State of Madhya Pradesh vs Bhailal Bhai and Ors

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Not extracted

Decision Date: 20 January 1964

Coram: K.C. Das Gupta, P.B. Gajendragadkar, K.N. Wanchoo, J.C. Shah, N. Rajagopala Ayyangar

In this matter, the State of Madhya Pradesh filed a petition against Bhailal Bhai and others, and the case was decided on 20 January 1964 by a five‑Judge Bench of the Supreme Court consisting of K.C. Das Gupta, P.B. Gajendragadkar, K.N. Wanchoo, J.C. Shah, N. Rajagopala Ayyangar. The judgment is reported in 1964 AIR 1006, 1964 SCR (6) 261, and it has subsequently been cited in numerous decisions, including RF 1965 SC1740 (11), R 1966 SC1089 (34), R 1969 SC 78 (4), E 1970 SC 898 (18, 35, 37, 46, 51, 62, 63), D 1972 SC2060 (4,5), E 1975 SC 813 (5,6), RF 1976 SC2243 (21), R 1982 SC 101 (28), E&R 1990 SC 772 (20,31,32), RF 1990 SC 820 (17), RF 1991 SC1676 (72). The principal issues raised concerned the jurisdiction of the High Court under Article 226 of the Constitution, the meaning of unreasonable delay in approaching the court, the validity of a sales tax that the State had imposed on imported tobacco, the alleged obstruction of inter‑state trade, the effect of tax paid under a mistake of law, the availability of an order for repayment, and the applicability of the saving provisions of Article 304.

The respondents were dealers in tobacco operating in the former State of Madhya Bharat. The State had levied a sales tax on the sale of tobacco that the respondents imported, while no comparable tax was imposed on the sale of tobacco that was produced within the State. The respondents consequently filed writ petitions under Article 226 requesting a mandamus directing the State to refund the tax they had paid. Their contentions were that the tax infringed Article 301(a) of the Constitution because it impeded trade and commerce between Madhya Bharat and other parts of India, that the tax was collected on a mistake of law and therefore, under Section 72 of the Indian Contract Act, 1872, the amount should be recoverable, and that the High Court possessed the authority to order such a refund. The State, on the other hand, argued that the tax did not violate Article 301, and even if it did, the tax fell within the saving clause of Article 304(a), which precludes the High Court from directing a refund of tax lawfully imposed. The State further submitted that the respondents had delayed unreasonably in filing their petitions, and consequently, the High Court should not exercise its discretionary power to issue a mandamus. The High Court rejected all of the State’s arguments, held that the tax contravened Article 301(a), and granted the writ of mandamus as prayed for. The State appealed to the Supreme Court, presenting essentially the same arguments that had been raised before the High Court. The Supreme Court held that although the liability to pay the tax arose from the sale of tobacco within Madhya Pradesh and not from the act of importation, the factual circumstances demonstrated that the tax directly impeded inter‑state trade, thereby violating Article 301(a). The Court referred to earlier decisions such as Atiabarj Tea Co. Ltd. v. State of Assam [1961] 1 SCR 809, Automobiles Transport (Rajasthan) Ltd. v. State of Rajasthan [1963] 1 SCR 491, and Firm Mehtab Majid & Co. v. State of Madras, AIR 1963 SC 928, in support of this finding.

