Erroneous refund recovery is time-barred where Section 11A limitation runs from the refund date and no longer period survives.

Recovery of an alleged erroneous excise refund under Section 35A was held subject to the limitation in Section 11A, computed from the date of the erroneous refund. The earlier refund was made on 17-10-1980, but the recovery notice was issued only on 15-9-1981, and the applicable notice period had to be tested against Section 11A as then in force. The contention that a longer one-year period continued to survive because Section 11A was not operative when the refund was made was rejected. The notice was therefore time-barred, the Collector's order was illegal, and recovery could not be sustained.

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Issues: Whether the Collector's notice and order seeking recovery of an alleged erroneous refund were barred by limitation under Section 11A, and whether the review under Section 35A could proceed on the footing that the older one-year period continued to apply.

Analysis: The refund was made on 17-10-1980, but the Collector's notice for recovery was issued only on 15-9-1981. Section 35A required notice to be given within the time-limit specified in Section 11A. The applicable limitation had to be computed with reference to the relevant date under Section 11A, namely the date of the erroneous refund. The argument that a vested one-year period survived because Section 11A was not in force when the refund was made was rejected. The later decision-making action was taken when Section 11A was already operative, and no vested right to the longer period existed.

Conclusion: The notice was time-barred and the Collector's order was illegal; recovery of the refund could not be sustained.

Ratio Decidendi: Where a refund is sought to be recovered under Section 35A, the limitation prescribed by Section 11A applies with reference to the date of the erroneous refund, and a vested right to an earlier, longer limitation period does not survive the coming into force of Section 11A.

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