Harinarayan Arora vs Union of India (UOI)

N.N. Bhattacharjee, J.—By an order dated September 10, 1993, recorded in each of these cases, a learned Single Judge in Circuit at Port Blair referred these three matters of the Division Bench on the ground that questions of considerable importance including vires of a Regulation were involved in these matters. Accordingly, these three applications have been taken up by this Bench and heard together as the facts, are almost same and identical questions of law are involved. This judgment and order shall, therefore, cover these three cases under consideration.

The Petitioners have prayed for directions to the effect that the Respondents were not entitled to retain the money illegally collected by them from the Petitioners on the basis of Rule 29 of Andaman Excise Rules, 1934, read with notification dated October 24, 1973. The Petitioners have also challenged the notification dated September 1, 1984, issued by the President of India promulgating the Andaman and Nicobar Islands (Amendment) Regulation, 1984, thereby amending the Andaman and Nicobar Islands Regulation III, 1876. The facts in short are as follows:

The Petitioner in CO. No. 5188(W)/83 participated in a public auction to obtain a licence to vend various types of liquors, wines, beer etc. for the period from April 1, 1974 to March 31, 1975. He being the highest bidder was accepted by the Respondent authorities and granted the licence for Middle Point, A. & N. Islands for the said period. He was also the highest bidder for two successive years and was granted licence for the said purpose for the same area. The Petitioner in CO. No. 1622(W) of 1984 likewise was the highest bidder for some other area for each of the years from* 1976 to 1979. and the Petitioner in CO. No. 15642(W) of 1984 similarly was the highest bidder and granted annual licence to sell liquor, wine and beer for certain other areas for the year 1977 to 1980. On the basis of the said licenses the Petitioners imported huge quantities of liquor from the main land and sold the same through their respective shops for the areas the licenses were given.

On October 24, 1973, a notification was issued by the Chief Commissioner by virtue of powers conferred under Rule 29, Andaman Excise Rules, 1934, prescribing the rates of excise duty payable by the licensees on India-made- Foreign liquor and beer. Challenging the validity of the said levy another dealer, Jagannath of Middle Point, Port Blair, filed a writ application before this Court whereupon a Civil Rule being No. 2903(W) of 1974 was issued. The, said writ application was finally disposed of by Amiya K. Mookerji J. who by his order dated August 25, 1975, made the rule absolute holding inter alia that excise duty being a tax levied on commodities produced or manufactured in the taxing state, and India-made-Forcing liquor and beer having already been subject to excise duty in the originating state, the authority in the Islands had no power to levy any excise duty upon them, the learned Judge further held that as the Regulation of 1876 under which the Excise Rules, 1934, was framed did not confer any power upon the Administration to impose any excise duty on India made-Foreign liquor, Rule 29 of the Andaman Excise Rules, 1934, which applies to country liquor as and when drawn from the bonded warehouse situated in the Islands, was of no avail to the authorities to impose the duty. The Respondent authorities preferred an appeal against the said order and judgment passed by Amiya Kumar Mookerji J. and the Division Bench of this Court presided over. by Murari Mohan Dull J. sitting with D. C. Chakraborty J. in F.M. A.T. No. 328 of 1976 dismissed the appeal by an order and. judgment dated May 3, 1978, confirming the said decision of the learned Single Judge.

Before the Division Bench it was contended on behalf of the Appellant that the amount of excise duty that was deposited had been realized by the writ Petitioner/Respondent from his customers and did not belong to him and, as such, he was not entitled to get refund of the same. The contention was overruled and it was held that the Administration connot deprive a person of his property without the authority of law as provided under Article 31(1) of the Constitution. After the appeal was dismissed by the Division Bench, the entire amount so realised was refunded to the said writ Petitioner/Respondent, Jagannath.

