At, High Court of Judicature at Bombay
By, THE HONOURABLE MR. JUSTICE A.P. SHAH & THE HONOURABLE MR. JUSTICE M.L. PENDSE
For the Appearing Parties: ----
( 1 ) THIS Notice of motion is taken out by the petitioners for directing the respondent No. 2 to refund the amount of Rs. 20,66,760. 21 alongwith interest at the rate of 15% p. a. from July 30, 1991 till the date of payment. The petitioners also request that respondent No. 2 should be committed under the provisions of Contempt of Courts Act for deliberately flouting and disobeying writ issued by this court on July 30, 1991. To appreciate the grievance of the petitioners, only few facts are required to be stated. The petitioners filed writ petition No. 284 of 1984 in this court under Article 226 of the constitution for setting aside the order passed by respondents rejecting the claim for refund of excise duty recovered without authority of law on the ground that the claim was barred by limitation. The Division Bench of this court by judgment dated July 30, 1991 set aside the order passed by respondent No. 2 and directed the respondent No. 2 to verify the claim for refund within a period of twelve weeks from the date of judgment. The respondents were directed to grant claim for refund within a period of twelve weeks. The judgment further provided that in the event of respondents' failure to comply, the respondents shall be liable to pay interest to the petitioners at the rate of 15% p. a. on the amount of refund from the date of judgment till the date of payment.
( 2 ) BEFORE expiry of twelve weeks, the Parliament amended the provisions of Section 11b of central Excise Act and the amending provisions came into affect from September 20, 1991. In accordance with the amended provisions, it has become necessary for an assessee claiming refund to establish that the excise duty paid and recovered by excise authority was not passed on to the purchasers. On enactment of Section 11b, the respondents took out Notice of motion No. 547 of 1991 on October 25, 191. The prayer made in the motion by the respondents was direction to the petitioners to produce documents to establish that the incidence of duty was not passed to any of the person. The respondents also sought extension of time to complete the verification of the refund claim. The motion came up for hearing before the Division Bench of this Court on February 20, 1992 and the Division Bench declined to pass any order and motion was disposed of with the order `no order. The respondents did not challenge the order of the division Bench by filing any appeal before the Supreme Court and that order has become final. In spite of refusal of the Division Bench to grant relief sought by the respondents which was obviously because of the amended provisions of Section 11b of the Central Excise Act, the respondents did not take any step to carry out the writ of this Court. the petitioners thereupon took out the present Notice of motion on April 13, 1992.
( 3 ) SHRI Desai, learned counsel appearing on behalf of the respondents, submitted that the respondents are not bound to carry out the writ issued by this Court on July 30, 1991 in view of amendment of Section 11b of the Act. The learned counsel urged that the respondents had taken out Notice of motion No. 547 of 1991 in view of the amended provisions of Section 11b, but the court declined to pass any order thereon and in spite of that, the respondents are entitled to ignore the writ in view of the amendment. It is not possible to accede to the submission of the learned counsel. whatever might have been the claim, once a Division Bench of this Court declined to grant relief to the respondents in view of the amended provisions, then it is not open for the respondents to insist that even the writ will not be honoured. Realising the futility in the submission. Shri Desai tried to contend that the Division Bench declined to pass order on the motion taken out by the respondents since it was felt that the proper remedy is to seek review of the judgment delivered on July 30, 1991. We decline to entertain any such submission because the record of this Court does not indicate that the Division Bench dismissed the motion taken out by the respondents for any such reason. In our judgment, the respondents have clearly disobeyed the writ issued by this court by not making payment within the stipulated period.
( 4 ) SHRI Desai then submitted by referring to decision of Gauhati High Court reported in 1992 (62) E. L. T. 3 (Gau.) (Kitply Industries Ltd. v. C. Syiemiang) that once Section 11b was amended, then the department can never be guilty of committing contempt for not obeying the orders of the Court. We are afraid, we cannot accede to such extreme submission. The writ issued by this court cannot be nullified in this manner and more so when the department sought modifi
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cation of the writ and that prayer was turned down. ( 5 ) IN our judgment, the respondents have clearly disobeyed the writ issued by this court. Before committing respondents No. 2 under the Contempt of Courts Act, we propose to give one more opportunity to the respondents to refund the excise duty as claimed by the petitioners. We direct respondent No. 2 to deposit Rs. 20,66,760. 21 in this Court within one week from today. In case the respondent No. 2 fails to make deposit, then further orders will be passed.