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PETITIONER: GEEP FLASHLIGHT INDUSTRIES LTD.

       Vs.

RESPONDENT: UNION OF INDIA AND ORS.

DATE OF JUDGMENT28/10/1976

BENCH: RAY, A.N. (CJ) BENCH: RAY, A.N. (CJ) BEG, M. HAMEEDULLAH SHINGAL, P.N.

CITATION:  1977 AIR  456            1977 SCR  (1) 983  1976 SCC  (4) 677

ACT:             Limitation--Period of limitation in respect of suo  motu         revision by Central Government to annual or modify any order         of erroneous refund of duty, when begins--Customs Act,  1962         Ss. 28, 131(1)(3)(5) scope of.

HEADNOTE:             The appellant succeeded before the revisional  authority         and  obtained  the orders of refund of duty levied and  col-         lected on the consignment of ten metric tonnes of  Manganese         dioxide.   As  no  action was taken, the  appellant  gave  a         notice on October 3, 1974 u/s 80 C.P.C. for institution of a         suit  for  recovery  of refund.  On February  10,  1975  the         respondent gave a notice u/s 131(3) of the Customs Act  1962         to the appellant for suo motu revision of the order  of  the         refund.   The Writ Petition filed in the Delhi  High  Court,         impeaching the said order was dismissed directing the appel-         lant  to raise all objections including those raised in  the         Writ Petition before the Central Government.         Dismissing the appeal by special leave, the Court             Held: (1) S. 28 of the Customs Act, 1962 speaks of three         kinds  of errors in regard to duties.  One is non-levy,  the         second  is short levy, and the third  is  erroneous  refund.         Levy is. linked to assessment.  In the process of assessment         two  kinds  of errors may occur.  One is non  levy  and  the         other  is short levy. The expression "erroneously  refunded"         means  refunded  by means of an order which  is  erroneously         made. [986 F-G]             (2) S. 131 (5) of the Customs Act does not speak of  any         limitation  in regard to revision by the Central  Government         of its own motion to annul or modify any order of  erroneous         refund of duty.  The provisions contained  in Section 131(5)         with  regard  to non-levy or short levy  cannot  be  equated         with erroneous refund in as much as the three categories  of         errors in the levy are dealt with in s. 28. [987 D-E]             (3)  Notice u/s 28 of the Customs Act speaks  of  demand         for money to pay back and the notice is required to be given         within  six months from the relevant date.  In the  case  of         erroneous  refund,  it would be six months from the date  of         actual  refund.  If no refund has in fact been made  limita-         tion  cannot be said to arise inasmuch as the relevant  date

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       u/s 28 in the case of erroneous refund speaks of the date of         refund.  In  the instant case the impugned order  dated  20,         April  1972 granted refund.  Grant of refund is  not  actual         refund. [986 G-H, 987 A]

JUDGMENT:         CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1830 of 1975.             Appeal  by  Special Leave from the  Judgment  and  Order         dated 10-9-75 of the Delhi High Court in Civil Writ Petition         No. 475/75.             Soli  Sorabjee, Ravinder Narain, Talat Ansari  and  Shri         Narain, for the Appellants.             V.P.  Raman, Addl. Sol. Genl. for India, S.K. Mehta  and         Girish Chandra, for the Respondent.         The Judgment of the Court was delivered by             RAY,  C.J.--This  appeal is by special  leave  from  the         judgment dated 10 September 1975 of the Delhi High Court.         984             The  appellant is a manufacturer of dry  battery  cells.         In October 1969 the appellant received a  consignment of ten         metric  tons of manganese dioxide.  The Assistant  Collector         levied  duty on the consignment under Tariff Item  28.   The         appellant  preferred  an  appeal.  The  Appellate  Collector         confirmed the order of the Assistant Collector.  The  appel-         lant  thereafter made an application to the  Revisional  Au-         thority.   The  Revisional  Authority held  that  the  goods         should  be assessed under Tariff Item 26 and ordered  refund         of duty.             The  appellant  asked for refund and sent  reminders  to         Customs Authorities for refund.             On  3  October 1974 the appellant gave  a  notice  under         section 80 of the Civil Procedure Code for institution of  a         suit for recovery of refund.             On 10 February 1975 a notice under Section 131(3) of the         Customs  Act 1962 referred to as the Act was. given  to  the         appellant for revision of the order of refund.             The  appellant impeached the aforesaid notice  dated  10         February 1975.  The notice inter alia stated that "since the         goods  ’were   processed ore, not meant  for  extraction  of         metallic manganese they ceased to qualify as an ’ore’ within         the normally accepted sense of the term as in item 26 Indian         Customs Tariff.  The notice thereafter said "It,  therefore,         appears to the Government that the appellate order does  not         appear  to  be sustainable.  Therefore, in exercise  of  the         powers  under  section 131(3) of the Customs Act,  1962  the         Government  of India proposes to annul the order  in  Appeal         No.  590-593/1972 passed by the Appellate Collector of  Cus-         toms, Calcutta".             The appellant made an application under Article 226  and         moved  the Delhi High Court.  The appellant in the  applica-         tion asked for a writ in the nature of prohibition restrain-         ing the "Opposite  party" thereto from taking any proceeding         pursuant  to the impugned notice. The appellant  also  asked         for a writ of certiorari to quash the notice. The  appellant         also  asked  for a writ of mandamus  not  to   withhold  the         excess duty paid by the petitioner and ordered to be refund-         ed.             The  contention of the appellant was that the  power  of         suo motu revision under section 131(3) of the Act in so  far         as  it relates to a case of non-levy or short levy  of  duty         must be exercised within the period of limitation prescribed         in  section  131(5) of the Act. In  short,  the  appellant’s         contention is that the power of suo motu revision  contained