In this case the Court observed several points. First, it noted that even though the tax infringed article 301 of the Constitution, the tax could be considered valid only if it fell within the saving provisions of article 304 of the Constitution. Second, the Court held that tobacco that was manufactured or produced in the appellant State, and which was treated in the same manner as tobacco imported from outside, had not been subjected to the tax; consequently the tax could not be said to fall within the saving provisions of article 304(a) of the Constitution. Third, the Court remarked that the tax which had already been paid was paid under a mistake within section 72 of the Indian Contract Act. Fourth, the Court reiterated that the High Courts possess the power to enforce fundamental rights and statutory rights by granting consequential relief, including ordering the repayment of money obtained by the Government without lawful authority, and it referred to the authorities Firm Mehtab Majid & Co. v. State of Madras, A.I.R. 1963 S.C. 928 and Sales Tax Officer, Banaras v. Kanhaiya Ld Saraf, [1963] S.C.R. 1360. Fifth, the Court stated that as a general rule, when there is unreasonable delay the court should ordinarily refuse to assist a party by using the extraordinary remedy of mandamus; even in the absence of such delay, if the opposite party raises a prima facie issue concerning the availability of relief on the merits, for example a limitation defence, the court should ordinarily decline to issue a writ of mandamus. Sixth, the Court explained that although the provisions of the Limitation Act do not directly apply to relief under article 226, the maximum period fixed by the legislature for instituting a civil suit can be taken as a reasonable standard for measuring delay in seeking relief under article 226. The Court further noted that a delay may be deemed unreasonable even if it is shorter than the statutory limitation period for a civil action, while a delay exceeding that period would almost always be considered unreasonable. The Court also pointed out that the limitation period for recovery of money paid by mistake under the Limitation Act is three years from the date when the mistake is discovered. Finally, the Court concluded that civil appeals numbered 861 to 867 were allowed in part, and the remaining appeals were dismissed. The judgment related to civil appellate jurisdiction involving civil appeals numbered 362 to 377 of 1962, appeals from judgments dated 16 December 1959 of the Madhya Pradesh High Court in miscellaneous petitions numbered 144 to 158 and 160 of 1958, civil appeals numbered 858 to 867 of 1962 arising from judgments dated 28 October 1960, 16 September 1960 and 29 July 1960 of the Madhya Pradesh High Court in miscellaneous petitions numbered 110, 119 and 136 of 1960, 198, 199, 202 to 206 of 1959, and civil appeals numbered 25 to 29 of 1963 arising from judgments dated 29 July 1960, 26 September 1960, 28 October 1960, 16 September 1960 and 28 October 1960 of the Madhya Pradesh High Court.

The petitioners before the Madhya Pradesh High Court were listed in Miscellaneous Petition Nos. 273 of 1958 and Nos. 73, 74, 120 and 132 of 1960. The Advocate‑General of Madhya Pradesh, M. Adhikari, together with N. Shroff, appeared for the appellants in every one of the appeals. For the respondent, counsel comprised M. C. Setalvad, S. N. Andley, Rameshwar Nath and P. L. Vohra in Civil Appeal No. 362 of 1962, while S. N. Andley, Rameshwar Nath and P. L. Vohra represented the respondents in Civil Appeals Nos. 363 to 377, 858 to 867 of 1962 and Nos. 25 to 27 of 1963. The judgment was delivered on 20 January 1964 by Justice Das Gupta. In this decision the Court addressed thirty‑one appeals filed by the State of Madhya Pradesh; each appeal challenged an order of the Madhya Pradesh High Court that had been issued in response to an application under Article 226 of the Constitution filed by dealers engaged in the tobacco trade. All of the petitioners had conducted their business in Madhya Bharat, a territory that subsequently became part of the State of Madhya Pradesh, and each had been assessed a sales tax on their tobacco sales pursuant to a notification issued by the State Government exercising authority under section 5 of the State Sales Tax Act. Substantial sums of tax were collected first by the Madhya Bharat Government and later by the Madhya Pradesh Government. The petitioners argued that the statutory provisions relied upon for the assessment and collection of the tax were unconstitutional because they infringed Article 301 of the Constitution and did not fall within the special exception provided by Article 304(a). Accordingly, they sought appropriate writs or orders directing the refund of all taxes that had been collected from them. The State of Madhya Pradesh, in defending the assessments, contended firstly that the impugned provisions did not contravene Article 301 and, in any event, satisfied the conditions of Article 304(a). The State further submitted that even assuming the provisions were unconstitutional and the assessments were made without legal authority, the petitioners would not be entitled to a refund. The High Court, after examining the notification that formed the basis of the tax, concluded that the tax applied only to imported tobacco and not to tobacco cultivated domestically; therefore the tax did not fall within the special category of Article 304(a). The Court held that the resulting infringement of Article 301, arising from a tax on imported goods, rendered the provisions void. Consequently, the High Court granted the refund relief in those applications that gave rise to Civil Appeals Nos. 362‑377, 861‑867 of 1962 and Civil Appeal No. 25 of 1963, while rejecting the refund claim in the remaining petitions. In the present appeals the State of Madhya Pradesh challenges both the High Court’s determination that the taxing provision was unconstitutional and void, and the refund orders granted in the selected petitions. The statutory liability for the tax in question was founded upon section 3 of the Madhya Bharat Sales Tax Act.

