D.N. Sinha, J.
1. The facts in this case are shortly as follows : The petitioners in this case carried on business in co-partnership under the name and style of 'Keshrichand Nihalchand'. The firm inter alia arried on business in importing betelnuts from theeastern countries. On 19-3-1957 an import licence was granted to the petitioners' firm for importing betelnuts worth Rs. 24,863/- from a soft currency area. The period of the said licence was January-June, 1957. On the strength of the licence, the said firm entered into an agreement with T. N. Sharma Ltd., of Penang, for supply of 80 bags of betelnuts. Pursuant to the said agreement, the said T. N. Sharma Ltd., sent 80 bags of betelnuts weighing 134.40, piculs, of the total value of Rs. 10,322.52 np. and the same were shipped by the steamer S.S. Noreverett. On or about 9-5-1957 the petitioners' firm received a copy of the invoice from the snipper and on 11-5-1957 they received a certificate of origin. The said steamer was expected to arrive in Calcutta Port on or about 23-5-1957. In order to avoid delay or demurrage charges, the petitioners' firm through their clearing agents caused to be prepared the Bill of Entry in respect of the said goods. They also obtained the shipping documents from the Bank against the payment of the full value thereof. On 4-6-1957 the said firm through their clearing agents paid customs duties on the said 80 bags of betelnuts In full, amounting to Rs. 18,296.25 no. On 5-6-1957, it is stated that when the petitioners' firm went to clear the said 80 bags of betelnuts, the Commissioners for the Port of Calcutta delivered only 26 bags, and the balance of 54 bags were shown as 'not found in the shed'. Between the 6th and 11th June, 1957 a search was made for the remaining goods, but they could not be found. On 80-7-1957 the Commissioners for the Port of Calcutta issued to the petitioners* firm a short-landing certificate in form 'B' a copy whereof has been annexed to the petition and marked with the letter 'B'. This short-landing certificate shows that out of 80 bags the quantity landed was 26 bags, that is to say, 54 bags were not landed at all. Thereafter, the petitioners' firm made a claim for refund of duty which was over-paid. On or about 7-1-1958 the petitioners' firm received a refund-order dated 6-1-1958 from the Assistant Collector of Customs, Manifest Clearance Department for the sum of Rs. 12,855/-. On or about 13-1-1958 the petitioners' firm received payment of Rs. 12.855/-. On 15-9-1958 the petitioners' firm received a notice from the Additional Collector of Customs, a copy whereof is annexure 'C' to the petition. In that notice it was stated that the petitioners' firm had obtained a refund of Rs. 12,855/- in respect of the short-landing of 54 bags out of 80 bags alleged to be short-landed from S.S. Noreverett, but upon a subsequent seratiny of the case it was found that the relevant Bill of Entry was presented to the Custom House on 23-5-57, while the goods were submerged in the Hooghly on 27-5-57. This has been further explained in an affidavit in opposition filed by Section Venkatesan. It is stated there that the relevant Bill of Entry was presented to the Custom-House on 23-5-1957. The goods appeared to have been submerged in the Hooghly while being carried in a boat on 27-5-57. It is stated that the liability for the payment of duty arises on the importation of goods, and as soon as the relative bill-of-entry is filed. When goods are lost after such entry has been made for home consumption, such loss must be accepted as an ordinary trade risk, for which Government is not responsible. It was, therefore, stated that no refund was payable and that the petitioners wrongly applied for refund and that the order passed by the Assistant Collector of Customs, Manifest Clearance Department for a refund amounting to Rs. 12,855/- on 6-1-1958 was without jurisdiction. The notice stated that in view of the foregoing facts it was proposed to re-open the case under Section 190A of the Sea Customs Act, and to recover amounts erroneously refunded. The petitioners' firm was asked to submit its representation, if any, against the said proposal. Later on a hearing was granted. Thereafter this rule was issued on 21-12-1958 and an interim injunction was granted. The point that arises in this case for determination is a point of law which is as follows : The question of recovery, where an ft mount of duty is stated to have been erroneously refunded, is dealt with in Section 39 of the Sea-Customs Act (hereinafter referred to as the 'Act'). The relevant-part of Section 39 runs as follows :
'39. Payment of duties not levied, short-levied or erroneously refunded--
(1) When custom-duties on charges have been short-levied through inadvertence, error, collusion or misconstruction on the part of the officers of customs, or through misstatement as to real value, quantity or description on the part of the owner, or when any such duty or charge, after having been levied, has been, owing to any such cause, erroneously refunded, the person chargeable with the duty or charge so short-levied or to whom such refund has erroneously been made, shall pay the deficiency or repay the amount paid to him in excess, on a notice of demand being issued to him within three months from the relevant date as defined In Sub-section (2); and the Customs-Collector may refuse to pass any good'; belonging to such person until the said duties or charges or the said deficiency or excess be paid or repaid.
