# 983. GEEP FLASHLIGHT INDUSTRIES LTD v. UNION OF INDIA AND ORS

- **Citation:** [1977] 1 S.C.R. 983
- **Court:** Supreme Court of India
- **Decided:** 1976-10-28
- **Case number:** Civil Appeal No. 1830 of 1975
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/983-geep-flashlight-industries-ltd-v-union-of-india-and-ors-6991
- **Pages:** 5

## Headnote

f
983.
GEEP FLASHLIGHT INDUSTRIES LTD.
v.
UNION OF INDIA AND ORS.
October 28, 1976
[A. N. RAY, c. J., M. H. BEG AND P. N. SHINGHAL,. H.]'
Limi1a1io11-Period of /imitation in respect o/ suo motu revision by Cemral
Governme11t to a111111/ or modify any order of erroneous refund of duty, when
begi11s-C11s:e111s Act, 1962 Ss. 28, 131(1)(3)(5) scope of.
•
The appellant succeeded before the revisional authority and obtained· the
orders of refund of duty levied and collected on the consignment of ten metric
tonnes Q._f llfanganese dioxide.
As no action was taken, the appellant gave a
B
notice cl'! October 3, 1974 u/s 80 C.P.C. for institutio111 of a suit for recovery of
C'
refund.
On February 10, 1975 the respondent gave a notice u/s 131(3) of the
Customs Act 1962 to (he appellant for suo motu revision of the order of the
refund.
The Writ Petition filed in the Delhi Hig~ Court, impeaching the said
order w~s dismissed directing the appellant to raise all objections including those
raised in the Writ Petition before the Central Government.
Dismissing the appeal by special leave, the Court
Held : t 1) S. 28 of the Customs Act, 1962 speaks of three kinds of errors in
I>
regard to duties.
One is non-levy, the second is short levy, and the third' is
.
erroneous refund.
Levy i~ linked to assessment. In the process of assessment
two kinds of errors may occur.
One is non levy and the other is short levy.
The expres,ion "erroneously refunded" means refunded by means of an order
which is erroneously made. [986 F-G]
(2) S. 131 (5) of the Customs Ac~ does not speak of any limitatiOJl' iir
regard to revision b}" the Central Government of its own motion t<J. annul or
modify any order of erroneous, refund of duty.
The provisions contained
in
K
Section 131(5) with regard to non .. Jevy or short levy cannot be equated
with
erroneous refund in as much as the three categories of errors in the levy are
dealt with in s. 28. [987 D-E]
(3) Notice u/s 28 of the Customs Act speaks of demand for money to pay
back and the notice is required to be given within six months frorn the relevant
date. In 1he case of erroneous refund,
it would be six months from the date
of actual refund. Jf nol refund has in fact been made limitation cannot be said
to arise inasmuch as the' relevant date u/s 28: in the case of erroneous refund
F
speaks of the date of refund. In the instant case the impugned order dated 20,
April 1972 grnnted refund.
Grant of refund is not actual refund. [986 G-H.
987 Al

## Text

f
983.
GEEP FLASHLIGHT INDUSTRIES LTD.
v.
UNION OF INDIA AND ORS.
October 28, 1976
[A. N. RAY, c. J., M. H. BEG AND P. N. SHINGHAL,. H.]'
Limi1a1io11-Period of /imitation in respect o/ suo motu revision by Cemral
Governme11t to a111111/ or modify any order of erroneous refund of duty, when
begi11s-C11s:e111s Act, 1962 Ss. 28, 131(1)(3)(5) scope of.
•
The appellant succeeded before the revisional authority and obtained· the
orders of refund of duty levied and collected on the consignment of ten metric
tonnes Q._f llfanganese dioxide.
As no action was taken, the appellant gave a
B
notice cl'! October 3, 1974 u/s 80 C.P.C. for institutio111 of a suit for recovery of
C'
refund.
On February 10, 1975 the respondent gave a notice u/s 131(3) of the
Customs Act 1962 to (he appellant for suo motu revision of the order of the
refund.
The Writ Petition filed in the Delhi Hig~ Court, impeaching the said
order w~s dismissed directing the appellant to raise all objections including those
raised in the Writ Petition before the Central Government.