The Madhya Bharat Sales Tax Act became operative on the first day of May 1950. At the time of its enactment the statute prescribed that every dealer who imported goods into Madhya Bharat would be liable to pay tax on his taxable turnover arising from sales or supplies of goods made from that date, provided that his total turnover in the preceding year from sales or supplies of goods exceeded five thousand rupees. In the same manner, every manufacturer whose turnover in the previous year exceeded five thousand rupees was made liable to pay tax on his taxable turnover arising from sales or supplies of goods effected from the same date. A different class of dealers, described as “every other dealer,” was required to pay tax on his taxable turnover from sales or supplies of goods made after the first of May 1950 only if his total turnover in the preceding year exceeded twelve thousand rupees. Subsequent amendments removed the word “processor” from clause (b) and clarified the expression “any other” in clause (c) by substituting the words “any goods of a dealer not falling in clause (a) or clause (b).” An amendment also made it explicit in 1950 that the taxable turnover on which the tax liability arose must relate to sales or supplies of goods effected within Madhya Bharat.

Section 5 of the Act provides that the tax payable by a dealer shall be determined at a single point and shall not be less than one and one‑ninth percent nor more than six and one‑quarter percent of the taxable turnover, as may be notified from time to time by the Government through publication in the Official Gazette. The provision includes a proviso that, for a special class of goods, the Government may levy tax at a rate up to twelve and one‑half percent of the taxable turnover. The second subsection of section 5 authorises the Government, at the time of notifying the tax payable by a dealer, to specify the particular goods and the point of sale at which the tax is payable. Consequently, the legal position is that tax cannot be imposed unless a valid notification under section 5 exists. The petitioners‑dealers, whose claim succeeded before the High Court, contended that the notifications on which their tax assessments were based were invalid. The first such notification was issued on 30 April 1950 and stated that, effective from 1 May 1950, sales tax would be collected on the goods listed in column 2 of the attached Schedule, at the point of sale indicated in column 3, and at the rates shown in column 4. The relevant portion of that Schedule identified the commodity “tobacco leaves, manufactured tobacco (for eating and smoking) and tobacco used for Bidi manufacturing” as being taxable when sold by the importer, at a rate of six‑and‑four‑tenths percent.

After the earlier notification, the State issued another notification on 22 May 1950 which prescribed a lower rate of tax for tobacco used in the manufacture of Bidi. The amendment did not change the point at which the tax became payable. The relevant part of the schedule attached to that notification read as follows: “10. Tobacco leaves and manufactured tobacco (for eating, smoking and snuffing) – Point of sale: Importer – Rate of tax in Madhya Bharat: 6‑4‑0 per cent; 11. Tobacco used for Bidi – Point of sale: Importer – Rate of tax in Madhya Bharat: 1‑9‑0 per cent.”

For a brief interval, namely from 1 January 1954 to 21 January 1954, the two preceding notifications were rendered inoperative because of a new notification dated 24 October 1953. That October notification provided that, beginning 1 January 1954, the point of sale at which the tax became payable would be altered to “a sale by a dealer directly to a consumer or to a dealer who does not hold a licence or registration certificate under the Sales Tax Act.” This alteration was itself reversed by a further notification dated 21 January 1954, which restored the former situation with effect from 22 January 1954. Consequently, from 22 January 1954 onward, the point at which the tax became payable again reverted to a sale by an importer.

The Court observed that the tax collected at the point of sale by an importer in Madhya Bharat unquestionably impeded the freedom of trade and commerce guaranteed by Article 301 of the Constitution. While it was true that mere importation of goods did not, by itself, create a tax liability, the Court noted that if imported goods were not sold within Madhya Bharat, no tax would arise. However, the great majority of tobacco leaves, manufactured tobacco intended for eating and smoking, and tobacco used for Bidi manufacturing that entered the State were in fact sold inside Madhya Bharat. The volume of such sales was evident from the assessment orders issued in the several cases before the Court.

Therefore, the Court concluded that, although the liability to tax arose upon the sale of the imported goods in Madhya Bharat rather than at the moment of importation, the tax nevertheless directly obstructed inter‑state trade and commerce between Madhya Bharat and other parts of India. Relying on the precedent set in Atiabari Tea Co., Ltd. v. State of Assam (1), the Court held that the tax contravened the provisions of Article 301 of the Constitution. The Court further noted that the later decision in Automobile Transport (Rajasthan) Ltd. v. State of Rajasthan (2), which slightly modified the majority view in the Atiabari case, did not alter this conclusion. The Court added that if the tax could have been characterized as regulatory or compensatory, it would have benefited from the reasoning in the later case; however, there is, however, no