The present writ Petitioners in view of the said judgment, findings and order of the trial Judge, as also of the Division Bench applied to the Respondent authorities for refund of the sums illegally collected from them on the strength of the notification dated October 24, 1973. But as no action was taken for a pretty long time, the present writ Petitioner in CO. No. .5I88 (W) of 1983 filed a writ petition being Civil Rule No. 29(W) of 1981 whereupon T. K. Basu J. by an order dated December 7, 1981, directed issuance of a writ of mandamus commanding the Respondent authorities to consider the refund application and pass order thereon in accordance with law after giving the Petitioner a chance of hearing. The said Petitioner was thereafter directed to appear before the Deputy Commissioner of Excise, for the purpose of hearing and it appears that by a letter dated August 4, 1970, Shri M. S. Malhotra, Assistant Secretary (Public), wrote to the Deputy Commissioner, Nicobar district, Car Nicobar, for taking necessary steps for refund of the amount collected from him after verification. It was further communicated to the Deputy Commissioner that necessary refund bill after completing requisite formalities including verification of the Treasury vouchers Nos. were to be sent to the Administration Secretariat for obtaining counter-signature of the Chief Commissioner. Subsequently, by a letter dated August 4, 1980, the Deputy Commissioner, Car Nicobar, informed the writ Petitioner that the refund bill had already been forwarded to the Administration Secretariat for countersignature.

Similarly, in Civil Rule No. 7280(W) of 1980 Umesh Chandra Banerjee J. directed to dispose of the pending refund application of the writ Petitioner herein in CO. No. 1622(W) of 1984 after taking note of the letter dated February 24, 1974, written by Shri M. S. Malhotra, Assistant Secretary, to the Petitioner on behalf of the Chief-Commissioner, Andaman and Nicobar Administration, within a period of four weeks from the date of communication of the order.

In CO. 15642(W) of 1984 the writ Petitioner got a decree in Money Suit No. 12 of 1980 for recovery of the amount involved against the Respondents and the concerned 1st Money Appeal No. 12 of 1984 is being stayed before the learned District Judge, Andaman and Nicobar Islands, though, however, the entire dec-trial cost was deposited in Court and is still lying in such deposit.

However, before the counter-signatures were made on the refund vouchers and the amounts of excise duties were withdrawn by the two Petitioners herein, and the dec-trial cost could be proceeded against by the third Petitioner herein, the notification dated September 1, 1984, had been issued by the President of India promulgating the Andaman and Nicobar Islands (Amendment) Regulation, 1984, which imposed levy of excise duty retrospectively with effect from October 24, 1973, on the India-made foreign liquor notwithstanding any judgment, decree or order of any Court thereby seeking to invalidate a valid judgment. Meanwhile, by an order dated July 3, 1982, the Deputy Commissioner, Andaman district, by referring to the decisions of the Supreme Court in Shiv Shankar Dal Mills and Others Vs. State of Haryana and Others, and The Newabganj Sugar Mills Co. Ltd. and Others Vs. The Union of India (UOI) and Others, had come to the conclusion that as the refundable amounts being excise duties were collected from the consumer public, the wine merchants should not be allowed to make an unjust enrichment by sums not being legally and equitably entitled to and the Administration being also not legally entitled to retain the same, such moneys, the order said, should be diverted for public and charitable purpose according to some scheme. Upon such conclusion the refund applications were rejected. Being aggrieved by the said decision and change in law with retrospective effect which has been alleged to be ultra vires to pt. Ill of the Constitution, the Petitioners have come with the present writ applications.

In the original Regulation of 1876 there was no provision for imposition of any duty whatsoever on any liquor imported from the main land. It was for the first time in 1934 that provision was made for imposition of excise duty on country liquor manufactured or produced in the Islands and for sale thereof. In respect of India-made foreign liquor, 1934 Rules provided only for obtaining licence by bidding in public auction for importation from main land and sale in the Islands through sanctioned shops. Rule 29 of the said Rules, read with the forms prescribed thereunder leave no room for doubt that excise duty was leviable only on country liquor and not India-made foreign liquor and the Calcutta High Court in the concurrent (1) Shiv Shankar Dal Mills and Others Vs. State of Haryana and Others, Per V.R. Krishna Iyer J. (2) The Newabganj Sugar Mills Co. Ltd. and Others Vs. The Union of India (UOI) and Others, (Per V.R. Krishna Iyer J.) ringing of the trial Judge and Division Bench struck down the notification dated October 24, 1973, which fixed rates of excise duty on India-made foreign liquor and beer as scheduled in the said notification.

Against this background the impugned Regulation of 1984 which is set out below has to be read:

Ministry of Law, Justice and Company Affairs Legislative Department, New Delhi, the 1st September, 1984, Bhadra 10, 1906 (Saka) The Andaman and Nicobar Islands (Amendment) Regulation, 1984, No. 2 of 1984 Promulgated by the President in Thirty-fifth year of " the Republic of India.