(2) For the purpose of Sub-section (1), the expression 'relevant date' means :
(d) In a case where the duty or charge has been erroneously refunded the date of refund
2. It will appear from this section of the Act that it makes any duty erroneously refunded as repayable. It will be remembered that Section 39 is within Chapter V, which contains the charging sections. It is however prescribed that the amounts erroneously refunded will become repayable upon a notice of demand being issued. It also lays down the period of limitation within which this notice of demand can be issued, namely, three months from the relevant date. In the present case, the relevant date is the day on which the duty has been erroneously refunded. As I have stated above, the date of refund in the present case was 13-1-1958. The attempt to re-open the matter was in September, 1958 which is far beyond the three months' period laid down in Section 39. The attempt to re-open the case has been made under Section 190A of the said Act. The relevant provision of Section 190A is as follows .
'190A. Powers of revision of Chief Customs' authority and Chief Customs-officer,
(1) The Chief Customs-authority may of its own motion or otherwise call for and examine the record of any proceeding in which an officer of Customs has passed any decision or order under this Act for the purpose of satisfying itself as to the legality or propriety of any such decision or order and may pass such order thereon as it thinks fit :
Provided that no order prejudicial to any person shall be passed under this section unless such person has been given a reasonable opportunity of making a representation against the proposed order.
(2) The powers conferred upon the Chief Customs-authority under Sub-section (1) may also, in the like manner and subject to the like conditions, be exercised by the Chief Customs-officer in respect of any decision or order passed under this Act by any officer of Customs subordinate to him.
(3) No decision or order by an officer of Customs shall be revised under this section by the Chief Customs-authority or a Chief Customs-officer, as the case may be after the expiry of two years from the date of the decision or order.'
3. The position is therefore shortly as follows : In this case, a certain refund has been made of duty sometime in January, 1958. Under Section 39, it would become repayable if notice of demand was served within three months from the date of refund, that is to say, from 13-1-1958. No such notice was ever served. Nevertheless, the Customs authorities are proceeding under Section 190A of the said Act, and the argument is that for the purpose of Section 190A, there is no question of serving any demand notice and the bar of limitation imposed by Section 39 does not apply to revisional powers conferred by Section 190A of the Act, for which the period of limitation is two years. Mr. Mukherjee appearing on behalf of the respondents argues that Section 39 merely provides for a summary remedy and the only effect of non-payment under Section 39, in spite of the demand notice, would be that the Customs Collector may refuse to pass any goods belonging to such person until the excess was repaid. He argues that this section cannot control the provisions of Section 190A., which applies only to the revisional authority. He has however been constrained to admit that apart from Section 39 there is no provision in the Act for the repayment of excess duty repaid. He says, however, that under Section 190A the Collector of Customs may set aside the erroneous order of the Assistant Collector of Customs ordering the refund, and then the amount will be recovered by way of a suit.
