THE DEPUTY COMMISSIONER ETC. versus CONSUMER CO-OPERATIVE STORES LTD.

Citation: [1998] SUPP. 3 S.C.R. 454 · Decided: 09-12-1998 · Supreme Court of India · Bench: SUJATA V. MANOHAR · Disposal: Dismissed

Judgment (excerpt)

A 
B 
THE DEPUTY COMMISSIONER ETC. 
v. 
CONSUMER CO-OPERATIVE STORES LTD. 
DECEMBER 9, 1998 
'[SUJATA V. MANOHAR AND G.B. PATTANAIK, JJ.] 
Excise-Refund-Doctrine of 'unjust enrichment'-App/icabi/ity of-
Notification prescribing excise duty to be payable by licencees on the vending 
of Indian made foreign liquor issued by Chief Commissioner under R.29 of 
C Andaman Excise Rules, 1934-Licencees paying the duties in advance-
High Court, on challenge, set aside the said notification and directing the 
Department to pass final orders on application for refund in certain other 
cases as well-But before the refund of the duty, President promulgating 
Andaman & Nicobar Islands (Amendment) Regulation, 1984 authorising 
D levy of duty on such goods retrospectively-High Court struck down Section 
31 A of the :Jmended Regulation and held Section 6(1) & (2) also invalid and 
directed the Department to refund the duty with observation that in this case 
the doctrine of 'unjust enrichment' was not applicable as it was nobody's 
case that the duty paid in advance was recovered by the licencees from 
purchasers-High Court's view upheld-Andaman Excise Rules, I934, R 
E 29-Andaman & Nicobar Islands (Amendment) Regulations, 1984-Sections 
3/A and6(1) & (2). 
The respondent had obtained licence to vend Indian made foreign liquor 
on the basis of a public auction. The State issued a notification in exercise 
of powers conferred under Rule 29 of Andaman Excise Rules, 1934 
F prescribing the rate of excise duty payable by the licensees-respondents on 
such liquor. Respondents filed a writ petition challenging the aforesaid 
notification. High Court held that the notification was invalid as the Chief 
Commissioner had no power to levy the excise duty in question. On appeal 
before the Division Bench, the order was confirmed. As the duties were 
being paid in advance, the High Court directed the department to refund the 
G duty to the licencees and to some other applicants as well. But before the 
refund could be made in the other cases the President promulgated the 
Andaman & Nicobar Islands (Amendment) Regulation 1984, authorising 
imposition of excise duty with retrospective effect. Respondents again moved 
to the High Court challenging the legality of the amended provision and for 
H refund of alleged illegal duties. The Divisions Bench of the High Court held 
454 
DY. COMMR. ETC. v. CONSUMER CO-OP. STORES LTD. [PATTANAIK,J.] 
455 
Section 31A of the Amended Regulation as ultra vires. Sections 6(1) and 6(2) A 
of the Regulation were also held to be invalid and directed refund of duty with 
the further observation that the doctrine of 'unjust enrichment' was not 
applicable as it was no body's case that the duty paid in advance was recovered 
by the licencees from the purchasers. Hence this appeal. 
It was contended by the appellant that in view of the non-obstante clause B 
in Section 6 of the Amended Regulation, the duty which had been collected 
can be held to be a valid levy as speci.al duty under Section 31A of the 
Amended Regulation. It was also contended that even ifthe levy can be held 
to be not authorised the same could not be refunded applying the principle 
of 'unjust enrichment'. 
Dismissing the appeal, this Court 
HELD : The principles underlying the doctrine of 'unjust enrichment' 
will have no application to the case in hand, in view of the findings arrived 
by the High Court on consideration of the entire material on record that it 
c 
is no body's case that excise duty was recovered from the purchaser by the D 
wine merchants. Since the burden has not been passed on to 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 the doctrine of 'unjust enrichment'. [458-D-E] 
State of Madhya Pradesh v. Vyankatlal Anr., [1985] 2 SCC 544 and E 
Mafatlal Industries ltd. v. Union of India, [1997[ 5 SCC 536, distinguished. 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 9170of1994 
Etc. 
From the Judgment and Order dated 31.1.94 of the Calcutta High Court 
in C.0.No 5188 (W) of 1983. 
F 
WITH 
C.A. Nos. 1803-1804 of 1996. 
A.S. Nambiar (S.W.A. Qadri) and P. Parmeswaran for the Appellants. 
M.L. Verma, lmtiaz Ahmad. Anup Banerjee, E.C. Vidyasagar and A. G 
Sharan for the Respondents. 
The Judgment of the Court was delivered by 
PATTANAIK. J. In these appeals the Judgment of the Division Bench 
of Calcutta High Court

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