Dismissing the appeal by special leave, the Court
Held : t 1) S. 28 of the Customs Act, 1962 speaks of three kinds of errors in
I>
regard to duties.
One is non-levy, the second is short levy, and the third' is
.
erroneous refund.
Levy i~ linked to assessment. In the process of assessment
two kinds of errors may occur.
One is non levy and the other is short levy.
The expres,ion "erroneously refunded" means refunded by means of an order
which is erroneously made. [986 F-G]
(2) S. 131 (5) of the Customs Ac~ does not speak of any limitatiOJl' iir
regard to revision b}" the Central Government of its own motion t<J. annul or
modify any order of erroneous, refund of duty.
The provisions contained
in
K
Section 131(5) with regard to non .. Jevy or short levy cannot be equated
with
erroneous refund in as much as the three categories of errors in the levy are
dealt with in s. 28. [987 D-E]
(3) Notice u/s 28 of the Customs Act speaks of demand for money to pay
back and the notice is required to be given within six months frorn the relevant
date. In 1he case of erroneous refund,
it would be six months from the date
of actual refund. Jf nol refund has in fact been made limitation cannot be said
to arise inasmuch as the' relevant date u/s 28: in the case of erroneous refund
F
speaks of the date of refund. In the instant case the impugned order dated 20,
April 1972 grnnted refund.
Grant of refund is not actual refund. [986 G-H.
987 Al
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1830 of 1975.
Apveal by S~ecial Leave from the Judgment and Order dated
10-9-75 of the Delhi High Court in Civil Writ Petition No. 475/75.
G
'',
Soli Sornbjee, Ravinder Narain, Talat Ansari and Shri Narain,
for the Appellants.
V. P. Raman, Addi. Sol. Genl. for India, S. K. Mehta and Girish
Chandrn, for the Respondent.
The Judgment of the Court was delivered by
RAY, C. J.-This appeal is by special leave from the judgment
dated 10 September 1975 of the Delhi High Court.
H
984
SUPREME COURT REPORTS
[1977) 1 S.C.R.
A
The app_ellant is a manufacturer of dry battery cells. In October
1969 the appellant received a consignment of ten
metric tons of
manganese dioxide.
The Assistant Collector levied duty on the consignment under Tariff Item 28.
The appellant preferred an appeal.
The Appellate Collector confirmed the order of the As$istant Collector.
The appellant thereafter made an application to the Revisional
Authority.
The Revisional Authority held that the goods should be
\.
iB
assessed under Tariff Item 26 and ordered refund of duty.
The appellant asked for refund and sent reminders to Customs
Authorities for refund.
•
On 3 October 1974 the appellant gave a notice under section 80
of the Civil Procedure Code for institution of a suit for recovery of
:c
refund.
•
D
E
G
H
On 10 February 197 5 a notice under Section 131 ( 3) of the Cusr
/toms Act 1962 referred to as the Act was given to the appellant for
revision of the order of refund.
The appellant impeached the aforesaid notice dated 10 February
1975. The notice inter alia stated that "since the goods were
processed ore, not meant for extraction of metallic manganese they ceased
to qualify as an 'ore' within the normally accepted sense of the term
as in item 26 Indian Customs Tariff. The notice thereafter said "It,
therefore, appears to the Government that the appellate order does
not appear to be sustainable.
Therefore, in exercise of the powers
under section 131(3) of the Customs Act, 1962 the Government of
India proposes to annul the order in Appeal No. 590-593/1972 passed
by the Appellate Collector of Customs, Calcutta".
The appellant made an application under Article 226 and moved
the Delhi High Court. The appellant in the application asked for a
writ in the nature of prohibition restraining the "Opposite
party"
thereto from taking any proceeding pursuant to the impugned notice.
The appellant also asked for a writ of certiorari to quash the notice.
The appellant also asked for a writ of mandamus not to withhold
the exces·s duty paid by the petitioner and ordered to be refunded.
