TaxTMI 
TaxTMI 
2011 (12) TMI 366
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....r establishment by name M/s Abad Enterprises. In respect of the assessment year 1991 - '92, return was filed under the Wealth Tax Act on 30.10.1991, declaring the net wealth of Rs. 1,46,43,300/-. While filing the said return, the income of the firm was given, as estimated, since the accounts of the firm were not finalized. But, subsequently, a revised return was filed on 22.03.1992, declaring the net wealth as Rs. 87,88,200/- based on the actual facts and figures. According to the petitioner/assessee, the assessee's share in purchase tax paid by the other concern was liable to be excluded, more so, since the concerned Tribunal had already held in the assessee's own case, that the purchase tax was an admissible liability. However, since the Department had already sought for a 'reference' against the said order passed by the Tribunal, the Assessing Authority ignored the revised return and finalized the assessment based on the. entries as given in the original return, taking in the purchase tax element as well, vide Ext. P1. 4. Being aggrieved of Ext. P1 assessment order, the petitioner preferred an appeal before the first appellate authority (Commissioner), who accepted the case o....
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....ents, pursued by the other petitioners and the authorities under the Act, in respect of W.P.(C) Nos. 3435 & 3436 of 2008. 6. Despite pendency of the matters for more than three years, the respondents have not chosen to file any counter-affidavit. Mr. Jose Joseph, the Learned standing counsel appearing for the respondents submits that no factual position is sought to be disputed and as such, non-filing of counter-affidavit Is of no consequence. 7. Mr. P. Balakrishnan, the learned counsel appearing for the petitioners submits that the idea and understanding of the respondents as to the' eligibility of the petitioner/assessee to have interest on the refund under the relevant provisions of the Wealth Tax Act is quite wrong and misconceived. The learned counsel submits that the scheme of the Statute is rather similar to the position under the Income Tax Act and as such, though there is no direct decision on the point under the Wealth Tax Act, reliance can very well be made on the decisions rendered by the Apex Court with regard to the provisions under the Income Tax Act, particularly, in relation to Sections 214 and 244A. Reliance is sought to be placed on the decisions rendered b....
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....succeeded in getting the same reversed. It was thereupon, that the petitioner/assessee approached this Court by way of appeal, leading to quashing of all the orders and directing the Assessing Authority to 're-do' the assessment as specified, leading to Ext. P2 order, almost in similar lines as given in Ext.P1. The petitioner/assessee was made to fight for the cause further and finally, the first appellate authority held that the course pursued by the Assessing Officer was wrong and directed the Assessing Officer to allow 'proportionate liability' for purchase tax in the computation of net wealth. This made the Assessing Authority to realize the correct position of law, thus leading to Ext. P3 order, holding that, there was an excess payment and ordered refund. Admittedly, the proceedings attained finality on passing Ext. P3 order by the second respondent, as the Department did not choose to challenge the same any further. 11. The uncontroverted factual position as above reveals that Ext. P3 was the order, which ought to have been passed by the second respondent/Assessing Authority, in place of Ext. P1 original assessment order; had the correct position of law been understood an....
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....mmencing from 01.04.1989 or any subsequent assessment year, as provided under sub Section (4A). The Law applicable to the instant case, the assessment years being 1991 - '92/1992- '93, is sub Section (4B) of Section 34A, which is extracted below for convenience of reference. Section 34A(4B)(a) Where refund of any amount becomes due to the assessee under this Act, he shall, subject to the provisions of sub-section, be entitled to receive in addition to the said amount, simple interest thereon calculated at the rate of one half per cent for every month or part of a month comprised in the period or periods from the date or, as the case may be, dates of payment of the tax or penalty to the date on which the refund is granted. Explanation : For the purposes of this clause, "date of payment of the tax or penalty" means the date on and from which the amount of tax or penalty specified in the notice of demand issued under section 30 is paid in excess of such demand. (b) If the proceedings resulting in the refund are delayed for reasons attributable to the assessee, whether wholly or in part, period of the delay so attributable to him shall be excluded from the period for which int....
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....e, there was no liability towards the payment of purchase tax, as a result of sales tax assessment and hence there could be no 'debt' owed by the assessee on the valuation date of that account. However, on further appeal, the correct factual position was meticulously analyzed by the appellate authority, who allowed the appeal and directed the Assessing Authority to reckon, the purchase tax liability as a deduction and to fix the tax liability accordingly, giving proportionate share of the purchase tax liability as given in the revised return, declaring the net wealth. It was pursuant to the said order, that the position was set right by the Assessing Authority, by passing Ext. P3 order dated 11.11.2005 arriving at the excess payment and ordered refund. In other words, this was an exercise which ought to have been pursued by the Assessing Authority at the first instance itself i.e. while passing Ext. P1 assessment order and it was only because of the misconsumption of the assessing authority as to the relevant provisions of law, that the proceedings took a different turn by virtue of Exts. P1 and P2, which were got corrected/set right only much later, by passing Ext. P3. This being ....
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....e amount with interest or otherwise for the delay if any, after issuance of a notice of demand. With regard to the eligibility to have refund, the cause originates from the actual assessment. The Scheme of the Statute is such that, it visualizes payment of interest, if the amount due to the assessee is wrongfully retained at the hands of the revenue/department. There is absolutely no merit or rationale on the part of the respondents in taking a contrary stand in Ext. P5 or in Ext. P7 on this score. This is more so, when once the assessment has been completed and the tax paid has been adjusted, the amount becomes the tax paid pursuant to assessment order and as such, if any refund arises later, the same has necessarily, to carry interest as well. 16. Referring to the relevant provisions of the Income Tax Act, particularly Sections 214 and Section 244 (1A), it has been held by the Apex Court in Modi Industries Ltd. (supra) that the assessee is entitled to have interest on the excess payment of advance tax. The legislative history has been discussed in the said decision, explaining the meaning of the term 'regular assessment'. The reliance placed on the said decision by the assesse....
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....on 'self-assessment' , bringing the same within the purview of "any other case" under Section 244A(i)(b). After discussing the relevant provisions of law and the binding judicial precedents, the Bench observed that, besides the statutory liability, in view of the law declared by the Apex Court in Sandvik Asia Ltd's case (cited supra), the assessee was entitled to have interest on refund, following the general principle to pay interest on sums wrongfully retained. The above decision was challenged by the Revenue before the Apex Court and a three-member Bench, after considering the said case along with the connected cases, has affirmed the decision in Cholamandalam Investment & Finance Co. Ltd. (supra) as per the common verdict passed in H.E.G. Ltd. (supra). 18. There is no factual controversy at all, that the petitioners had filed a revised return declaring the actual net wealth, which however was ignored by the Assessing Officer, while passing Ext. PI, till the same was finally accepted after different rounds of litigations, by passing Ext. P3. Had the Assessing Authority passed a proper order as given in Ext. P3 at the initial stage i.e. when Ext. P1 order was passed, applying ....