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PETITIONER: THE DEPUTY COMMISSIONER, ANDAMAN DISTRICT, PORT BLAIR.

       Vs.

RESPONDENT: CONSUMER CO-OPERATIVE STORES LIMITED., HARI NARAYAN ARORA.

DATE OF JUDGMENT:       09/12/1998

BENCH: SUJATA V. MANOHAR, G.B. PATTANAIK.

ACT:

HEADNOTE:

JUDGMENT: J U D G M E N T PATTANAIK. J. The these appeals the Judgment of the Division Bench of Calcutta High  Court  31st  of  January,  1994  is  under challenge  and  the question for consideration is whether in view of Andaman & Nicobar  Islands  (Amendment)  Regulation, 1984  the  respondents  are  entitled to claim refund of the excise duty levied and paid.   The  further  question  which arises  for  consideration  is whether by application of the principle of ’unjust enrichment’ the said respondents can be denied of getting the refund in question. The  respondents had obtained licence to vend Indian made foreign liquor on the basis of a public auction.    The Chief  Commissioner  of  Andaman  & Nicobar Islands issued a notification purporting to be  one  in  exercise  of  powers conferred  under  Rule  29  of  Andaman  Excise  Rules, 1934 prescribing  the  rate  of  excise  duty  payable   by   the licensees-respondent on  such Indian made foreign liquor.  A licensee, Jagannath of Middle Point, Port Blair filed a writ petition challenging  the  aforesaid  notification  and  the notification   was   held   to   be  invalid  as  the  Chief Commissioner had  no  power  to  levy  the  excise  duty  in question.  Against the Judgment of the learned Single Judge, an  appeal  was preferred to the Division Bench but the said appeal was dismissed and the Judgment of  the  Single  Judge was confirmed.      The   Excise  Authorities  did  raise  a contention before the Division Bench of the High Court  that the  licensees  have  realised the amount from the customers and as such should not get the refund in  question  but  the said contention  was negatived by the High Court.  After the appeal was dismissed, the amount realised from said licensee Jaganath was refunded.  In view of the aforesaid Judgment of the  Division  Bench  of  Calcutta  High  Court  the   other licensees  also applied for refund to the Excise Authorities but as no action was  taken  thereon,  writ  petitions  were filed.   Those  writ  petitions  were  disposed  of  with  a direction to the Excise Authorities to pass final orders  on the application  for  refund.    The Excise Authorities then took  steps  for  refunding  the  amount   collected   after complying   with  the  formalities  but  before  the  refund