The contention of the appellant was that the power of suo motu
revision under section 131(3) of the Act in so far as it relates to a
case of non-levy or short levy of duty must be exercised within the
period of limitation prescribed in section 131(5) ef the Act. In short',
the ap~ellant'~ contention is that the J?OWer. of suo motu re~i~ion contained m section 131(3) of the Act 1s subiect to the prov1s1ons contained in section 131 ( 5) of the Act.
The provisions contained in section 131 (3) of the
Act are as
follows
"The Central Government may of its own motion annual
or modify any order passed under section 128 or section
130."
f
.,
I
I
GEEP FLASHLIGHT INDUSTRIES V. UNION (Ray, C. J.)
985
The provisions contained in section 131 ( 5) of the Act are as
A
follows :-
"Where the Central Government is of opinion that any
duty or customs has not been levied or has been short-levied,
no order levying or enhancing the duty shall be made under
this section, unless the person affected by the proposed order
is given notice to show cause against it
within the timelimit specified in section."
·
Section 28 of the Act provides for notice for payment of duties
11ol levied, short-levied or erroneously refunded.
Under ·section 28
where any duty has not l:!een levied or has been short-levied or erroneously refunded, the proper officer may, within six months from the
relevant date, serve notice on the person chargeable with
the duty
which '1as not been levied or which has been short-levied or to whom
the refund has erroneously been made, requiring him to show cause
why he should not pay the amount 'specified in the notice.
Counsel for the appellant extracted the provisions contained in
sections 28 and 131 (3) and 131 (5) of the Act in support of the contention that any notice for suo motu revision by the Central Government in so far as it relates to a case of non-levy or short levy of duty
must be_ 0iven within the period of six months from the date of levy.
Counsel for the appellant further contended that if the Government
wanted to revi'se orders for refund on the ground that there should
not be any refund, it would also be a case of short-levy, and, therefore, the limitation of six months as provided in section 28 of the Act
should apply.
Broadly stated Counsel for the appellant submitted that section 28
of the Act is a substantive provision relating to notice for non-levy
or short-levy and section 131 (3) of the Act is a procedural section and
power under section 131 ( 3) of the Act cannot be exercised Jn such a
manner as to render section 28 of the Act nugatory.
The alternative contention of Counsel for the appellant is that
power under section 131 ( 3) of the Act is to be exercised within a
reasonable time and the periods mentioned in section 131 of the Act
supply the yard-stick or give an indication of what is reasonable time.
The Delhi High Court held that all the objections which the petitioner wishes to raise to the notice, including the objections raised in
the writ petition, should be raised before the Central Government.
The Delhi High Court, therefore, directed the Government to give a
hearing to the appellant and further held that the Government should
consider all the objections.
The Delhi High Court went on to say
that the decision of the Government should be taken within three
months unless the appellant himself took adjournment and caused
delay in the disposal of the case.
The Delhi High Court also said
that if any money wa·s to be refunded, it should be refunded within
two months from the date of the decision.
The provisions contained in section 28 of the Act speak of nonlevy, short-levy and erroneous refund. The provisions state that notice
B
c
D
E
F
G
H
986
SUPREME COURT REPORTS
(1977] 1 S.C.R.
-A
of :con-levy, short-levy or erroneous refund should be given within
six months from the relevant date.
Section 28(3) states what the
"relevant date" means. In the case of duty not levied, the "relevant
date" is the date on wh~ch the proper officer makes an order for the
clearance of the goods. In a case where duty is provisionally assessed
under section 18 of the Act, the relevant date is the date of adjustment of duty after the final assessment. In a case where duty has
· B
been 'erroneously refunded, the relevant date is the date of refund.
c
D
E
F
G
In any other case, the relevant date is the date of payment of duty.
The Additional Solicitor General 'contended th_at -the provisions
in section 28 of the Act indicated that any notice with regard to nonlevy, short-levy or erroneous refund,, require the person to show cause
v{hy he should not pay the amount 'specified in the notice. This being
the case of erroneous refund, the Additional Solicitor General contended that the limitation would be six months from the date of actual
refund. The order-dated 20 April 1972, which is described as the
order of refund, was as follows :-
"I, therefore, allow the appeals and direct that the goods
be re-assessed under Item 26 of the Indian Customs Tariff
and the consequential refund of duty granted."