A Regulation further to amend the Andaman and Nicobar Islands Regulation, 1876.

Whereas by reason of certain liquor not being manufactured or produced in the Union Territory of the Andaman and Nicobar Islands, countervailing duty is not leviable on such liquor which is imported into that territory;

And Whereas the consumption, except for medicinal purposes, of such liquor would be injurious to health and the levy of a special duty on the importation of such liquor into the Union Territory of the Andaman and Nicobar Islands would be an endeavour towards bringing about prohibition of She consumption as aforesaid of such liquor;

Now, Therefore, in exercise of the powers conferred by Article 240 of the Constitution, the president is pleased to promulgate the following Regulation made by him:

(1) This Regulation may be called Short title and the commencement of the Andaman and Nicobar Islands (Amendment) Regulation, 1984.

(2) This section and Section 6 shall come into force at once, and the remaining provisions of this Regulation shall be deemed to have come into force on the 24th day of October, 1973.

Regulation III of 1876. Substitution of 2� Throughout the Andaman and certain expression Nicobar Islands Regulation, 1876 for certain other (hereinafter referred to as the expression. principal Regulation), for the words ''Chief Commissioner'' where-ever they occur, the word ''Administrator'' shall be substituted.

Amendment of Section 3.

In Section 3 of the principal Regulation, for the definition of the expression ''section'' the following definitions shall be substituted, namely; ''Administrator'' means the Administrator of the territory appointed under Article 239 of the Constitution ; ''beer'' includes ale, stout, porter and any other fermented liquor usually made from malt; ''country liquor'' means liquor manufactured, or produced in any part of India, other than foreign liquor; ''duty'' means the duty of excise or countervailing duty or, as the case may be special duty; ''foreign liquor'' means beer, brandy, whisky, gin, rum, milk punch, wines and such other liquor as may, by notification in the Andaman and Nicobar Islands Gazette, be declared by the Administrator as foreign liquor for the purposes of this. Regulation ; ''import'' means bringing into-the territory from any place in India beyond the limits of the territory ; ''liquor'' includes spirits of wine, meth-lated or denatured spirits, spirits, wines, toddy, beer, feni and all liquids consisting of or containing, alcohol other than medicinal and toilet preparations containing alcohol ; ''proof liter'' means a liter of a mixture of ethyl alcohol and distilled water which at the temperature of 10.5 degrees centigrade weighs exactly twelve-thirteenths (12/13) of parts of an equal measure of distilled water at the same temperature ;

''section'' means a section for this Regulation: ''special duty'' means a lax on the import of any description of liquor being description of liquor on which countervailing duty as is mentioned in entry 51 of List II in the Seventh Schedule to the Constitution is not impossible on the ground merely that such description of liquor is not being manufactured or produced in the territory ;

''territory'' means the Union territory of the Andaman and Nicobar Islands.

Insertion of new Section 31A.

After Section 31 of the principal Regulation, the following section shall be inserted, namely:

Levy and collection of duty.

31A. There shall be levied and collected in the manner provided by this Regulation and the Rules thereunder and at such rates not exceeding the rates set forth in the Schedule, as the Administrator may, by notification in the Andaman and Nicobar Islands Gazette, specify a duty of excise or a counter-veiling duty or a special duty, as the case may be, on all liquor of the description specified in the Schedule, being liquor manufactured or produced in, or brought into, the territory and such duty shall be payable by the person manufacturing or producing or importing such liquor;

Provided that no such duty shall be levied on today when used for the manufacture of jaggery, "vinegar, yeast, neera or when drunk as such.

Explanation: For the removal of doubts, it is hereby declared that in any notification under this section it shall not be necessary to specify separately the rate of countervailing duty or special duty and, unless otherwise provided in such notification expressly, any rate specified in such notification as the rate of excise duty in respect of any description of liquor shall be deemed to be also the rate of countervailing duty or special duty, as the case may be, in respect of such description of liquor.

Insertion of Schedule.

After Section 35 of the principal Regulation, the following Schedule shall be inserted, namely:

THE SCHEDULE (See Section 31 A)

S. No. Description of liquor - Rate Rs. ps.

1 2 . ''3

Foreign liquor, other than milk punch wines and beer 25.00 per proof litre

Milk punch and Wines 6.00 per bulk litre

Beer 3.00 per bulk litre

Country liquor 3.00 per proof litre

Rectified spirit absolute alcohol except when used for manufacture of liquor or for medicinal purposes.