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       in  section 131(3) of the Act is subject to  the  provisions         contained in section 131(5) of the Act.             The  provisions contained in section 131(3) of the   Act         at3  as follows:             "The Central Government may of its own motion annual  or         modify any order passed under section 128 or section 130."         985             The  provisions contained in section 131(5) of  the  Act         are as follows :--                             "Where  the  Central  Government  is  of                       opinion that any duty or customs has not  been                       levied  or  has been  short-levied,  no  order                       levying  or enhancing the duty shall  be  made                       under this section, unless the person affected                       by the proposed order is given notice to  show                       cause against it  within the timelimit  speci-                       fied in section."             Section 28 of the Act provides for notice for payment of         duties  not  levied, short-levied or  erroneously  refunded.         Under  section 28 when any duty has not been levied  or  has         been short-levied or erroneously refunded, the proper  offi-         cer  may,  within six months from the relevant  date,  serve         notice  on the person chargeable with  the  duty  which  has         not  been levied or which has been short-levied or  to  whom         the refund has erroneously been made, requiring him to  show         cause  why  he should not pay’ the amount specified  in  the         notice.             Counsel  for  the  appellant  extracted  the  provisions         contained in sections 28 and 131 (3) and 131 (5) of the  Act         in  support of the contention that any notice for  suo  motu         revision  by the Central Government in so far as it  relates         to  a case of non-levy or short levy of duty must  be  given         within  the  period  of six months from the  date  of  levy.         Counsel  for  the appellant further contended  that  if  the         Government wanted to revise orders for refund on the  ground         that there should not be any refund, it would also be a case         of short-levy, and, therefore, the limitation of six  months         as  provided  in  section  28  of  the  Act  should   apply.         Broadly  stated  Counsel for the  appellant  submitted  that         section 28 of the Act is a substantive provision relating to         notice for non-levy or short-levy and section 131(3) of  the         Act  is a procedural section and power under section  131(3)         of the Act cannot be exercised in such a manner as to render         section 28 of the Act nugatory.             The alternative contention of Counsel for the  appellant         is  that  power  under section 131(3) of the Act  is  to  be         exercised within a reasonable time and the periods mentioned         in  section 131 of the Act supply the yard-stick or give  an         indication of what is reasonable time.             The Delhi High Court held that all the objections  which         the petitioner wishes to raise to the notice, including  the         objections  raised  in the writ petition, should  be  raised         before the Central Government. The Delhi High Court,  there-         fore,  directed  the  Government to give a  hearing  to  the         appellant  and further held that the Government should  con-         sider  all the objections.  The Delhi High Court went on  to         say  that  the decision of the Government  should  be  taken         within  three months unless the appellant himself  took  ad-         journment and caused delay in the disposal of the case.  The         Delhi  High  Court  also said that if any money  was  to  be         refunded, .it should be refunded within two months from  the         date of the decision.              The provisions contained in section 28 of the Act speak         of  non-levy, short-levy and erroneous refund.   The  provi-         sions state that notice

