Sovereign Liquor Distributors vs State Excise Superintendent and Others

G. Bikshapathy, J.—The Writ Petition is filed seeking directions to the Respondents to refund the countervailing duty of Rs. 38,880/- with interest @ 18% and also the interest on security deposit of Rs. 25,000/- @ 18% from 26-6-1982 to 25-4-1988.

The petitioner was holding Licence under the A.P. Excise Act issued by the Excise Superintendent, Chittoor. He was issued with a import permit No. 99/80-81, dated 30-12-1980 for importing certain quantities of Hercules XXX Rum and Sovereign Brandy from Khoday, R.C.A. Industries, Bangalore. The petitioner paid the advance countervailing duty of Rs. 38,880/- through challan No. 813, dated 14-12-1980. As per the Rules, the goods have to be imported within 90 days, the extension was obtained. However, even during the extension period, the liquor was not released and the Distillery could not make any supply to the petitioner. Accordingly, the non-supply certificate was issued. In view of the fact that the Import Permit was not utilised, the petitioner applied for cancellation and also for refund of the duty.

It is the case of the petitioner that the Sub-Inspector concerned did not transmit the papers to the authorities. Therefore, a fresh application was submitted on 10-7-1982. It is also the case of the petitioner that he stopped the business from June, 1982 itself and applied for refund of Security Deposit on 26-6-1982. The petitioner submits that after protracted correspondence, the Security Deposit of Rs. 25,000/- was refunded on 25-4-1988. But, however, the grievance of the petitioner is that since the amount of Security Deposit was illegally withheld by the authorities, the petitioner is entitled for commercial interest @ 18%, from 26-8-1982 (sic. 26-6-1982) till the date of payment. It is also the case of the petitioner that since the Import Permit was not utilised, the countervailing duty paid in advance cannot be retained by the authorities and the same has to be refunded with interest. The petitioner having been unsuccessful before the Commissioner of Excise, made a representation to the Government and the Government has informed the petitioner that his case is rejected holding that there is no provision for refund of the amount under the Act. Therefore, the present Writ Petition is filed seeking appropriate directions.

Heard the learned counsel for the Petitioner and also the learned Government Pleader.

It is the case of the petitioner that the countervailing duty has to be paid in advance for obtaining import permit. Since the import permit did not materialise on account of inability to supply the liquor by the Distillery, the question of retaining the amount with the authority does not arise.

The only question that arises for consideration is whether there is no provision under the Excise Act to refund the countervailing duty, in the event the import permit is not utilised?

We have considered this aspect. We find that there is no provision for refund of the countervailing duty under the Act. But, however, the fact cannot be disputed that the import permit which was granted to the petitioner on which the countervailing duty was collected in advance did not materialise and therefore the withholding of the amount by the Respondents cannot be said to be valid. The advance duty is collected only to facilitate the Government for easy collection of revenue. But, since the import permit has not materialised we are of the view that the amount is liable to be refunded. Merely because there is no provision to refund the money, the Government cannot withhold the amount illegally. Therefore, the action of the Respondents in withholding the amount appears to be illegal and arbitrary. Hence, there shall be a direction to refund the amount of Rs. 38,880/- collected from the petitioner towards the advance of countervailing duty.

The further question that arises for consideration is whether the petitioner is entitled for the interest for the amounts paid as countervailing duty and also the security deposit which was withheld for a long period?

The learned counsel for the petitioner submits that under sub-section (3) of Section 65 of A.P. Excise Act, any dues to the Government shall be recoverable with interest at such rate as may be prescribed. Therefore, on the same analogy the petitioner submits that when the Government is entitled to recover the money with interest, the same principle should also apply in case of refunds to the parties.

In the counter filed on behalf of the Respondents, it is stated that the petitioner initially deposited countervailing duty on 14-12-1989 (sic. 14-12-1980) and import permit was granted to him. Though the petitioner stated that necessary certificates were sent to the Excise Sub-Inspector for transmitting the same to the authorities for refunding the countervailing duty, therefore the petitioner was ordered to submit fresh certificates. However, after prolonged correspondence, the Security Deposit was released to the petitioner and the countervailing duty was not refunded as there is no provision in the Act. It is admitted case that the petitioner has filed all the necessary papers through his letter dated 31-12-1983 for the second time.

It is now well settled by the Supreme Court that whether (sic. where) a person is deprived of the use of the money to which he is legitimately entitled, he has a right to be compensated for the deprivation, call it by another (sic. any) name. It may be called interest, compensation or damage. This is the principle u/s 34 of the CPC and there is no reason or principle to hold otherwise in the instant case (See: Secretary, Irrigation Department, Government of Orissa and others Vs. G.C. Roy, . Jugal Kishore Prabhatilal Sharma and others Vs. Vijayendra Prabhatilal Sharma and another, .

Inasmuch as the amount was withheld by the State on the ground that there is no provision in the Act, we are inclined to direct the Respondents to pay 15% interest from 1-12-1984 on the countervailing duty till the date of payment. The petitioner also claimed interest on security deposit. We are not inclined to award interest on the ground that the Security Deposit is refundable after making necessary enquiries as to the amounts which are outstanding against the petitioner. Merely because the petitioner has sent application for refund of the security deposit that would not be payable immediately and the same is subject to the scrutiny. Therefore, we are not inclined to award any interest on the security deposit. The Respondents shall make the payment as ordered hereinabove within a period of two months from the date of receipt of this order.

The Writ Petition is allowed to the extent indicated above. There shall be no order as to costs.