TaxTMI 
TaxTMI 
2001 (1) TMI 83
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....VARAJ V. PATIL J.--In all these cases the controversy raised relates to the claim of refund of the amount paid by the respondents as water cess under the provisions of the Water (Prevention and Control of Pollution) Cess Act, 1977 (for short "the Act"). Briefly stated, the facts leading to the filing of these petitions are: The respondents are the owners of industrial units manufacturing sugar from sugarcane and liquor/alcohol from molasses, a by product. On demand made by the State Government under the provisions of the Act they were required to pay water cess. They protested against the demand principally contending that sugar industries and distilleries were not industries covered by entry No. 15 of Schedule I to the Act and consequently they were neither liable to submit any return nor to make any payment of water cess. When their protests were not accepted and the demand persisted for payment of water cess the respondents paid the amount under protest. Some of them filed Writ Petitions Nos. 3558 of 1980, 494 of 1980 and 17646 of 1988. The writ petitions came to be dismissed. Thereafter, special leave petitions were filed before this court, which were disposed by judgment in Sa....
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....ng for the petitioners in Special Leave Petitions Nos. 4436-4437 of 1998, contended (1) that in the absence of any specific direction given by this court in Saraswati Sugar Mills' case [1992] 1 SCC 418, for refund of the amount collected under the provisions of law, the respondents were not entitled for refund; (2) the respondents having failed in the earlier writ petitions challenging the very levy of cess before the High Court and having not challenged the order of the High Court further could not make claim for refund on the basis of a subsequent judgment of this court; (3) in view of the decision of this court in Orissa Cement Ltd. v. State of Orissa [1991] Supp 1 SCC 430, no direction could be given for refund of the amount; mere prayer for grant of refund could not be granted by issuing a writ of mandamus; and (4) the High Court could not have entertained the writ petitions of the respondents after inordinate delay of about 4 to 5 years when their earlier writ petitions were dismissed in 1987. Shri Sudhir Chandra, learned senior counsel and Ms. Indu Malhotra and Shri H.K. Puri, learned counsel for the respondents, submitted that having regard to the facts and circumstanc....
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....estion of maintainability of the writ petitions we may notice a few decisions of this court on the very point as to claim for refund of money in a writ petition under article 226 of the Constitution of India. In HMM Limited v. Administrator, Bangalore City Corporation [1990] 77 STC 17 (SC); [1989] 4 SCC 640, it is held that a tax or money realised without authority of law is bad under article 265 of the Constitution and that the money or tax so collected are refundable. In that case octroi was levied and collected in respect of goods on their mere physical entry into the city limits, which were not used or consumed or sold within the municipal limits. This court, dealing with the refund in para. 12 of the judgment, held thus: "We see no ground as to why the amount should not be refunded. Realisation of tax or money without the authority of law is bad under article 265 of the Constitution. Octroi cannot be levied or collected in respect of goods which are not used or consumed or sold within the municipal limits. So these amounts become collection without the authority of law. The respondent is a statutory authority in the present case. It has no right to retain the amount, so far ....
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....n as arising in the present cases relating to the very question of refund, while answering the said question affirmatively, this court pointed out that the courts have made distinction between those cases where a claimant approached a High Court seeking relief of obtaining refund only and those where refund was sought as a consequential relief after the striking down of the order of assessment, etc. In these cases also the claims made for refund in the writ petitions were consequent upon declaration of law made by this court. Hence, the High Court committed no error in entertaining the writ petitions. This court again in Shree Baidyanath Ayurved Bhawan Pvt. Ltd. v. State Of Bihar [1996] 6 SCC 86, held that such a writ petition even if assumed to be only for money was maintainable under article 226 of the Constitution observing thus in para. 10 of the judgment: "10. The writ petition was not a run-of-the-mill case. It was a case where the respondent-State had not acted as this court had expected a high constitutional authority to act, in furtherance of the order of this court. That is something that this court cannot accept. The respondent-State was obliged by this court's order t....
