Calcutta High Court
Dolly Mazumder & Ors vs Zee Telefilms Ltd on 7 June, 2013
Author: Ashim Kumar Banerjee
Bench: Ashim Kumar Banerjee
ORDER SHEET
APO NO.74 OF 2013
AP NO.300 OF 2005
IN THE HIGH COURT AT CALCUTTA
Civil Appellate Jurisdiction
ORIGINAL SIDE
DOLLY MAZUMDER & ORS.
Versus
ZEE TELEFILMS LTD.
BEFORE:
The Hon'ble JUSTICE ASHIM KUMAR BANERJEE
The Hon'ble JUSTICE DR.MRINAL KANTI CHAUDHURI
Date : 7th June, 2013.
Mr.Samrat Sen, Advocate
Ms.Manali Bose, Advocate
Ms.Shrayashee Saha, Advocate
for the appellants.
Mr.Sabyasachi Chowdhury, Advocate
Mr.Soumen Das, Advocate
for the respondent.
The Court : We heard the parties at length on the last occasion. We reserved our judgment as the learned Counsel on behalf of the respondent was asked to clarify an issue. When the matter appeared for judgment Mr.Sabyasachi Chowdhury, learned Counsel appeared for the respondent 2 and prayed for further hearing. Mr.Chowdhury informed this Court, he could not come due to his personal reasons. Mr.Chowdhury's name was not taken at all before us on the last occasion, otherwise we could have simply adjourned this matter that we do in all cases. However, for ends of justice, we cancelled the last hearing and placed this matter for hearing afresh today. The matter is heard at length again.
The facts would depict, the parties entered into an agreement for telecasting a mega serial "Nayantara" in the Bengali version of the channel belonging to the respondent. Initially, parties agreed, the mega serial would be telecast in 300 episodes. While the serial was coming to a close, the appellant being the producer of the serial applied for extension to bring the serial to a logical conclusion. They asked for further 35 episodes, the respondent categorically rejected. Representations were made on behalf of the appellants. Ultimately, the respondent gave two options.
Option - I : There would be 10 extensions at the original rate of Rs.50,000/- each.
Option - II : 35 extensions at the rate of Rs.17,000/- each.
The original appellants agreed to opt for option two, however, kept his prayer alive for enhancement of the sum. The documents would clearly depict, it was an unilateral prayer without having any support from the other side. The respondent categorically rejected such rider as we find 3 from the letter appearing at page 280 of the paper book. The appellants kept on making prayer one after the other without having any response from the respondent. After 35 episodes being telecast, the appellants in November 2002 suddenly wrote to the respondent thanking them to agree to their proposal for enhancement of the amount. The logic so advanced by the appellants was based upon a TDS certificate that the respondent mistakenly issued, according to them. In May 2002 the accounts department of the respondent deducted TDS on the basis of Rs.50,000/- per episode for 14 episodes meaning thereby, the accounts department passed Rs.7 lakhs and transferred it to the credit of the appellants by deducting tax at source and depositing the same with the revenue. Issuance of tax deduction certificate is not in dispute. Significant to note, the TDS certificate was never cancelled. The excess amount so deposited with Revenue to the credit of the respondent, was not contemporaneously refunded. The respondent was taken aback after receipt of the said letter. They immediately confronted and insisted, the episodes were telecast on the express understanding, the appellants would be entitled to charge Rs.5.95 lakhs and not Rs.7 lakhs as mistakenly credited to their account as alleged by the respondent. The appellants were not content to such extent. They kept on demanding Rs.50,000/- for all 35 episodes that gave rise to a dispute, ultimately referred to arbitration. The learned Arbitrator, 4 although rejected the contention of the appellants to the extent so advanced in the statement of claim, allowed the claim on a peculiar logic. According to the Arbitrator, the respondent was in a driving seat and the appellants did not get opportunity to confront and they had to accept either of the options, both to the detriment of the appellants. The learned Judge set aside the award and, in our view, very rightly. His Lordship was of the view, the TDS certificate could not be the sole basis of the claim of the appellants.
We have heard Mr.Samrat Sen, learned Counsel being ably assisted by Ms.Manali Bose, learned Counsel appearing for the appellant. We have also heard Mr.Sabyasachi Chowdhury, learned Counsel being ably assisted by Mr.Soumen Das, learned Counsel appearing for the respondent. We would have simply dismissed the appeal as we are in full agreement with His Lordship on the proposition of law. However, one aspect was either overlooked by His Lordship or not at all placed before him, that we wish to consider. Under the relevant provisions of the Income Tax Act, particularly section 194C, any person responsible for paying any sum to its creditor is obliged to deduct at source appropriate tax and deposit the same with the revenue. Such payment/deduction must be made either at the time of credit or at the time of payment. Section 198 would provide, all sums deducted under Section 194C shall, for the purpose of computing the 5 income of an assessee, be deemed to be received. Section 199 would provide, any deduction made under the foregoing provisions and paid to the Central Government would be treated as payment of tax on behalf of the person for whose income the deduction was made.
On a combined reading of the three provisions we would find, the debtor is under obligation to deduct tax at source at the time of credit and/or payment actually being made. Such deduction for the purpose of assessment is treated as the tax deducted at source on the income of the assessee as if the assessee received the said sum. The sum might be lying in the credit of the debtor. Once the tax is deducted at source, it is deemed to have been passed for payment to the assessee being the creditor. In the instant case, admittedly the respondent deducted tax on the amount of Rs.7 lakhs and deposited the same with the revenue and issued necessary certificates to the appellants. Hence, they are obliged to make payment of the said sum of Rs.7 lakhs. They have already paid Rs.5.95 lakhs. They would be obliged to make payment of the balance sum of Rs.1.05 lakh. Such payment must be made within four weeks from date. In default of payment of the said sum within the stipulated period, the amount would carry interest at the rate of 8 per cent per annum on and from the date of default until payment.
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There would be stay of operation of this judgment and order for a period of two months from date.
The appeal is disposed of without any order as to costs.
(ASHIM KUMAR BANERJEE, J.) (DR.MRINAL KANTI CHAUDHURI, J.) sd/