The Court observed that the argument raised in Firm Mehtab Majid and Co. v. State of Madras could not be used to claim that the tax was regulatory or compensatory. It noted that the tax might still be valid even though it violated Article 301 if it fell within the saving provisions of Article 304(a) of the Constitution. Article 304(a) permits a State legislature to impose, by law, on goods imported from other States a tax that is also levied on similar goods manufactured or produced in the State, provided that the law does not discriminate between imported goods and domestically produced goods. The State had attempted, both before the High Court and before this Court, to interpret the notification in question so that it would apply not only to tobacco imported from other States but also to similar tobacco products manufactured or produced within Madhya Bharat at the same rate. The State argued that a dealer who was an importer and who sold the imported tobacco in Madhya Bharat would simultaneously be selling goods that were not imported but were manufactured or produced in the State. The Court accepted that such a situation could conceivably arise. However, the Court could not accept the proposition that, with respect to sales of those other goods, the importer would also be liable to tax under the notification, as suggested by the cited authorities. The Court was informed that, in practice, when importers dealt with goods other than imported tobacco, the sales of those other goods were actually excluded from the tax. The Advocate‑General of Madhya Pradesh, appearing for the State, contended that this exclusion resulted from a mistaken interpretation by the State Sales Tax Authorities. The Court rejected that contention. In the Court’s opinion, the only reasonable construction of the notification, as it stands, is that the tax on tobacco leaves, manufactured tobacco and tobacco used for bidi manufacturing is payable at the point of sale by the importer only on the sale of goods that the importer has actually imported, and not on the sale of any other goods by that person. The Court explained that if the legislative intention had been, as the Advocate‑General proposed, to make the tax payable at the point of sale by an importer and to extend it to the sale of goods manufactured or produced in Madhya Bharat by the same person, the word “importer” would not have been placed in column 3 of the notification. Instead, the column would have used the term “dealer,” and the point of sale would have been described with language such as “first sale in Madhya Bharat” or “sale to the retailer in Madhya Bharat,” reflecting the choice of the rule‑making authority. The Court further clarified that reading column 3 with the definition of “importer of goods” found in section 2(i) of the Act makes it evident that the point of sale in Madhya Bharat at which the tax becomes payable is the sale made by the dealer who brings goods into Madhya Bharat for processing, manufacturing or sale, or who purchases goods in Madhya Bharat for sale from a dealer who does not normally conduct business in Madhya Bharat. Consequently, there is little room for arguing that the notification was intended to subject the same dealer’s sales of domestically manufactured goods to the tax.

In examining section 2(i) of the Act, the Court observed that the point of sale in Madhya Bharat at which the tax became payable was expressly described as the sale “by the dealer who brings or causes to be brought into Madhya Bharat any goods from outside for the purpose of processing, manufacturing or sale” or the sale “by the dealer who purchases goods in Madhya Bharat for the purpose of sale from a dealer who does not ordinarily carry on business in Madhya Bharat.” The Court noted that when the tax liability arose only at such a sale, there was scarcely any room for a serious contention that the notification was intended to bring within the tax net the sales made by the same dealer of goods that were manufactured or produced inside Madhya Bharat. The Court further indicated that it was appropriate to refer to the distinction made in section 3 of the Madhya Bharat Sales Tax Act between sales made by a dealer who imports goods (clause (a)) and sales made by other dealers (clauses (b) and (c)). In the Court’s view, it was reasonable to think that the Act itself contemplated the phrase “sales by an importer of goods” to refer only to sales of goods that the importer actually brought into Madhya Bharat. Moreover, the Court pointed out that the notification plainly excluded from tax liability those dealers who dealt solely in tobacco that was grown or produced within the State. That exclusion, the Court held, created a discrimination that the purpose of Article 304(a) of the Constitution was specifically designed to prevent. Consequently, the Court concluded that goods manufactured or produced in the State of Madhya Bharat had not been subjected to the tax that was imposed on tobacco leaves, manufactured tobacco and tobacco used for bidi manufacturing when those items were imported from other States and sold by an importer. Because of this disparity, the tax could not be placed within the saving provisions of Article 304(a) and, as the Court reiterated, it contravened the provisions of Article 301 of the Constitution. The High Court, therefore, was right in declaring the tax invalid. The Court further stated that the assessment of tax under the notified scheme was thus illegal. It was noted that a portion of the tax so assessed had already been paid by the petitioners, and that the payment had been made under a mistake as defined in section 72 of the Indian Contract Act. Accordingly, the Government that had received the mistaken payment was legally bound to refund it. The remaining question, according to the Court, was whether the taxpayer had to obtain the refund through a civil suit or whether the High Court could order the repayment directly under its jurisdiction conferred by Article 226 of the Constitution. The Court explained that Article 226 bestowed a very wide jurisdiction on the High Court, empowering it to grant relief for enforcement of fundamental rights and other rights by issuing directions, orders or writs, including writs such as habeas corpus, mandamus, prohibition, quo warranto and certiorari.

