2025 (8) TMI 1013 - HC - Customs

One-year refund limitation runs from payment/import if notification complied; s.27(1-B) not required when original authority allows refund

M/s. G.E. India Industrial Pvt. Ltd., Represented by its Authorised Signatory Dayanad Kamalakar Puri Versus The Commissioner (Appeals), The Commissioner, Customs House, Thoothukudi

M/s. G.E. India Industrial Pvt. Ltd., Represented by its Authorised Signatory Dayanad Kamalakar Puri Versus The Commissioner (Appeals), The Commissioner, ... ISSUES PRESENTED AND CONSIDERED 1. Whether the limitation provision in Section 27(1B)(b) of the Customs Act applies when refund becomes payable pursuant to an order of an appellate authority, tribunal or court, thereby requiring filing of a fresh refund claim within one year from such order. 2. Whether a refund claim originally filed within one year from payment of duty (Section 27(1)) and subsequently remitted by the Appellate Tribunal for fresh adjudication must be treated as time-barred for want of a fresh claim after the Tribunal's order. 3. Whether the existence of an alternate remedy before the Tribunal (under Section 128) precludes judicial interference with the Appellate Commissioner's order quashing an earlier refund allowance. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Applicability of Section 27(1B)(b) when refund follows appellate/tribunal/court order Legal framework: Section 27(1) requires a refund application to be filed before the Assistant/Deputy Commissioner of Customs within one year from the date of payment of duty. Section 27(1B)(b) provides that, save as otherwise provided, the period of limitation of one year shall be computed from the date of any judgment, decree, order or direction of the appellate authority, Appellate Tribunal or any court where duty becomes refundable as a consequence of such judgment, decree, order or direction. Precedent Treatment: The judgment reproduces and relies on the remand direction of the Appellate Tribunal, which held that claims filed before a wrong forum should not be excluded for limitation and remanded claims to the correct Customs House for fresh processing; the Court treated that remand reasoning as part of the factual matrix but did not treat any higher court precedent as altering statutory construction. Interpretation and reasoning: The Court construes Section 27(1B)(b) narrowly: it applies only where the refund becomes refundable as a direct consequence of an order/direction of the appellate authority/tribunal/court. It does not apply where a taxpayer had already borne the duty, filed a timely refund claim under Section 27(1) and the matter was remitted for fresh adjudication. The statutory language yields two distinct operative scenarios - (a) normal claims filed within one year from payment (Section 27(1)); and (b) claims that become payable only by virtue of a subsequent judicial/tribunal order (Section 27(1B)(b)). Ratio vs. Obiter: Ratio - Section 27(1B)(b) is not applicable when a refund claim was originally filed within one year of payment and is remitted for reconsideration; the one-year limitation under Section 27(1) governs such claims. Obiter - general observations on remand and forum error in prior appellate reasoning are explanatory rather than dispositive of wider principles beyond the facts. Conclusions: Section 27(1B)(b) did not apply to require a fresh claim computed from the Tribunal's remand order; the petitioner's timely original claim under Section 27(1) remained effective for adjudication upon remand. Issue 2 - Effect of Tribunal remand on timeliness of refund claims originally filed within one year Legal framework: Claims filed within one year from payment are cognizable under Section 27(1); remand by the Appellate Tribunal directs the original adjudicating authority to process claims 'in accordance with law'. Precedent Treatment: The Appellate Tribunal's remand emphasized fairness where claims had been filed before an allegedly wrong forum and where neglect by authorities to act would produce gross injustice; the Court treats the Tribunal's order as directing re-adjudication rather than necessitating a new claim filing. Interpretation and reasoning: A remand for fresh adjudication does not necessarily convert the claim into one 'becoming refundable' only upon the Tribunal's order. Where the duty was paid at import and the claimant complied with statutory/notification requirements, the original timely claim retains viability and must be processed by the remanded authority. Requiring a fresh claim in such circumstances would penalize claimants who acted within Section 27(1) and would be inconsistent with the Tribunal's remand objective of remedying jurisdictional error and preventing injustice. Ratio vs. Obiter: Ratio - Remand by the Tribunal to the correct Customs House to process timely-filed refund claims preserves the original claim's timeliness; rejection on ground that a fresh claim was necessary under Section 27(1B)(b) is legally unsustainable. Obiter - policy remarks on prosecuting matters before wrong forums and delay by authorities are contextual. Conclusions: The original refund claims, filed within the one-year period from payment, remained actionable on remand; therefore setting aside the refund allowance on the ground that no fresh claim under Section 27(1B)(b) was filed was incorrect. Issue 3 - Availability of alternate remedy before the Tribunal and scope for writ relief Legal framework: The existence of an alternate statutory remedy (appeal to the Tribunal) can be a ground for refusing writ relief in some circumstances, but courts may exercise discretion where relegation to alternate remedy would serve no useful purpose or cause injustice. Precedent Treatment: The impugned appellate decision emphasized the alternate remedy under Section 128; the Court considered but declined to insist on relegation because of the factual history, delay and the remedial purpose of the Tribunal's earlier order. Interpretation and reasoning: The Court found that relegating the petitioner to pursue another appeal would be futile and serve no useful purpose given the long delay between import (March-November 2011), original claims (May-October 2012), and the successive adjudicatory proceedings including the Tribunal's remand. Given that the Tribunal already remanded for fresh consideration and the original authority had allowed the refund on remand, insisting on a fresh appeal route would be an empty formality and would perpetuate injustice. Ratio vs. Obiter: Ratio - Where an alternate remedy exists but pursuing it would not serve any useful purpose, the Court may exercise writ jurisdiction to prevent injustice. Obiter - remarks on general principles of alternative remedy doctrine are illustrative. Conclusions: The presence of an alternate remedy before the Tribunal did not bar judicial intervention because relegation would produce no useful purpose; accordingly, the Court entertained and allowed the writ petition to quash the impugned appellate order. Final Disposition (as derived from conclusions above) The Appellate Commissioner's order reversing the refund allowance on the ground that the claimant should have filed a fresh claim under Section 27(1B)(b) was quashed. The timely-original refund claims filed within one year of payment under Section 27(1) were held to remain viable upon remand by the Tribunal, and the existence of an alternate remedy did not preclude relief because relegation would serve no useful purpose.