Blended country liquor 2.50 per proof litre 2.00 per bulk litre in addition to the duty on country liquor.

(1) Notwithstanding any judgment, decree or any Court or other authority, anything or any action done or taken or purported to have been done or taken under the principal Regulation and the Rules thereunder, before the date of promulgation of this Regulation shall be, and shall be deemed always to have been, as valid and effective as if such thing or action had been done or taken under the principal Regulation, as amended by this Regulation, and accordingly �

(a) any duty fee levied, assessed or collected or purporting to have been levied, assessed or collected under the principal Regulation, and the Rules thereunder, before the date of promulgation of this Regulation shall be deemed to have been validly levied, assessed or collected in accordance with law ;

(b) no suit or other proceeding shall be maintained or continued in any Court or before any authority for the refund, and no enforcement shall be made by any Court or other authority of any decree or order directing the refund, of any such duty or fee which has been so collected;

(c) recoveries shall be made in accordance with the provisions of the principal Regulation, and the Rules-thereunder, of all amounts which would have been collected as duties or fees under the principal Regulation by reason of the amendments made in the principal Regulation by this Regulation but which had not been collected.

Explanation: For the removal of doubts, it is hereby declared that no act or omission on the part of any person before the date of promulgation of this Regulation shall be punishable as an offence which would not have been so punishable if this Regulation had not been promulgated.

(2) The amendments made in the principal Regulation by this Regulation, and the provisions of Sub-section (1) of this section, shall not apply to, or in relation to, any case in which, under the order of the High Court, refund had been made before the date of promulgation of this Regulation of any duty collected under the principal Regulation and the rules thereunder.

Zail Singh President R.V.S. Peri Sastri Secretary of the Govt, of India.

Although these matters are pending from 1983 and despite several opportunities being given, the Respondent authority has not chosen to file any affidavit-in-opposition in either of the three cases. Mention may be made of that although the learned Government Pleader Mr. R. Shiv Swaroop was present all through during the hearing of this case running for about 15 days before this Circuit Bench, he did not argue himself and Mr. N. N. Nag, learned Advocate on behalf of the Respondents, argued in the first two matters and Mr. Ashis Roy, learned Advocate in the third matter being CO. 15642 (W) of .1984 under instructions of the learned Government Pleader. Mr. S. G. Bose, learned Counsel on behalf of one of the writ Petitioners, submitted at the first place that the Respondent authorities could not make any levy and collect excise duty on the strength of Section 31A of the" Regulation unless a notification as mentioned in the said Sub-section is issued fixing the rates of excise duty within the ceiling limit prescribed, in the schedule appended thereto. His contention is that the provisions of Section 31A is an enabling provision which empowers the authority concerned to levy excise duty by a separate notification, and unless such notification is issued the authorities cannot collect any excise duty. Mr. N. N.'' Nag, learned Advocate for the Respondent, on the other hand, submitted that the 1973 notification which prescribed some rates of excise duty should be read as the notification contemplated in Section 31Aintending thereby to infuse life to a baby which is long dead, a proposition that baffles our comprehension.

No notification as required u/s 31A has so far been issued. On a. plain reading of Section 31A of the amended Regulation it appears that until and unless a notification is issued prescribing the rates at which the excise, duty is to be realised, no excise duty can be levied or collected. The rates appended to the schedule of the said section are only the ceiling limits of tax that can be levied in respect of items mentioned therein. The schedule circumscribes the authority of the executives to fix the rates of tax on individual items, and in no case levying or realizing at the maximum rate without issuing any notification fixing the rates is contemplated by the Legislature, i.e. the President of India. The Explanation appended to the said newly inserted Regulation makes the position more clear. The Explanation has been added to remove any doubt as to the effect of any such Notification which the Administrator is authorised to issue under this section, and by no stretch of imagination it can be contemplated that the Notification to be issued, as referred to in the section, is the Notification already in existence, a notification which has already been struck down by the High Court.

