Supreme Court of India
Mafatlal Industries Ltd vs Union Of India on 28 July, 1993
Bench: A.M. Ahmadi, K. Ramaswamy, S.C. Agrawal, Yogeshwar Dayal
CASE NO.: Appeal (civil) 3255 of 1984 PETITIONER: MAFATLAL INDUSTRIES LTD. RESPONDENT: UNION OF INDIA DATE OF JUDGMENT: 28/07/1993 BENCH: A.M. AHMADI & K. RAMASWAMY & S.C. AGRAWAL & YOGESHWAR DAYAL & B.P. JEEVAN REDDY & N.P. SINGH & N. VENKATACHALA JUDGMENT:
JUDGMENT 1995(3) Suppl.SCC 316 = 1995(5) SCALE 601 with Civil Appeals Nos. 3256 of 1984 and 289 of 1991 Etc The Order of the Court is as follows
1. By an order dated 14-8-1985, a Division Bench comprising Hon'ble Mr Justice P.N. Bhagwati and Hon'ble Mr Justice Ranganath Misra ordered this group of matters to be placed before a Bench of seven Judges as in their view the decision of the Constitution Bench comprising five Judges in the case of STO v. Kanhaiya Lal Mukundlal Saraf 1959 SCR 1350 : 1959 AIR(SC) 135] required reconsideration. Subsequent to this order, certain other matters also came on to be tagged on with this batch of appeals. While making that order it appears that the attention of the Division Bench was not drawn to a seven-Judge Bench decision in the State of Kerala v. Aluminium Industries Ltd. [ 1965 (16) STC 689 ]
2. Mr F.S. Nariman, the learned counsel who opened the submissions on behalf of the appellants/petitioners, stated that the decision in Kanhaiya Lal case 1959 SCR 1350 : 1959 AIR(SC) 135] has been "expressly approved" on both the points in the case of State of Kerala [ 1965 (16) STC 689 ]. He placed emphasis on the following observation "There is no doubt in view of the decision of this Court in STO v. Kanhaiya Lal 1959 SCR 1350 : 1959 AIR(SC) 135] that money paid under a mistake of law comes within the word 'mistake' in Section 72 of the Contract Act and there is no question of estoppel when the mistake of law is common to both the parties, which was the case here inasmuch as the respondent did not raise the question relating to Article 286 of the Constitution and the Sales Tax Officer has no occasion to consider it. In such a case where tax is levied by mistake of law it is ordinarily the duty of the State subject to any provision in the law relating to sales tax and no such provision has been brought to our notice) to refund the tax. If refund is not made, remedy through court is open......"
This being the position and in view of the observations extracted above, we feel it desirable that the matters be placed for decisions before a larger Bench so that if the aforesaid observations are held to be approving the ratio in Kanhaiya Lal case 1959 SCR 1350 : 1959 AIR(SC) 135] that Bench may not have any difficulty in dealing with contentions which may arise therefrom in these matters in relation to the decision in Kanhaiya Lal case 1959 SCR 1350 : 1959 AIR(SC) 135]
3. We, therefore, in the above circumstances, direct that the papers be placed before the learned Chief Justice for constituting a larger Bench to decide the questions which arise in this batch of matters. Having regard to the urgency of the matters we would request the learned Chief Justice to constitute a larger Bench as early as possible, more so because those matter wherein the interpretation and constitutionality of the provisions introduced by the Excise and Customs Laws (Amendment) Act, 1991 arise, also have been tagged along with these cases.