It may be stated here that Tariff Item 26 speaks of duty on metallic
ore and Tariff Item 28 speaks of duty on Chemical and Pharrnaceuti-
-cal products.
The appellant succeeded in appeal in
obtaining an
order of refund. It is an admitted feature of the case that refund has
not in fact been made.
Counsel for the appellant contended that even if refund has not
been made, the elate of refund will be the relevant date and 'six months
would be calculated from 20 April 1972, when refund was ordered
and, therefore, the notice dated 10 February 1975 will be hit by the
provision of limitation of six months from the relevant date.
The
contention of the appellant is wrong. It is only where refund has in
fact been made and money has been paid, the relevant date will be siir
months from the date of actual payment for refund.
The contention of the appellant that refund will also be a case
cf ~hort-levy is not correct. Section 28 speaks of three kinds of errors
in regard to dutie·s.
One is non-levy, the second is short-levy and
the third is erroneous refund. Levy is linked to assessment. Section
17 of the AcCspeaks of assessment order. In the process of assess~
ment two kinds of errors may occur. One-is non-levy and the other
is short-levy.
Refund is dealt with in section 27 of the Act.
The
expression "erroneously refunded" means refunded by means of an -
crder which is erroneously made. These are three categories of errors
in regard to_ duties.
-
'
l. .
The notice- under section 28 of the Act speaks of demand for
money to pay back and the notice is required to be given within six
H . months from the relevant date~ In the case of erroneous refund, it
•
would be six months from the date of actual -refund. If no refund
has in fact been made, limitation cannot be said to arise-inasmuch as
the relevant date under section 28 in the case of erroneous refund
•
~
I
GEEP FLASHLIGHT INDUSTRIES V. UNION (Ray, C. J.)
9 87
speaks of the date of refund.
The order dated 20 April 1972 granted
A
refund. Grant of refunQ is not actual refund .
. Chapter XV contains sections 128 to 131 of the Act.
Chapter
XV speaks of Appeals and Revision.
Section 128 relates to appears,
Section 130 deals with powers of revision of Board.
Section
131
speaks of revision by Central Government. Revision can be asked
for by the persons aggrieved by any order passed under section ~28,
or any order passed under section 130.
Section 131(2) provides
limitation of six months for an application made under section 131 ( 1)
of the Act.
•
Once the provisions contained in section 131 ( 3) are attracted, the
Central Government. may of its own motion annul or modify
any
order pa~ed under section 128 or section 130.
This provision is
the power of Central Government to annul or modify any order. This
power is exercised by the Central Government suo motu. Of course
the power is to be exercised on giving notice to the person concerned.
The provisions contained in section 131 (5) of the Act speak of
limitation only with regard to non-levy or short-levy.
It is significant
that section 131 (5) does not speak of any limitation in regard to revision by the Central Government of its own motion to annul or modify
any order of erroneous refund of duty.
The provisions contained in
section 131 (5) with regard to non-levy or short-levy cannot
be
equated with erroneous refund inasmuch as the three categories
of
errors in the levy are dealt with separately.
B
c
D
The appellants prayers for writs of Certiorari and mandamus · are
misconceived.
There is no order either judicial or
quasi-Judicial
E
which can attract certiorari. No mandamus can go
because there
is nothing which is required to be done or for borne under the Act.
The issue of the notice in the present case requires the parties to represent their case.
There is no scope for mandamus to do any duty
or act under the statute.
A writ of prohibition cannot be issued for
the obvious reason that the Central Government has jurisdiction
to
revise.
1
F
For the foregoing reasons, the appeal is dismissed.
The Central
Government will hear the appeal on merits.
In view of our conclusion that there is no bar of limitation in the present case it will not be
open to the parties to take any plea of limitation.
The Central Government will hear ihe matter as expeditiously as pos&,ible.
In case
the Central Government will hold that the order of refund is valid, the
G
Central Government will pay the amount.
We specify the period
of two months from the date of the order as the period during which
payment will be made.
The parties will pay and bear their
own
costs.
s. R.
Appeal dismissed.
H
13 -l 338SCI/76