Mr. S. C. Bose submitted, in the next place, that Section 31A of the Regulation of 1984 does not prescribe any assessment procedure nor machinery for assessment and does not contain any provision for appeal against such assessment thereby depriving the Assesses of having the supervision by a Civil Court over the entire process of assessment, and in such premises the same cannot be treated'' as a taxing statute. In support of his contention he has relied on a judgment of the Supreme Court in Kunnathat Thathunni Moopil Nair Vs. The State of Kerala and Another, wherein the Supreme Court held that the assessment of tax must have to be made on a judicial basis, and unless the Act in. question lays down the procedure to be followed in the matter of assessment and the machinery for assessment including the provisions for appeal are definitely stated, the Act will be liable to be declared ultra vires. It appears that neither any assessment procedure is laid down nor it contains any provision for appeal in case of dissatisfaction as to the assessment made and there is no assessment machinery prescribed in the Regulation and, accordingly, in view of the decision of the Supreme Court, Section 31A of the Regulation of 1984 has to be treated as ultra vires.

Mr. Bose''s next submission is that the Calcutta High Court declared the Notification dated October 24, 1973, issued in exercise of power conferred by Rule 29 of the Andaman & Nicobar Excise Rules, 1934, illegal and ultra vires to Article 31(1) of the Constitution. But Section 31A read with Section 1, Sub-section (2) lays down promulgation of the excise duty with retrospective effect treating the judgment and order of the High Court a nullity. He submitted that if any law is declared ultra vires to any of the provisions of Pt. HI of the Constitution, under Article 13(2) of the Constitution the same is to be treated as void and nonest in the eye of law. Again, Notification or Rule which was void cannot be validated by any validation Act. It has to be re-enacted. In the instant case, the President has not re-enacted with retrospective effect but has only amended, and as a result the 1984 Regulation cannot validate the invalidity of the Rule or Notification in question. In this connection, Mr. Bose has relied on the decision in D. Macropolo and Co. Vs. Union of India (UOI) and Another, (Per Sabyasachi Mukharji J.) wherein Sabyasachi Mukharji J. as His lordship then was, sitting singly agreed with the Full Bench decision of the Delhi High Court in P. L. Melira v. D.R. Kliannu AIR 1971 Del. 1 (FB) and following the decision of the Suprerne Court in Deep Chand Vs. The State of Uttar Pradesh and Others, and Northern India Caterers Private Ltd. and Another Vs. State of Punjab and Another, came to the conclusion that the statute which Was void within the meaning of Article 13(2) of the Constitution is not existent for all purposes including repeal, amendment or enforceability. In short, it was laid down that no void section can be made valid by an amendment. Here no re-enactment has been made. What has been made is amendment with retrospective effect in order that the relevant provision of the Excise Rule and the struck down Notification issued thereunder becomes valid and operative. The apex Court did not countenance such approach and it follows, therefore, that such validating Regulation cannot validate the invalidity of the Rule or the Notification in question.

It is well-settled that a Legislature has the legislative competence to render ineffective the earlier judicial decisions by removing or altering or neutralizing the legal basis in the un-amended law on which such decisions were founded, even retrospectively. But, such power cannot be exercised to render ineffective the earlier judicial decisions by making a law which simply declares the earlier judicial decisions as invalid or not binding. For such power if exercised would not be a legislative power but a judicial power which cannot be encroached upon by a Legislature under the Constitution of India. This is the consistent view of the Supreme Court. Mr. A. S. Roy, the learned Advocate for one of the writ Petitioners, in this connection has cited the decision of the Supreme Court in The State of Hatyana v. Karnul Co-op. Farmer''s Society Ltd. and Ors. wherein the Supreme Court has considered its earlier decisions on this point and declared the law as stated above.

In this case, as hereinbefore held, the provision of Section 31A of the Regulation is invalid and ineffective. But, Section 6(1) of the said amendment Regulation of 1984 simply declares that the levy of excise earlier made oh the basis of the earlier law are not to be deemed to be invalid,-and on the contrary the same should be treated as validly assessed or collected in accordance with law. On the basis of the law as stated above the provision of Section 6(1) in substance amounts to declaring earlier judicial decisions as invalid and not binding upon the authorities and hence must be held to be invalid as amounts to encroachment upon the judicial power by the Legislature of the State and, accordingly, the same is ultra vires to the Constitution of India as held by the Supreme Court in the case of State of Haryana and others Vs. The Karnal Co-op. Farmers'' Society Limited, etc. etc. and others, (Per N. Vcukatachala J.).

