Gujarat High Court
Punjbhai Surigbhai Khavad vs Executive Engineer on 28 August, 2017
Author: M.R. Shah
Bench: M.R. Shah, B.N. Karia
C/SCA/13528/2017 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 13528 of 2017
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE M.R. SHAH Sd/-
and
HONOURABLE MR.JUSTICE B.N. KARIA Sd/-
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1 Whether Reporters of Local Papers may be allowed NO
to see the judgment ?
2 To be referred to the Reporter or not ? NO
3 Whether their Lordships wish to see the fair copy of NO
the judgment ?
4 Whether this case involves a substantial question of NO
law as to the interpretation of the Constitution of
India or any order made thereunder ?
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PUNJBHAI SURIGBHAI KHAVAD....Petitioner(s)
Versus
EXECUTIVE ENGINEER....Respondent(s)
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Appearance:
MR NITIN M AMIN, ADVOCATE for the Petitioner(s) No. 1
MR SANJAY M AMIN, ADVOCATE for the Petitioner(s) No. 1
MR HARDIK VORA, AGP for the Respondent(s) No. 1
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CORAM:HONOURABLE MR.JUSTICE M.R. SHAH
and
HONOURABLE MR.JUSTICE B.N. KARIA
Date : 28/08/2017
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C/SCA/13528/2017 JUDGMENT
ORAL JUDGMENT
(PER : HONOURABLE MR.JUSTICE M.R. SHAH) 1.00. RULE. Mr. Hardik Vora, learned Assistant Government Pleader waives service of notice of rule on behalf of the respondent.
2.00. In the facts and circumstances of the case and with the consent of the learned advocates appearing on behalf of the respective parties, present petition is taken up for final hearing.
3.00. By way of this petition under Article 226 of the Constitution of India, the petitioner has prayed for the following main reliefs :-
"(A). Your Lordships may be pleased to issue a writ of mandamus or any other appropriate writ, direction and order, directing the respondent to deposit forthwith the compensation amounts received by him by way of L.C.s from the Government and kept with him, without deducting TDS and court fees in the Reference Court;
(B). Your Lordships may be pleased to issue a writ of mandamus or any other appropriate writ, direction and order, directing the respondent to deposit forthwith the amount of TDS and court fees which he has deducted in the cases in which part of the amount is deposited by him;
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HC-NIC Page 2 of 7 Created On Sat Sep 02 08:01:50 IST 2017 C/SCA/13528/2017 JUDGMENT (C). Your Lordships may be pleased, by way of interim relief/order, to direct the respondent to forthwith deposit the compensation amount received by him by way of L.C.s from the Government and kept with him, without deducting TDS and court fees pending the hearing and final disposal of this petition;
(D). To direct the respondent to deposit interest amount at the rate of 15% on the compensation amount less deposited by him till date as well as on the compensation amount not at all deposited so far, as well as on the court fees, as well as on the TDS deducted within a period of one month calculated from the date of receipt of L.C.s. by him till the date of deposit in the Court."
4.00. It is the case on behalf of the petitioner that though no TDS was required to be deducted from the amount of interest under section 28 of the Land Acquisition Act awarded for the acquired land, acquired under the provisions of the Land Acquisition Act, 1894 and despite the direct decision of the Division Bench of this Court in the case of Movaliya Bhikhubhai Balabhai Versus Income Tax Officer (TDS), reported in (2016) 388 ITR 383 (Guj.), the respondent has deducted total sum of Rs.37,82,000/- being 20% towards income tax and therefore, it is requested to direct the respondent to return the amount of Rs.37,82,000/- wrongly deducted by the respondent towards TDS.
5.00. Mr.Hardik Vora, learned Assistant Government
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C/SCA/13528/2017 JUDGMENT
Pleader appearing on behalf of the respondent has submitted that, as such, there was a bonafide error on the part of the respondent in deducting the aforesaid amount of Rs.37,82,000/- being 20% towards income tax and in depositing the same with the Income Tax Department. Therefore, he has submitted that either the petitioner - claimant may be directed to approach the Income Tax Department for refund and/or get credit of the amount of tax so deducted and/or the respondent may be permitted to get refund from the Income Tax Department and thereafter the respondent may pay the same to the claimant.