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....icle 226 of the Constitution. Further in para. 108(ii) of the judgment it is held that where, however, a refund is claimed on the ground that the provisions of the Act under which it was levied is or has been held to be unconstitutional, such a claim, being a claim outside the purview of the enactment, can be made either by way of suit or by way of writ petition. In support of the submission that a writ petition seeking mandamus for mere refund of money was not maintainable, the decision in Suganmal v. State of Madhya Pradesh [1965] 16 STC 398 (SC); AIR 1965 SC 1740 was cited. In para. 6 of the said judgment it is stated that "we are of opinion that though the High Courts have power to pass any appropriate order in the exercise of the powers conferred under article 226 of the Constitution, such a petition solely praying for the issue of a writ of mandamus directing the State to refund the money is not ordinarily maintainable for the simple reason that a claim for such a refund can always be made in a suit against the authority which had illegally collected the money as a tax". Again in para. 9 the court held: "We therefore hold that normally petitions solely praying for the refu....
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....validity of a particular provision or levy is under challenge, this court has explained the legal position in Shenoy and Co. v. Commercial Tax Officer [1985] 155 ITR 178 (SC) that when the Supreme Court declares a law and holds either a particular levy as valid or invalid it is idle to contend that the law laid down by this court in that judgment would bind only those parties who are before the court and not others in respect of whom appeal had not been filed. To do so is to ignore the binding nature of a judgment of this court under article 141 of the Constitution. To contend that the conclusion reached in such a case as to the validity of a levy would apply only to the parties before the court is to destroy the efficacy and integrity of the judgment and to make the mandate of article 141 illusory. When the main judgment of the High Court has been rendered ineffective, it would be applicable even in other cases, for exercise to bring those decisions in conformity with the decisions of the Supreme Court will be absolutely necessary. Viewed from that angle, we find this contention to be futile and deserves to be rejected. The next case relied on by the petitioners is Municipal Corp....
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....ough. Further it is only noticed that in ascertaining as to what is the reasonable time for claiming refund, the courts have often taken note of the period of limitation prescribed under the general law of limitation for filing suits for recovery of the amount due to them. In exercise of writ jurisdiction, facts and circumstances of each case are to be kept in mind in ascertaining whether there have been laches on the part of the parties seeking relief in due time or not. In these cases having regard to the facts and circumstances already stated above, it cannot be said that there were laches on the part of the respondents or that they had abandoned their claim for refund. In Sales Tax Officer, New Delhi v. East India Hotels Ltd. [1998] 9 SCC 662 the appellant authority charged sales tax on the sales thereof prior to the judgment of this court in Northern India Caterers (India) Ltd. v. Lt. Governor, Delhi [1978] 42 STC 386 (SC); [1978] 4 SCC 36. A fresh assessment order was passed thereafter, on the basis of the revised return filed by the first respondent. Ultimately, an order was passed holding that the first respondent had made application for refund of the excess amount paid wi....
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....swati Sugar Mills' case [1992] 1 SCC 418 aforementioned. The respondents have paid water cess under protest. The collection of water cess in view of the law laid down by this court was clearly illegal and without authority of law. It is also not the case that rights are created in third parties on account of delay, if any, in approaching the court and that by entertaining the writ petitions rights of third parties are prejudiced. In this view there was no question of delay and laches on the part of the respondents on the facts found and circumstances stated. The respondents had specifically pleaded that they did not pass on the liability of the water cess to their customers; it appears this contention was not denied by the petitioners before the High Court. On the other hand the only plea taken by the petitioners was that money had been passed to the Central Government under section 8 of the Act. It was brought to the notice of the court by the respondents that 65 per cent of the sugar was sold by the respondents through the public distribution system under the Essential Commodities Act. Hence there was no question of unjust enrichment also in these cases. The stand of the petiti....