In this matter the Court explained that the writs of mandamus, prohibition, quo warranto and certiorari were all within the jurisdiction of a High Court under article 226 of the Constitution. The petitioners contended that a writ of mandamus could be properly employed when a taxpayer had paid money to the Government by mistake, because such a writ could command the Government to return the erroneously paid amount. The Court observed that it was not disputed that several High Courts had previously used the writ of mandamus to enforce the repayment of money that had been paid mistakenly. The Court then referred to a recent decision of this Court in the case of Firm Mehtab Majid and Co. versus the State of Madras, reported in A.I.R. 1963 S.C. 928, where a petition under article 32 resulted in an order that the tax unlawfully collected from the petitioner under rule 16 of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939, should be refunded. Although the question of whether this Court possessed the power to order such a refund was not raised in that case, the order was nonetheless issued.

The Court further discussed the case of Sales Tax Officer, Banaras versus Kanhaiya Lal Mukundlal Saraf, reported in [1959] S.C.R. 1350. In that case the appellants challenged the correctness of a High Court order that had been made under article 226 directing the refund of taxes that had been paid under the Uttar Pradesh Sales Tax Act on the respondent’s forward transactions in silver bullion. After the High Court of Allahabad held the levy of sales tax on those transactions to be ultra vires, the respondent sought a refund of the tax paid. When the refund was refused, the respondent applied to the High Court under article 226 for a writ of certiorari to set aside the assessment orders and for a writ of mandamus requiring the appellants to return the illegally collected amount. The High Court ordered the refund and this Court affirmed that order on appeal. The Court noted that the power of the High Court to order such a refund had not been challenged either before the High Court or before this Court, and therefore saw no reason to doubt that High Courts possessed that power.

Continuing its analysis, the Court stated that when a right—whether a fundamental right or a statutory right—had been infringed, it would be insufficient for the Court merely to declare the existence of the right or to declare that the right had been violated. If the infringement had only been threatened, the Court would be satisfied by an order directing the Government or the relevant statutory authority not to take the contemplated action. The Court recalled its own precedent that in cases of mere threat, an application under article 226 was appropriate and the courts would grant relief by issuing an injunction‑type order. The Court argued that it would be unreasonable to hold that, while the Court could grant such an injunction when a right was merely threatened, it must refuse to provide consequential relief—such as ordering the repayment of money—when the right had actually been invaded. Consequently, the Court concluded that High Courts have the authority, in the enforcement of fundamental and statutory rights, to order the repayment of money that the Government had collected without legal authority.

In this case the Court observed that it would be insufficient for a court merely to declare that a right exists and has been infringed, or to simply set aside an illegal order. The Court explained that, for the reasons previously discussed, it held that High Courts possessed the authority to enforce both fundamental rights and statutory rights by granting consequential relief, which could include ordering the Government to repay money that had been obtained without legal authority. At the same time the Court cautioned that the special remedy under Article 226 was not meant to completely replace the ordinary civil‑action procedures for obtaining relief, nor to eliminate defenses that are properly available in such actions. The Court reiterated that the power to grant relief under Article 226 is a discretionary power, especially where the writ sought is of the mandamus type. In exercising that discretion, the Court listed several factors that High Courts ordinarily consider. One factor is any delay by the aggrieved party in invoking the special remedy and the reasons for such delay. Another factor is the nature of the factual and legal controversy that must be resolved in order to determine whether consequential relief is appropriate. Consequently, where a person approached the Court under Article 226 claiming that he had been taxed under an invalid provision and had paid the tax by mistake, the Court stated that even if it found the assessment to be void and the payment to have been made by mistake, it was not obligated to direct repayment. The decision to order repayment rested on the Court’s discretion and would vary according to the specific facts and circumstances of each case. The Court emphasized that it was neither easy nor desirable to formulate a universal rule. However, the Court indicated a general principle that where there has been an unreasonable delay, the Court should ordinarily refrain from assisting the party through the extraordinary mandamus remedy. Likewise, even in the absence of delay, if the Government or the statutory authority against whom the relief is sought raises a prima facie, triable issue – such as a limitation defence – the Court should ordinarily decline to issue a mandamus directing payment. In both of these situations the Court considered it appropriate to allow the party to pursue his remedy through the ordinary civil‑court process and to refuse the extraordinary relief under Article 226. The High Court had, in the applications that gave rise to Civil Appeal Nos. 362‑377 of 1962 and Civil Appeal Nos. 861‑‑867 of 1962, allowed the prayer for refund.

