2011 (6) TMI 330

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.... per cent per annum for the delay in paying interest after the lapse of about four years from the date of refund. 2. Being dissatisfied, the writ petitioner has come up with the present appeal. 3. There is no dispute that the Income-tax Department accepted the position that the writ-petitioner paid excess tax and as such, an order of refund was passed in respect of two separate assessment years. 4. In respect of assessment years 1962-63 to 1977-78, there was an order of refund of Rs. 8,94,665 and such refund was made on 21-5-1992. Similarly for the assessment years 1978-79 to 1979-80 a sum of Rs. 1,70,047 was ordered to be refunded and such refund was made on 24-5-1993. 5. However, at the time of making payment of refund, no interest wa....

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....ntitled to get further interest till the date of payment of interest. 9. Mr. Banerjee, the learned Advocate appearing on behalf of the Revenue, has, on the other hand, opposed the aforesaid contention of Mr. Bhardwaj and has contended that prior to the decision of the Supreme Court in the case of CIT v. Narendra Doshi [2002] 122 Taxman 717 which has been followed in the case of Sandvik Asia Ltd. (supra), there was no law laid down by the Supreme Court directing payment of interest on interest. According to Mr. Banerjee, the law laid down by the Supreme Court in the above decision has no application to the facts of the present case where interest was paid earlier to the decision of the Supreme Court in the case of Narendra Doshi (supra). In....

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....lared by it earlier. It is a device innovated to avoid reopening of settled issues, to prevent multiplicity of proceedings, and to avoid uncertainty and avoidable litigation. In other words, actions taken contrary to the law declared prior to the date of declaration are validated in larger public interest. The law as declared applies to future cases. (See Ashok Kumar Gupta v. State of U.P. [1997] 5 SCC 201, Baburam v. C.C. Jacob [1999] 3 SCC 362). It is for this Court to indicate as to whether the decision in question will operate prospectively. In other words, there shall be no prospective overruling, unless it is so indicated in the particular decision." [Emphasis supplied]. 12. After going through the decision in the case of Narendra Do....

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....tance in the aforesaid contention of Mr. Banerjee. The principle laid down by the Supreme Court in the case of Narendra Doshi (supra) is the law declared by the Apex Court on the question of payment of interest on interest on interpretation of the Income-tax Act. Moreover, the decision of the Supreme Court in the above case of Narendra Doshi (supra) was delivered on 21-7-2001 (although reported subsequently) whereas in this case, the order impugned in the writ-application refusing interest on interest was passed on 19-2-2002. Therefore, Mr. Banerjee is factually incorrect in his submission that at the time of passing of the order impugned in this writ-application the decision in the case of Narendra Doshi (supra) was not in existence. 14. ....