Allahabad High Court
Upper Doab Sugar Mills, Shamli vs State Of U.P. And 2 Others on 2 February, 2017
Bench: Bharati Sapru, Vinod Kumar Misra
HIGH COURT OF JUDICATURE AT ALLAHABAD ?Court No. - 35 Case :- WRIT TAX No. - 825 of 2016 Petitioner :- Upper Doab Sugar Mills, Shamli Respondent :- State Of U.P. And 2 Others Counsel for Petitioner :- Diptiman Singh Counsel for Respondent :- C.S.C. Hon'ble Bharati Sapru,J.
Hon'ble Vinod Kumar Misra,J.
State has filed supplementary affidavit seeking one month time to make payment to the petitioner as they do not dispute that the amount is liable to be refunded. Learned counsel for the respondent has filed reply to the supplementary affidavit today in court, which is taken on record.
In the recent judgment, the Hon'ble Apex Court in the case of Chironjilal Sharma versus Union of India reported in (2014) 360 ITR 237 has opined that the assessee must be compensated for the loss suffered by it on account of money being illegally withheld by the revenue.
This Court in the case of Chander Prakash Jain versus CIT reported in (2015) 234 Taxman 358 following the same judgment as well as the judgment in the case of Sandvik Asia Ltd. vs. CIT reported in (2006) 280 ITR 643 also took a view that the compensation is liable to be paid on the amount, which has been wrongfully withheld.
Needless to say that the delay in making the payment by the State will make them liable to pay compensation in view of the law laid down by the Hon'ble Apex Court in the case of Fargo Marine Company Log OutLtd. versus Comissioner of Customs reported in (2015) 12 SCC 792.
The position with regard to the compensation to be paid on inordinate delay in payment of refund has been clarified by the larger bench of Hon'ble Apex Court in the case of Commissioner of Income Tax versus Gujarat versus Gujarat Fluoro Chemicals, reported iin (2014) 1 SCC 126.
However looking to the peculiar facts and circumstances of the case, especially when the respondent State had retained the disputed amount, which was required to be refunded to the petitioner, it would be just and appropriate to compensate the petitioner by awarding an amount of interest as currently payable by the nationalised bank for the period the State has retained the disputed amount and uptil the date it is actually paid by the State.
List this matter on 15.2.2017, on which date learned standing counsel will inform the court that the amount of refund along with compensation has been paid to the petitioner or not.
Order Date :- 2.2.2017 rk