GHULAM ABBAS Versus MEMBER (JUDICIAL), CENTRAL BOARD OF REVENUE

1. SALEEM AKHTAR, 1 ‑In 'the year the petitioner imported 300 bags of betel‑nuts from Singapore. On arrival of the goods as the petitioner did not have sufficient money to pay the duty he deposited the betel‑nuts in customs bonded warehouse. The petitioner was, however, able to get the goods cleared on payment of duty and sales tax charged by the respondents. It has been alleged that the sales tax @ 20% was being charged from every importer, but in the year 1980 the petitioner came to know that the Government had imposed sales tax on import of betel‑nuts and exemption granted earlier has been withdrawn. He, therefore, made a claim for refund by letter dated 1‑9‑1980. The respondent No. 3 refused refund and rejected the same on the ground that such claim for refund should have been made within six months from the date of payment as provided by section 33 of the Customs Act. The petitioner filed an appeal before respondent No. 2 but it was also dismissed on the same ground. The respondents have filed counter‑affidavit in which it has been pleaded that the sales tax @ 20% on import of betel‑nuts was charged from the petitioner due to an inadvertent error on their part. The claim for refund should have been made within six months, but the petitioner's claim was lodged after the expiry of six months.

2. Mr. Sohail Muzaffar the learned counsel for the petitioner has contended that as sales tax was not chargeable and the same has been recovered, the respondents are bound to refund it. The admitted position is that sales tax was not chargeable on import of betel‑nuts at the relevant time; therefore, the respondents did not have any authority or jurisdiction to impose and collect sales tax from the petitioner. The recovery of sales tax from the petitioner was,, therefore, without lawful authority and of no legal effect. '

3. The question arises whether the petitioner is entitled to its refund. The respondents have taken the plea of limitation as the claim for refund was not made within the stipulated period as provided by section 33 of the Customs Act which reads a follows:‑

4. "33. Refund to be claimed within six months : ‑(1) No refund of any customs‑duty or charges claimed to have been paid or overpaid through inadvertence, error or misconstructions shall be allowed, unless such .claim is made within six months of the date of payment.

(2) In the case of provisional payments made under section 31, the said period of six months shall be reckoned from the date of the adjustment of duty after its final assessment."

5. This section provides for refund of customs duty or charges, which are A paid or overpaid due to inadvertence, error or misconstruction. The customs duty and charges referred to section 33 should‑ be chargeable and payable by the importer or exporter, and where such duties and charges are charged due to inadvertence, error or misconstruction, the claim for refund should be made within six months, but where the amount recovered by the customs authorities A is not customs duty or charge, as its imposition and lever has not been sanctioned under law, the claim for refund of such amount would not be governed by section 33. Petitioner's claim is in respect of the entire amount which was neither a customs duty, nor sales tax, but the Customs Authorities recovered it in the name of sales tax without any sanction or authority. Where such a recovery has been made without any lawful authority and without jurisdiction, the authority recovering it must refund it because such recovery is not backed by any legal sanction. How could any person be allowed to retain and appropriate the amount illegally realised under the garb of a legal authority which never existed?

6. We, therefore, declare that the impugned order passed by the respondents is without lawful authority and direct them to refund Rs.24,521 to the petitioner.

7. H.B.T/G‑365/K Petition allowed.