Court dismisses plea for TDS adjustment, allows appeal with payment conditions, acknowledging bona fide mistake.

The court dismissed the appellant's plea for TDS adjustment due to constructive res judicata but granted an opportunity to pay the balance amount with enhanced interest, acknowledging the respondent's role in the appellant's bona fide mistake. The appeal was allowed with specific conditions for payment, ensuring equity and justice.

---

---

Issues Involved:
1. Adjustment of TDS towards the amount payable.
2. Waiver of right to dispute legality of payment.
3. Opportunity to make payment of the balance amount.

Issue-wise Detailed Analysis:

1. Adjustment of TDS towards the amount payable:

The appellant contended that the deduction of interest by way of TDS should be adjusted towards the amount payable under the conditional order disposing of the winding-up petition. The appellant argued that the Income-tax Act mandates the deduction of TDS, which should be treated as payment on behalf of the creditor to the revenue. The respondent opposed this, asserting that the original order by P.C. Ghose, J., which specified the amount payable, had attained finality and could not be varied by a judges' summons. The court found substance in the appellant's argument that TDS should be deemed paid on behalf of the creditor. However, it concurred with the respondent that the plea of adjustment was barred by constructive res judicata, as it was available at the time of the original order but not raised.

2. Waiver of right to dispute legality of payment:

The appellant argued that by accepting the first instalment without protest, despite being aware of the TDS adjustment, the respondent had waived its right to dispute the legality of the payment. The court noted that the appellant had provided detailed accounts and indicated proposed instalments, including the TDS adjustment, before making the first payment. The respondent accepted all five instalments without objection, leading the appellant to believe that the TDS adjustment was acceptable. The court held that the respondent's silence and acceptance of the payments could not be seen as a waiver but recognized the appellant's bona fide mistake.

3. Opportunity to make payment of the balance amount:

The appellant sought an opportunity to pay the balance amount if the first two contentions were found untenable. The court agreed that the appellant should be given a chance to make the balance payment due to the respondent's acceptance of the payments without protest. The court emphasized that extending the time for payment does not amount to amending the original order or reviewing it. The court allowed the appeal, extending the time for the appellant to make the balance payment within one month with an enhanced interest rate of 12% per annum on the deficit amount from the date it became payable until actual payment. Failure to comply would result in the dismissal of the appeal.

Conclusion:

The court dismissed the appellant's plea for TDS adjustment due to constructive res judicata but granted an opportunity to pay the balance amount with enhanced interest, acknowledging the respondent's role in the appellant's bona fide mistake. The appeal was allowed with specific conditions for payment, ensuring equity and justice.

---