SCA/6244/1990 1/6 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 6244 of 1990 For Approval and Signature: HONOURABLE MR.JUSTICE D.A.MEHTA HONOURABLE MR.JUSTICE Z.K.SAIYED ============================================================================ 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ===================================================== LUTHRA CHEMTEX INDUSTRIES (P) LTD. & 1 - Petitioner(s) Versus UNION OF INDIA & 2 - Respondent(s) ===================================================== Appearance : MR KAMAL TRIVEDI SR. ADVOCATE with MR RAKESH GUPTA & UDAY JOSHI for M/S TRIVEDI & GUPTA for Petitioner(s) : 1 - 2. MR YN RAVANI for Respondent(s) : ===================================================== CORAM : HONOURABLE MR.JUSTICE D.A.MEHTA and HONOURABLE MR.JUSTICE Z.K.SAIYED Date : 23/04/2008 ORAL JUDGMENT SCA/6244/1990 2/6 JUDGMENT (Per : HONOURABLE MR.JUSTICE D.A.MEHTA) 1. This petition has been preferred on 21.8.1990 with the following prayers: A) Your Lordships may be pleased to issue a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ, order or direction, directing the respondents their servants and agents to refund the amount of Rs. 74,19,642.27 paid by the petitioner company as excise duty on traders' profit along with the interest at the rate of 18% per annum from the date of the order passed by the Collector of Central Excise (Appeals), Bombay (Annexure 'A” hereto); B) Pending the hearing and final disposal of the present petition, Your Lordships may be pleased to pass an appropriate order directing the respondents, their servants and agents to refund the amount of Rs. 74,19,642.27 to the petitioner company; C) An ex-parte ad-interim relief in terms of para 8(B) above may kindly be granted; D) Any other further relief as may be deemed just and proper in the facts and SCA/6244/1990 3/6 JUDGMENT circumstances of the present case may also be granted. 2. On 12.12.1990 when the petition came to be admitted, the following ad-interim direction came to be issued: “It is ordered that the respondents shall issue a crossed cheque in favour of the petitioner – company for an amount of Rs. 74,19,642.27 ps. The petitioner – Company shall deposit the said cheque in his account with a Nationalised Bank. The petitioners are directed to give bank guarantee against the said amount for 75% of the amount. The petitioners are also directed to file an undertaking that on receiving cheque, they will deposit the same in their bank account and see that the bank guarantee as ordered by this Court is furnished in favour of the respondents. For the remaining 25% of the amount, the petitioners shall furnish security to the satisfaction of the respondent No. 3 within 10 days from the date on which the cheque is received by the petitioners. These conditions of bank guarantee and security are imposed upon the petitioners because it is contended by the learned Counsel for the respondents that against the order passed by the Collector, appeal is pending before the CEGAT and that SCA/6244/1990 4/6 JUDGMENT that appeal is likely to be allowed. The petitioners shall execute bank guarantee for a period of two years, i.e. to say till the appeal is decided by the CEGAT. If the appeal is not decided by the CEGAT during that period, the petitioners shall renew the bank guarantee. Petitioners shall furnish bank guarantee within fifteen days from the receipt of the cheque from the respondents. In any case, if the Special Civil Application No. 8598 of 1990 is allowed by this Court, then the petitioners would refund the amount with 15% interest. The respondents are directed to pay the amount as stated above within eight weeks from today.” 3. It is an accepted position between the parties that the respondent – department has returned the amount of Rs. 74,19,642.27ps as directed by this court in January, 1991. In the circumstances, so far as principal prayer is concerned, no further order is required to be made. 4. It is necessary to note that on the date the petition was admitted, namely, 12.12.1990, respondent – department had preferred an appeal before the CEGAT against the order of Collector (Appeals) passed on 19.3.1990, whereunder, the petitioner – assessee had SCA/6244/1990 5/6 JUDGMENT succeeded. The stay application filed by respondent- department came to be rejected by the Tribunal vide order dated 13.11.1990. Against the said order dated 13.11.1990, respondent – department had preferred separate petition being Special Civil Application No. 8598/1990 which came to be admitted with a direction to hear the same along with the present petition vide order dated 12.12.1990. However, subsequently it was found, as the record reveals, that the petition filed by the respondent – department had not been affirmed. Accordingly, vide order dated 23.4.1999 this Court had granted time up to 7.5.1999 for removal of the defects. Admittedly, due to non-removal of the defects pointed out by the Registry, Special Civil Application No. 8598/1990 came to be rejected. 5. During the pendency of the present proceedings, vide order dated 10.7.1996, the Tribunal finally decided the appeal filed by the department upholding the order of Collector (Appeals). It is an accepted position that the said order of the Tribunal has attained finality and has not been challenged by the respondent – department. 6. In the aforesaid fact situation, it is apparent that the petitioner became entitled to refund of a sum of Rs. 74,19,642.27ps without any cloud over such entitlement. Hence, the interim directions made by the Court are required to be confirmed. Accordingly, it is held that the petitioner is entitled as a matter of right to refund of a sum of Rs. SCA/6244/1990 6/6 JUDGMENT 74,19,642.27ps, which has already been received by the petitioner – company. In so far as furnishing of bank guarantee to the tune of 75% of the said amount is concerned, if the said bank guarantee furnished by the petitioner company is valid and is existing today, the same shall stand discharged. 7. Though in the affidavit-in-reply filed by respondent – revenue in the present proceedings, a plea based on amended provisions of section - 11B of the Central Excise Act, 1944 is raised and it is contended that the petitioner is not entitled to refund on the principle of unjust enrichment at the time of hearing, the learned counsel for the respondent – department has not pressed the said contention in the facts of the present case as admittedly no duty had ever been paid by the petitioner or recovered by the department. 8. The petition is accordingly disposed of. Rule made absolute to the aforesaid extent. There shall be no order as to costs. (D.A. MEHTA, J.) (Z.K. SAIYED, J.) mandora/