6.00. Having heard the learned advocates appearing on behalf of the respective parties and considering the direct decision of the Division Bench of this Court in the case of Movaliya Bhikhubhai Balabhai (supra) and as such, it is not in dispute that on the amount of compensation / interest under section 28 of the Land Acquisition Act, on enhanced compensation, income tax was not liable to be deducted and therefore, TDS ought not to have been and/or could not have been deducted by the respondent - Special Land Acquisition Officer and/or ought not to have been deposited with the Income Tax Department. As such, the learned Assistant Government Pleader has candidly conceded that the amount of 20% of the amount of compensation was wrongly deducted towards TDS, however, according to him, the same was a bonafide mistake on the part of the respondent - Special Land Acquisition Officer.
6.01. In view of the aforesaid facts and circumstances and more particularly considering the decision of the Division Page 4 of 7 HC-NIC Page 4 of 7 Created On Sat Sep 02 08:01:50 IST 2017 C/SCA/13528/2017 JUDGMENT Bench of this Court in the case of Movaliya Bhikhubhai Balabhai (supra), action of the respondent in deducting 20% TDS of the amount of compensation and/or interest under section 28 of the Land Acquisition Act on the enhanced amount of compensation cannot be sustained and the same deserves to be quashed and set aside and is hereby quashed and set aside.
6.02. Now, the next question which is posed for consideration of this Court is, what relief the petitioner is entitled to. Whether the respondent may be directed to first pay the amount of income tax which the respondent has wrongly deducted and deposited with the income tax department or the claimant may be relegated to approach the Income Tax authority or the respondent be directed to pay the said amount to the claimant after the respondent gets refund from the Income Tax Department.
6.03. It is required to be noted that as such while depositing the amount of income tax with the Income Tax Department, PAN Number of the petitioner has not been stated and therefore, as such, the amount so deducted could not have been credited in the account of the petitioner. Therefore, the petitioner may not be relegated to approach the Income Tax Department for refund of the amount which has been wrongly deducted by the respondent towards income tax and for which the petitioner - agriculturist / farmer is not at all at fault. On the other hand, if the amount of income tax is wrongly deducted by the respondent and wrongly deposited with the Income Tax Department by the respondent, in that case, it will always be open for the respondent to get the Page 5 of 7 HC-NIC Page 5 of 7 Created On Sat Sep 02 08:01:50 IST 2017 C/SCA/13528/2017 JUDGMENT refund of such amount by filling Form No.26B under Rule 31A(3A) of the Income Tax Rules.
6.04. Under the circumstances, while allowing the present petition, the respondent department is to be directed to first refund / return the amount of Rs.37,82,000/- which the respondent has wrongly deducted towards income tax and deposited with the Income Tax Department and thereafter, it will be open for the respondent to apply for refund of the income tax which the respondent has wrongly deducted and deposited with the Income Tax Department.
7.00. In view of the above and for the reasons stated above, present petition succeeds. The respondent is hereby directed to return the amount of Rs.37,82,000/- to the petitioner, which the respondent has wrongly deducted towards income tax on amount of interest under section 28 of the Land Acquisition Act on enhanced compensation and wrongly deposited with the Income Tax Department, to be returned / refunded to the petitioner within a period of four weeks from today, failing which, it shall carry interest at the rate of 9% per annum.
It is made clear and as stated by Mr.Amin, learned advocate appearing on behalf of the petitioner, that on return of the aforesaid amount to the petitioner by the respondent, the petitioner shall not claim any refund from the Income Tax Department. It will always be open for the respondent to get refund of the aforesaid amount from the Income Tax Department by submitting appropriate / necessary form more particularly Form No.26B under Rule 31A(3A) of the Income Page 6 of 7 HC-NIC Page 6 of 7 Created On Sat Sep 02 08:01:50 IST 2017 C/SCA/13528/2017 JUDGMENT Tax Rules and as when such an application is made, concerned officer / authority of the Income Tax Department to consider the same in accordance with law and on merits and return / refund the said amount as early as possibly and preferably within a period of three months from the date of such application.
Rule is made absolute to the aforesaid extent. No costs.
Sd/-
(M.R. SHAH, J.) Sd/-
(B.N. KARIA, J.) Rafik..
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