4. In my opinion, this argument cannot be accepted. As I have pointed out above, Section 39 is in Chapter V of the Act which deals with the 'levy and exemption from customs duty' that is to say, the charging sections. If there was no special provision relating to the repayment of duty paid but erroneously refunded, that would be another matter. The Act, however, in the Chapter dealing with the charging sections, specifically deals with the subject of duty paid but erroneously refunded. It lays down certain conditions under which such amounts-should become repayable. In doing so, it has laid down a condition precedent, namely service of notice, and a bar or limitation for serving it. One : might consider by way of analogy, the provisions of Section 29 of the Indian Income Tax Act, under which a notice of demand has to be served upon the assessee. It has been laid down that Income-tax becomes 'due' as soon as income accrues, but it becomes 'payable' when there is a notice of demand served upon the assessee under Section 29 of the Act. No proceedings for recovery of Income-tax can be taken without the serving of such a notice. So fan as limitation is concerned, one might take the analogy of Sub-section (7) of Section 46 of the Indian Income Tax Act, which lays down that no proceeding for the recovery of any sum payable under the said Act shall be commenced after the expiration of one year from the last day of the financial year in which any demand is made under the said Act, unless it falls within one or more of the provisos to that Sub-section. The Indian Income Tax Act also has a provision namely 33A for revision. But it has never been held that the provision of Section 33A overrides the limitation imposed by Section 46 (7). Mr. Mukherjee argues that so far as Section 46(7) of the Indian Income Tax Act is concerned, there is a specific provision-that upon the bar of limitation taking place no further proceedings shall be taken, whereas under the Sea Customs Act, Section 190A there is no such provision. In my opinion, this argument is not of substance. So far as Section 190A is concerned, it is a procedural section, and gives power of revision to the Chief Customs-authority. But I am unable to see how it is independent of, or is not affected by, the bar of limitation which has been imposed under Section 39. The Chief Customs-authority, under Section 190A, can set aside the decision of an officer of customs subordinate to him, if he finds it not according to law or improper. In this case, we are not concerned with the latter, which must refer only to a purely administrative order. It follows, therefore, that he can set aside an order of a subordinate officer if It is illegal. That can only mean, where it is not in accordance with law. When, however, he is considering as to whether a particular order is in accordance with law or not, it is not open to him to consider only one part of the law. In this case, the Chief Customs-authority may consider that the liability to refund was erroneously determined, but he must also consider that where a refund has been made, for the purpose of repayment, it is necessary under the Act, to issue a notice within three months, from the date of the refund. If that date has expired, then the liability to repay cannot be enforced under Section 39, and therefore, it seems to be utterly useless to decide the question as to whether the order of refund was right or wrong Therefore, the short point for consideration is as to whether, in Spite of the fact that no notice of demand has been given under Section 39 the amount refunded in excess could be recovered by way of a suit. That a suit may lie for enforcing the liability to refund can be appreciated, but what I do not understand is as to how such a suit will lie in the absence of a notice of demand as prescribed under Section 39. Just as Income-tax cannot be realised without a notice of demand under Section 29 of the I. T. Act, so an amount erroneously refunded cannot be recovered under the Sea Customs Act unless there is a notice of demand served in terms of Section 39. The period of limitation that has been imposed under Section 39 must have been imposed with an object. It is clear that it was Imposed in order to avoid persons being harassed with actions for refund, after the expiry of a long time from the date of refund. Business men might be put to great difficulty if large sums of money are refunded and are suddenly claimed back after a long period of time. It is with this view that a bar or limitation has been placed regarding the realisation of a refund which is alleged to have been erroneously made. Reference may be made to Section 40 of the Sea Customs Act. That section lays down that no customs duties or charges which have been paid, and of which repayment, wholly or in part, is claimed in consequence of the same having been paid through inadvertence, error or misconstruction, shall he returned, unless such claim is made within three months from the date of such payment. Thus, it will be seen that the law works Doth ways. While it makes an action for refund from a person to whom monies have been erroneously refunded impossible beyond three months from the date of refund, it also makes repayment of excess-duty paid impossible, unless a claim is made within three months from the, date of payment. Here again, the object for imposing the bar of limitation is the same, namely the complicated position that would arise if monies are paid as duty and then a refund is asked for after the lapse of a long period when monies might have gone to other accounts and expended. It would be highly unjust to keep a bar of limitation with regard to refund of charges erroneously paid, and at the same time get rid of the bar of limitation in respect of realisation of refunds erroneously made. I am unable to accept the argument that this is the scheme of the Act.
5. In my opinion, the bar of limitation under Section 39 must be applied to the facts of this case, and the Additional Collector of Customs did not act in accordance with law in an attempt to reopen the matter under Section 190A of the Sea Customs Act. The result is that this rule is made absolute and the notice or letter issued by the Additional Collector of Customs dated 15-9-1958 included in annexure 'C' should be quashed and/or set aside by a writ in the nature of certiorari and there will be a writ in the nature of mandamus directing the respondents not to give effect to the same. All proceedings based on the said notice or letter are also quashed. There will be no order as to costs.