Union of India & Ors Vs Keshari Industries
Date-8th October 2021
Forum -Gauhati High Court

Sub-Whether refund of education and higher secondary education cess made in view of decision of apex court which decision is subsequently declared per incuriam can be said to have been erroneously refunded u/s 11A of the Central Excise Act1944 -Chief Justice Bench of the Court considers the law.

The Chief Justice Bench of Gauhati High Court in the above case was considering multiple(38) Writ appeal of the Revenue against the single bench judgement dated 12.3.2021 which had allowed multiple writ petitions quashing the SCN u/s 11A issued by the Central Excise Department seeking to recover the cess refunded in view judgement of Supreme Court in the case of SRD Nutrients which had held that cess is a part of excise duty and thus is eligible for refund in terms of the industrial policy by virtue of which the writ applicants had set up industries in the state. The revenue contended in view of the subsequent decision of the apex court in Unicorn Industries Vs Union of India, which had held that the view taken in SRD Nutrients was “per incuriam”, the refund which was earlier made was erroneously made and hence the same had to be refunded by the writ petitioners.

However, the writ petitioners contended that the amount of refund which was made earlier cannot be said to have been made erroneously or due to fraud, misrepresentation and notwithstanding the fact that the decision in SRD nutrients was declared “per incuriam” , the decision would still be binding on the parties to the said judgement.

Dr Saraf, the counsel for assessees relied on various decisions of the apex court which had held that No one can dispute that in our judicial system it is open to a court of superior jurisdiction or strength before which a decision of a Bench of lower strength is cited as an authority, to overrule it. This overruling would not operate to upset the binding nature of the decision on the parties to an earlier lis in that lis, for whom the principle of res judicata would continue to operate………”.

It was thus contended that the refund when was made earlier cannot be said to have been made erroneously u/s 11A of the Act.

The court agreed with the submissions in Para 34 by agreeing with the submissions of the learned counsels for the assessees/petitioners that, the amount refunded to them cannot be recovered, as it was not refunded to them erroneously, but it was returned to them for the reason that it was the requirement of law; law as it stood at the relevant time. The matter having attained finality cannot be re-opened for the reason that the earlier law has been declared to be “per incuriam”

This judgement reiterates an important point of law that even if a decision is rendered “per incuriam” , the same would still be binding upon the parties to the judgement and would not loose its predentiary value for them

Ramesh Patodia
09-10-2021