In the matters that gave rise to Civil Appeal No. 25 of 1963, the tax provisions that formed the basis of the assessments and payments were held to be void by the High Court of Madhya Pradesh in the decision reported as Mohammad Siddique v. State of Madhya Pradesh dated 17 January 1956. Subsequently, on 27 August 1957, the Appellate Authority for Sales Tax in Madhya Bharat issued an order that relied upon the High Court’s declared voidness of those provisions. The petitioners later informed the Court that they became aware of their error in making the tax payments after learning of the High Court judgment and the appellate authority’s order. It is reasonable to conclude that the petitioners would have discovered the mistake as soon as the 17 January 1956 decision became known to them. All sixteen applications concerning refund were filed within a period of less than three years from that judicial pronouncement. The High Court evaluated the time elapsed and held that the delay was not unreasonable, and consequently ordered a refund of the taxes paid. The Court finds that this exercise of discretion by the High Court was sound and judicial, and therefore it should not be interfered with. Moreover, no litigable question as to the availability of the consequential relief was raised before the High Court, nor has any such issue been suggested before this Court. Accordingly, the refund orders rendered by the High Court in those cases cannot be disturbed.

The circumstances surrounding Civil Appeals Nos. 861 to 867 of 1962 differ markedly. The applications from which those appeals arose were filed in September 1959, which is approximately three years and eight months after the 17 January 1956 decision that declared the relevant tax provisions void. Because of this longer interval, the High Court was required to examine the question of delay before granting any refund, yet the record shows that no consideration was given to that question. In each of the refund orders, the High Court merely stated that the present case was governed by Bhailal Bhai’s Case (1960 M.P.C. 304), that the learned Government Advocate had formally raised the issue of the appropriate remedy for tax refund in order to preserve the question for the Supreme Court, and that the petition was therefore allowed, directing the opposite parties to refund to the applicant firm the amount of tax collected during the period in question. The learned Judges appear to have overlooked that the delay in these petitions exceeded the delay observed in the petition that gave rise to Civil Appeal No. 362 of 1962 in Bhailal Bhai’s case. On behalf of the respondents‑petitioners in the appeals numbered 861 to 867 of 1962, counsel argued that the delay in the present cases was not of a magnitude that would justify refusing the refund orders. He further contended that, assuming…

The Court observed that although the remedy of recovery by a civil suit was barred at the time the applications for refund were filed, that fact alone did not justify refusing relief under Article 226 of the Constitution. The Court agreed with the learned counsel that the provisions of the Limitation Act do not directly apply to the grant of relief under Article 226. Nevertheless, the Court considered that the maximum period prescribed by the legislature for instituting a civil suit could serve as a reasonable benchmark for assessing delay in seeking relief under Article 226. Accordingly, the Court held that even a delay shorter than the limitation period for a civil action might be deemed unreasonable, while a delay exceeding that period would ordinarily be regarded as unreasonable. The Court noted that the Limitation Act specifies a three‑year period for recovering money paid by mistake, measured from the date the mistake is discovered. If the mistake in the present matters was discovered on or shortly after 17 January 1956, the Court found that the applications made thereafter were unreasonably delayed. Conversely, if, as counsel suggested, the mistake was discovered much later, that factual issue would be difficult to determine in writ proceedings and thus remains controversial. In either scenario, the Court concluded that the High Court’s orders directing refund in the seven cases could not be sustained. The application that gave rise to Civil Appeal No. 25 of 1963 was filed in 1958, which falls within three years of the High Court’s decision in Mohammad Siddique v. State of Madhya Pradesh; consequently, the High Court was correct in holding that case governed by Bhailal Bhai’s precedent, and there was no ground for interference with the refund order in that case. Accordingly, the Court allowed Civil Appeals Nos. 861 to 867 of 1962 in part and set aside the refund orders issued in those appeals. The petitioners were left free to pursue any civil remedy that might be available, provided it was not barred by limitation. No costs were awarded in those appeals. In Civil Appeals Nos. 28 and 29 of 1962, the respondents did not appear, so no costs order was made. In the remaining dismissed appeals, the appellants were ordered to pay costs to the respondents. A single hearing fee was levied for all the appeals, and the appeals numbered 861‑867 were partly allowed while the other appeals were dismissed.