The next submission of both Mr. Bose and Mr. Roy was that Section 6(2) of the amended legislation that those who have got the refund will not be affected, but those who have not got the refund in terms of the order of the High Court would be affected and would not get. the refund, amounts to a clear discrimination. The distinction between persons concerned who have paid excise duty under a mistake and formed one particular class and those who have been refunded after forming another class, has no logic or reasonableness and is arbitrary and discriminatory.

In Jalan Trading Co. (Private Ltd.) Vs. Mill Mazdoor Union, the Supreme Court declared the provisions of Section 34(2) of the Payment of Bonus Act, 1965, discriminatory and violative of Article 14 of the Constitution. The reason was that although the Act was validly passed for giving minimum bonus irrespective of loss but it provided that the Act would not be applicable to the cases in respect of which industrial disputes were pending immediately before May 29, 1965, the date of promulgation of the Act. It was held that the classification on such basis was not reasonable and, as such, the same was held to be arbitrary and discriminatory. The provisions of Section 6(2) of the Amendment Regulation must also be held to be discriminatory and violative of Article 14 of the Constitution on the same reasoning of the Supreme Court. Accordingly, it is held that the provisions of Section 6(2) of the amending Regulation is ultra vires of Article 14 and is void as, in our view, there is no scope for making discrimination in respect of persons who had paid the excise duty under mistake of law, but have taken refund and those who paid but have not got refund even though the imposition and collection having already been declared illegal and inoperative.

In the aforesaid decision the Supreme Court also considered the case of Shib Sankar Dal Mills v. State of Haryana (Supra) wherein the Supreme Court observed that where public bodies recover people''s money, later discover to be erroneous levy, the ''Dharma of the situation'' admits of no equivocation. And further that there is no law of limits especially for public body for virtue of returning that was wrongfully recovered from whom it belonged. In this connection, provisions of Article 265 of the Constitution of India may be referred to. In this Article it is provided that tax shall be levied or collected only under the authority of law. According to the constitutional provision, not only levies but also collection of tax must be under the authority of law.

In the instant case, the right to get refund has been adjudicated and approved finally by this Court. Many dealers took back their money, but the writ Petitioners have been denied the benefit. The Division Bench held that the excise duty liable to be refunded was the property of the dealers within the meaning of Article 31(1) of the constitution. Article 31 is no longer there in the Constitution. But when the right to get refund accrued, Article 31 was in force and, thus, not only the collection became illegal, but also denial to'' refund the property of persons'' from whom collected without authority of law becomes illegal and also unconstitutional.

It is to be noted as already pointed out by us that retrospective amendment cannot validate the invalid levy and collection, and also cannot take away the force of the judgment already rendered on the basis of which the right to return accrued.

A point was raised on behalf of the Respondents that the writ Court being the Court of Equity should not. allow the refund which will amount to unjust enrichment. In support of this contention reliance, was placed on the decision of the Supreme Court in the case of State of Madhya Pradesh Vs. Vyankatlal and Another, as also in the case of Shib Sankar Dal Mills v. State of Haryana ( Supra). In the first case the Supreme Court observed that the burden of paying the amount in question had been transferred by the Respondents to the ultimate purchasers and, therefore, the Respondents were not entitled to get the refund and instead the persons on whom lay the ultimate burden to pay the amount would be entitled to get refund of the same. But as the persons who actually paid the amount could not be identified, the amount deposited was to be utilized for the purpose for which the Fund was created, namely, development of sugarcane. There is no question of refunding the amount to the Respondents who had not eventually paid the amount towards the Fund. Doing so would virtually amount to allowing the Respondents an unjust enrichment:, said the Supreme Court.

In this case sugar was declared as an essential commodity and a notification was issued by the Government under the relevant Sugar Control Order Fixing ex-factory prices for different sugar factories/The supply price was a little higher than the ex-factory price. The difference between the supply price and the ex-factory price was being deposited to the Madhya Pradesh Government sugar fund. The Government made several demands from the Respondent proprietors to credit the differences to the fund and the Respondents ultimately deposited Rs. 50,000 under protest. In the opinion of the High Court the State had levied and collected under the purported legal authority certain sum for which it had no legislative competence to do, and, therefore, the State must restore the same to the persons from whom it collected and cannot keep the same and further that the persons who could claim the same was the corresponding purchasers. The Supreme Court held that the High Court omitted to decide the question whether a particular purchaser could recover thereafter from the Respondents whatever excess collection had been made. On the question of refund of the amount in dispute the Supreme Court made the observations quoted above.

