2015 (9) TMI 862

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....ovember 13, 1990 refunded as well as to make payment of running interest at the rate of 9% per annum on the interest accrued on the aforesaid amounts to the assessee/respondent.   4.Brief facts in this case are: the respondent- assessee is a company incorporated under the provisions of Companies Act, 1956 engaged in the business of manufacturing Anhydrous Hydrogen Fluoride and Chlorofluorocarbon Refrigerant Gases. The assessee had entered into a technical collaboration agreement with a Non-Resident company based in U.S.A (for short, "Non-Resident Company"). The permissions sought for and necessary approvals were granted by the appropriate authority(s) including the Reserve Bank of India for the aforesaid.   5. The appellant ....

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....nbsp; 8. The assessee approached the Chief Commissioner of Income Tax, Gujarat by making an application dated October 31, 1992 against the aforesaid order. The Chief Commissioner of Income Tax by letter dated 18.01.1993 refused to entertain the assessee's application on the ground that the refund of excess amount of tax was firstly, not as a result of any order passed by the authority under the Act and secondly, the provisions of Section 244(1A) of the Act are not applicable to the facts of the assessee's case.   9. The assessee aggrieved by the aforesaid, approached the Central Board of Direct Taxes (for short, "the Board") to claim the interest on refund of excess amount of tax paid by it to the Revenue. The Board by it....

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....ties below and the judgment and order of the High Court.  13. The High Court, while disposing of the writ petition has primarily placed reliance upon the dictum of this Court in Sandvick Asia case (supra) and consequently allowed the petition of the assessee. The aforesaid decision was doubted by a Bench of this Court and referred to the larger Bench for its consideration and clarification by order dated 23.08.2012. In reference, a Three Judge Bench of this Court in Commissioner of Income Tax, Gujarat vs. Gujarat Fluoro Chemicals, (2014) 1 SCC 126 has explained the decision in Sandvick Asia case (supra). This Court therein has clarified the law on interest on refund of tax as laid down in the aforesaid decision and observed thus: &n....

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.... view, the aforesaid judgment has been misquoted and misinterpreted by the assessees and also by the Revenue. They are of the view that in Sandvik case (supra) this Court had directed the Revenue to pay interest on the statutory interest in case of delay in the payment. In other words, the interpretation placed is that the Revenue is obliged to pay an interest on interest in the event of its failure to refund the interest payable within the statutory period. 7. As we have already noticed, in Sandvik case (supra) this Court was considering the issue whether an assessee who is made to wait for refund of interest for decades be compensated for the great prejudice caused to it due to the delay in its payment after the lapse of statutor....