UNFOLDED AREA OF THE UNJUST ENRICHMENT
The theory of unjust enrichment has arisen from the quasi-contract. Moreover, a quasi-contract is
not a real contract and its cause of action involves an alleged promise to pay, which is purely
fictitious. It gives rise to a situation where an obligation is cast upon the parties by law, but not
by the terms of the contract. The view that quasi-contracts are recognised as the basis of
restitutionary obligations under the English Law claims to find sound support. 1
A person who has been unjustly enriched at the expense of another is required to make
restitution to the other 2 . It does not consider any kind of gift and is not legally unjustifiable,
where compensation is usually expected. Sometimes, the defendant gets benefited by the
plaintiff and then, there is no point to raise the issue of compensation at the time of the contract,
but after the completion of the contract, it becomes morally liable to pay the damages to the
plaintiff. “Enrichment” and “expense” require each other in order to function as constituents of
In the daily life, it has become evident to see and observe the applications of unjust enrichment
from GST to central excise tax and so on. The excise duty, as well as education cess and S&H
Education Cess paid by the appellant at the time of removal of excisable goods from his unit, has
been passed on the customers 3 , therefore, any refund of the excise duty or education cess given to
the appellant would amount to unjust enrichment, which is not permissible, in view of Section
11B 4 of the Central Excise Act. Refund mechanism is based on the basic principle of unjust
enrichment. As we all know getting the refund from Government is always a tedious task,
and the most difficult task is to pass the unjust enrichment test i.e. to satisfy the Departmental
officer that incidence of tax/duty has not been passed on to another person. The same test of
unjust enrichment has to be passed under GST also while claiming the refund undersection 38 of
the Draft CGST/SGST Ac. 5
In India, unjust enrichment is covered under the title of ‘Of certain relations resembling those
created by contract’ in Sec 68 to sec 72 of the Indian Contract Act, 1872. In Banaras Bank
1 Brooks Wharf and Bull Wharf Ltd. v. Goodman Brothers,  1 KB 534.
2 American Law Institute, Restatement to the Law of Restitution: Quasi contracts and Constructive trusts (ALI,
Washington, D.C., 1936).
3 M/s JSB Aluminum v. Commissioner of Central Excise, Jammu, 2012 (2) ECS ( 71)(Tri-Del).
4 Central Excise Act, Art.11B - Refund in terms of the provisions shall be allowed if the incidence of duty paid
erroneously has not been passed on to any other person.
5 Central Board of Excise and Customs, India, available at:
http://www.cbec.gov.in/htdocs-cbec/excise/ecs-cx/cx-unjst-enrich/cx-unj-enrich-ecs-idx (Last modified on
November 15, 2017).
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