake was discovered, because the cause of action arose only when the correct legal position became known. On that basis, the claim filed within three years of discovery was not time-barred, and the assessee was entitled to have the refund claim examined on merits.

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Issues: Whether a claim for refund of excise duty paid under mistake of law was governed by the common law and the Limitation Act, with limitation running from the date of discovery of the mistake, and whether the claim was therefore within time.

Analysis: The relevant date was held to be the date on which the mistake of law was discovered, because the cause of action arose only when the correct legal position became known. On that date, the later statutory refund provision had not come into force, and the refund claim was treated as one falling to be examined under the common law. The Court applied the principle that money received without authority of law is recoverable as a common law right, and that in cases of mistake the limitation period under the Limitation Act begins only from discovery of the mistake. The claim was found to have been filed within three years of such discovery.

Conclusion: The refund claim was not time-barred, and the assessee was entitled to have the claim considered on merits.

Ratio Decidendi: In a case of refund of duty paid under mistake of law, limitation runs from the date of discovery of the mistake, and the common law right to recover money paid without authority of law remains available where no applicable statutory bar governs the claim.

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