In Shib Sankar Dal Mill''s case (Supra) the dealers paid the market fees at the increased rate of 3 % raised from original 2%. The excess of 1 % over the original rate having been declared ultra vires, the whole amount became refundable to the dealers from whom it was recovered by the Market Committee concerned. The Market Committee contended that- the excess collection actually belonged to the purchasers upon whom the burden had been shifted. The Supreme Court held that the procedure adopted in Nawabgang Sugar Mill''s case (Supra) in a similar situation must usefully be adopted and the scheme of refund by the Market Committee and redistribution to the next purchasers according to their claims had -to be framed.

In both the cases there were definite and cogent materials to suggest that the amounts that had been illegally collected ultimately descended upon the consumers and in case such consumers could not be fixed up, a scheme for public utilisation of the amounts could be thought of. There were in both the cases definite and cogent materials to show that the amounts had been collected as such from the ultimate consumers.

In the instant case there is absolutely no material to show whether the excise duty that was paid in advance upon mistake of law was consumed by the dealers from their margin of profits or not. It is nobody''s case that the excise duty was recovered as such from the purchasers by the wine merchants. The dealership was obtained through public auction staking high amounts. No price control order fixing the price of India-made foreign liquor or beer was there. It was purely a question of contract involving high risk when the dealerships were obtained. The merchants were allowed a free hand in the matter of fixation of price and in so fixing the price there is no knowing how much of the duty paid in advance, if at all, was added- up in the selling price. In the circumstances, in our opinion there cannot be any illegal enrichment if the amounts collected are refunded rather, in our view, illegal enrichment, if any, is on the side of the State Administration if they are allowed to retain the collections instead of refunding to the dealers, who definitely paid the amounts and do not appear to have shifted the same separately upon the consumer public.

Considering all the aspects of the matter we are of the opinion that this case does not call for either to refuse the claim for refund or for evolving a scheme for redistribution of the amount paid through mistake of law.

In so far as the question of limitation is concerned, the plea of limitation has not been taken by any affidavit-in-opposition. However, even in the absence of the plea of limitation this point has been raised, the Supreme Court in Shib Sahkar Dal Mill''s case (Supra) held that there is no law of limitation, especially for public body for the virtue of returning what was wrongfully recovered to whom it belonged. The Supreme Court in the case of Sales Tax Officer v. Kanhaialal AIR 1959 S.C. 139 (142, para. 26, Per N.H. Bhagwati J.) held that a mistake u/s 72 of the Indian Contract Act can be a mistake of law as well as a mistake of fact. Whatever it may be, the limitation of three years must start from the date of knowledge of such mistake. In the instant case, the Petitioners applied to the Administration for refund of the respective amount within the period of three years from the date of discovery of mistake and filed a suit for recovery of the amount or writs of mandamus with directions upon the Islands Administration to pay the amounts. Furthermore, applications for refund were submitted long before the amending Regulation came into force, and that being the position the question for limitation does not and cannot arise. There is no question of waiver or estoppel applicable in this case, either.

In the result, in the view we have taken, the Wirt -petitions succeed and the following relief�s are granted:

(a) Section 31A of the Andaman & Nicobar Islands (Amendment) Regulation, 1984, is declared to be ultra vires to Article 14 of the Constitution of India.

(b) Section 6(1) and Section 6(2) of the said Regulation are also declared to be ultra vires as it is repugnant to the Constitution of India. Section 6(2) is declared ultra vires also of Article 14 of the Constitution of India. Both the sections are hereby struck down.

The Rules are made absolute.

Let a writ in the nature of mandamus be issued commanding the Respondents to cancel and or withdraw the impugned order of rejection, dated September .1, 1984, passed by the Respondent No. 3 being Annex, to the first two writ petitions and to refund to the said writ Petitioners the money illegally collected from them within a period of two months from the date. In respect of CO. No. 15642(W)/1984, the learned District Judge is directed to proceed with the appeal, namely, Money Appeal arising out of Money Suit No. 12 of 1980 in the light of our decision.

On the prayer of the learned Advocate appearing for the Respondents, there shall be a stay of operation of this order for a period of two months from date.

There shall be no order as to cost.

Bhagabati Prasad Banerjee, J.

I agree.