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       986         of non-levy, short-levy or erroneous refund should be  given         within  six  months from the relevant date.   Section  28(3)         states what the "relevant date" means.  In the case of  duty         not  levied,  the "relevant date" is the date on  which  the         proper  officer  makes  an order for the  clearance  of  the         goods. In a case where duty is provisionally assessed  under         section  18  of the Act, the relevant date is  the  date  of         adjustment  of duty after the final assessment.  In  a  case         where duty has been ’erroneously refunded, the relevant date         is the date of refund. any other case, the relevant date  is         the date of payment of duty.             The  Additional  Solicitor General  contended  that  the         provisions  in  section  28 of the Act  indicated  that  any         notice  with  regard to non-levy,  short-levy  or  erroneous         refund,  require the person to show cause why he should  not         pay the amount specified in the notice.  This being the case         of  erroneous refund, the Additional Solicitor General  con-         tended that the limitation would be six months from the date         of  actual refund.  The order dated 20 April 1972, which  is         described as the order of refund, was as follows :--                             "I,  therefore,  allow the  appeals  and                       direct  that  the goods be  re-assessed  under                       Item  26 of the Indian Customs Tariff and  the                       consequential refund of duty granted."            It may be stated here that Tariff Item 26 speaks of  duty         on metallic ore and Tariff Item 28 speaks of duty on  Chemi-         cal and Pharmaceutical products.  The appellant succeeded in         appeal in  obtaining an order of refund.  It is an  admitted         feature of the case that refund has not in fact been made.             Counsel for the appellant contended that even if  refund         has  not been made, the date of refund will be the  relevant         date and six months. would be calculated from 20 April 1972,         when refund was ordered and, therefore, the notice dated  10         February 1975 will be hit by the provision of limitation  of         six  months from the relevant date.  The contention  of  the         appellant  is  wrong.  It is only where refund has  in  fact         been made and money has been paid, the relevant date will be         six months from the date of actual payment for refund.             The contention of the appellant that refund will also be         a  case of short-levy is not correct.  Section 28 speaks  of         three kinds of errors in regard to duties.  One is non-levy,         the second is short-levy and the third is erroneous  refund.         Levy  is linked to assessment.  Section     17th of the  Act         speaks  of assessment order.  In the process  of  assessment         two  kinds  of errors may occur.  One is  non-levy  and  the         other is short-levy.  Refund is dealt with in section 27  of         the  Act.  The expression "erroneously refunded"  means  re-         funded  by  means  of an order which  is  erroneously  made.         These are three categories of errors in regard to duties.             The notice under section 28 of the Act speaks of  demand         for money to pay back and the notice is required to be given         within  six months from the relevant date.  In the  case  of         erroneous  refund, it would be six months from the  date  of         actual refund.  If no refund has in fact been made,  limita-         tion  cannot be said to arise inasmuch as the relevant  date         under section 28 in the ease of erroneous refund         987         speaks  of  the date of refund.   The order dated  20  April         1972 granted refund. Grant of refund is not actual refund.              Chapter  XV  contains sections 128 to 131 Of  the  Act.         Chapter  XV  speaks of Appeals and  Revision.   Section  128         relates  to appears, Section 130 deals with powers of  revi-         sion of Board.   Section  131 speaks of revision by  Central         Government.   Revision  can  be  asked for  by  the  persons

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       aggrieved  by  any order passed under section  128,  or  any         order  passed under section 130.   Section  131(2)  provides         limitation  of  six  months for an  application  made  under         section 131(1) of the Act.            Once  the  provisions  contained in  section  131(3)  are         attracted,  the  Central Government may of  its  own  motion         annul  or  modify   any order passed under  section  128  or         section  130.    This  provision  is the  power  of  Central         Government  to  annul  or modify any order.  This  power  is         exercised by the Central Government suo motu.  Of course the         power  is  to be exercised on giving notice  to  the  person         concerned.             The  provisions contained in section 131(5) of  the  Act         speak limitation only with regard to non-levy or short-levy.         It is significant that section 131(5) does not speak of  any         limitation in regard to  revision by the Central  Government         of its own motion to annul or modify any order of  erroneous         refund of duty.   The provisions contained in section 131(5)         with regard to non-levy or short-levy cannot be equated with         erroneous  refund  inasmuch  as the  three  categories    of         errors in the levy are dealt with separately.             The  appellants  prayers  for writs  of  Certiorari  and         mandamus   are  misconceived.    There is  no  order  either         judicial  or   quasi-Judicial which can attract  certiorari.         No  mandamus  can  go  because  there is  nothing  which  is         required  to be done or for borne under the  Act. The  issue         of  the notice in the present case requires the  parties  to         represent their case.  There is no scope for mandamus to  do         any  duty or act under the statute.   A writ of  prohibition         cannot  be  issued for the obvious reason that  the  Central         Government has jurisdiction   to revise.             For  the  foregoing reasons, the  appeal  is  dismissed.         The Central Government will hear the appeal on merits.    In         view of our conclusion that there is no bar of limitation in         the present case it will not be open to the parties to  take         any  plea of limitation.   The Central Government will  hear         the  matter as expeditiously as possible.  In case the  Cen-         tral Government will hold that the order of refund is valid,         the Central Government will pay the amount.   We specify the         period  of  two  months from the date of the  order  as  the         period during which payment will be made.   The parties will         pay and bear their   own costs.         S.R.                                                  Appeal         dismissed.         13 --1338SCI/76         988