Dual payment was allowable to be refunded as State not expected to get unduly enriched by inadvertent payments of money

Seahorse Ship Agencies Vs Union of India (High Court of Kerala)

Dual payment was allowable to be refunded as State not expected to get unduly enriched by inadvertent payments of money

Conclusion: If assessee calculated Light Dues in respect of the Vessel correctly and remitted the correct amount, then Section 19 of the Act, 1927 could not be resorted to withhold an erroneous double payment or dual payment made by a citizen due to a system error or failure.  The State was not expected to get itself unduly enriched by erroneous or forced or inadvertent payments of money made by its citizens and  was not expected to bring in defence of limitation in respect of such payments resulting in unjust enrichment.

Held:  Assessee was agent of the vessel and the vessel was expected to arrive in the evening. In the morning, assessee remitted Light Dues through the web portal of the Director General of Lighthouses and Lightships (DGLL). However, the receipt was not generated by the web portal.  Assessee was under the impression that the online payment had not gone through. Assessee therefore made a manual payment before the Cochin Customs, for which receipt was issued. On the following day, assessee -company received receipt for the payment made online. He accordingly and unintentionally made dual payment. When the Auditors of assessee noted the dual payment, assessee filed an application for refund before the Assistant Commissioner of Customs (Refunds). The authority rejected assessee’s application for refund on the ground that the claim was made beyond the period of limitation. It was held that assessee was forced to make such dual payment due to the failure of the web portal system to generate a receipt, when assessee made the first payment through the web portal. This Court was of the view that Section 19 was not intended to operate in such circumstances. If Section 19 did not apply to the dual payment made by assessee, then there was no question of a period of limitation under the Customs Act for making an application for refund of the dual payment. The State and its authorities were not expected to act in a Shylochian manner and squeeze money from its citizens. Levy of any tax/dues should have the authority of law. If assessee calculated Light Dues in respect of the Vessel correctly and remitted the correct amount, then Section 19 of the Act, 1927 could not be resorted to withhold an erroneous double payment or dual payment made by a citizen due to a system error or failure. The State was not expected to get itself unduly enriched by erroneous or forced or inadvertent payments of money made by its citizens. The State was not expected to bring in defence of limitation in respect of such payments resulting in unjust enrichment. The claim of assessee for refund was allowable.

FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT

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