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of <h1>Court orders interest payment on income tax refund; petitioner to provide bank guarantee, aligning with High Court's directive.</h1> <h3>Kalyanmal Mills Limited Versus Income-Tax Officer And Others</h3> Kalyanmal Mills Limited Versus Income-Tax Officer And Others - [1992] 194 ITR 517, 99 CTR 146, 62 TAXMANN 330 Issues:1. Refusal to direct payment of interest to the petitioner by the trial court.2. Jurisdiction of the trial court in determining interest payment.3. Applicability of High Court's direction on interest payment.Analysis:The judgment pertains to a revision against an order by the Tenth Additional District Judge, Indore, refusing to direct the payment of interest to the petitioner in a case involving a dispute over an income-tax refund. The respondent, National Textile Corporation, had filed a suit for a declaration and injunction regarding the refund, leading to a series of court orders culminating in the release of the principal amount to the petitioner upon furnishing a bank guarantee. Subsequently, the petitioner sought payment of the accrued interest on the refunded amount, which the trial court declined, stating it was a matter for the High Court to decide. The petitioner contended that since the principal amount had been refunded, the interest should also be paid to them under the same terms.Upon reviewing the case, it was noted that previous court orders had directed the payment of the principal amount to the petitioner, with the High Court imposing conditions such as furnishing a bank guarantee. The Additional District Judge hesitated to rule on the interest payment, believing it fell under the High Court's jurisdiction due to the previous directives. However, the court found that once the High Court had ordered the release of the principal amount with conditions, the interest earned on that amount should also be paid to the petitioner under similar terms, including providing a bank guarantee for the interest amount.Regarding the procedural aspect of the case, an argument was raised about the appropriateness of filing a revision instead of a M. C. C. The court, without delving into this issue, emphasized that the Additional District Judge had failed to exercise jurisdiction by not ordering the interest payment following the High Court's directive on the principal amount. Consequently, the revision was allowed, and it was held that the interest should be paid to the petitioner upon furnishing a bank guarantee equivalent to the interest amount, in line with the conditions set for the principal amount.In conclusion, the judgment clarifies the obligation to pay interest on the refunded amount in accordance with the terms established for the principal sum, emphasizing the continuity of conditions set by the High Court in such matters and underscoring the need for lower courts to adhere to higher court directives in similar contexts.
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