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vouchers could be finally signed, a notification was  issued on  1st  of  September,  1984  by  the  president  of India, promulgating  the  Andaman  &  Nicobar  Islands  (Amendment) Regulation  1984,  authorising  imposition  of  excise  duty w.e.f.  24th of October, 1973 on Indian made foreign  liquor notwithstanding  any judgment, decree or order of any court. In view of the aforesaid amendment of the Excise Regulation, the Excise Authorities of Andaman & Nicobar Islands rejected the prayer for refund of the duty and the  respondents  then moved  the  High  Court  in  writ  petitions challenging the legality of the amended provision  and  seeking  a  writ  of mandamus to the appellant to refund the alleged illegal levy collected by  the Excise Authorities.  The Division Bench of the Calcutta High Court by the  impugned  judgment  came  to hold  that  Section  31A  of  the  Andaman & Nicobar Islands (Amendment) Regulation, 1984 is ultra vires and Section 6(1) and 6(2) of  the  Regulation  are  also  invalid.    On  the question   of  applicability  of  the  principle  of  unjust enrichment the high Court came to the conclusion that  there is  absolutely  no materials to show whether the excise duty that was paid in advance was  consumed  by  the  dealers  by their  margin of profits or not and it is nobody’s case that the excise duty was recovered as such from the purchaser  by the wine  merchants.   Consequently, the principle of unjust enrichment has no application.  With these conclusions, writ applications were allowed with the direction that the amount collected as excise duty from the licensees be refunded. Mr.  Nambiar, the learned Senior Counsel,  appearing for  the appellants contended that in view of Section 31A of the Amendment Regulation, 1984, the excise duty  which  have been  collected  can  be held to be a special duty under the amended provisions and in view of the non obstante clause in Section 6 of the Amendment Regulation,  notwithstanding  the earlier  judgment  of  the  High  Court  striking  down  the notification dated 24th of October, 1973, the duty which had been collected can be held to be a  valid  levy  as  special duty   under   Section   31A   and,  therefore,  the  Excise Authorities had rightly refused the refund  application  and High  Court  committed  error in allowing the Writ Petition. Though  the  learned  counsel  had  raised   the   aforesaid contention  while  beginning  his arguments but later on did not pursue the  same  being  faced  with  the  problem  that subsequent  to insertion of Section 31A, no notification has been issued by the Administrator in the  Andaman  &  Nicobar Islands Gazette, specifying the levy of special duty.  Since issuance  of  a  notification  by  the  Administrator in the Andaman & Nicobar Islands Gazette  is  a  pre-condition  for making  any levy under Section 31A and the said pre-conditon has not been satisfied, Mr.   Nambiar,  the  learned  Senior Counsel,  did  not  pursue  his  argument  that  the levy in question can be held to be a  valid  levy  as  special  duty contemplated  under Section 31A of the Amended Regulation of 1984. Mr.  Nambiar, the learned  Senior  Counsel,  however vehemently  argued  that  even if the levy can be held to be not authorised by law but the same  having  been  collected, the licensees are not entitled to refund of the same and the said  relief  can  be  rejected by applying the principle of unjust enrichment.  In support of his contention  he  placed reliance  on  the  decision of this Court in State of Madhya Pradesh v.  Vyankatial and Anr.    1985(2)SCC  544  and  the Constitution  Bench  decision  of  this  Court  in  Mafatlal Industries Ltd., vs.  Union of India 1997(5)SCC 536.  In the first case the Court held that  the  burden  of  paying  the amount in question was transferred by the respondents to the

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purchasers and, therefore, the respondents were not entitled to  get refund and only the persons on whom lay the ultimate burden to pay the amount would be entitled to get  a  refund of the  same.  In the aforesaid case under the Madhya Bharat Sugar Control Order, 1949, the supply  price  of  sugar  had been  fixed  higher  than its ex-factory price and the sugar factories were directed to credit the difference to  a  fund called "sugar  fund".  the validity of the said notification could not be sustained in the Supreme Court but all the same no refund was allowed on the  finding  that  the  burden  in question had   been  transferred  to  the  purchasers.    In Mafatlal’s case  1997(5)  SCC  356,  the  majority  judgment dealing with the question of unjust enrichment held :         "The    doctrine    of     unjust         enrichment   is   a   just   and  salutary         doctrine. No person can  seek  to  collect         the  duty  from both ends. In other words,         he  cannot  collect  the  duty  from   his         purchaser  at one end and also collect the         same duty from the  State  on  the  ground         that   it  has  been  collected  from  him         contrary to law. The power of the Court is         not meant to  be  exercised  for  unjustly         enriching a person." The  principles  underlying  the doctrine of ’unjust enrichment’ as culled out from the aforesaid  two  decisions will have no application to the case in hand, in view of the findings  arrived  at  by the High Court on consideration of the entire materials on record that it is nobody’s case that the excise duty was recovered from the purchaser by the wine merchants.  Since the burden has not been passed on  to  the purchaser  as  found  by  the High Court and the levy having been held to be unconstitutional, the  State  would  not  be entitled  to  resist  the  claim of refund by application of doctrine of ’unjust enrichment’.  We, therefore, do not find any infirmity with the  directions  of  the  High  Court  to refund  the  illegal  levy  collected  from the respondents. ’The appeals accordingly fail and are dismissed, but in  the circumstances  of  the  case,  there  will be no order as to costs. It was submitted before us that  the  entire  amount has   been   deposited   in   Court.  If  that  be  so,  the respondents-licensees will be entitled to receive the amount from the High Court.