2003 (9) TMI 48 - HC - Income Tax

This is an application for contempt. By making this contempt application the petitioners contended that the alleged contemnors have violated the order passed by this court - wilful disobedience - Impossibility to act cannot be equated with the non-compliance of the order more particularly when the court directed the respondents to make all calculations and pay the appropriate amount - Such dispute must be related to quantum, subject to adjustment of statutory liabilities, if any - deduction on account of Income-tax may be good, bad or indifferent but cannot be said to be wilful disobedience or violation of the order of the court - contempt application fails. Hence, the contempt application stands dismissed

Summary

Issues:
Contempt application for violation of court order and calculation of additional compensation and interest. Dispute over deduction of Income-tax from the payment.

Analysis:
The contempt application was filed alleging violation of a court order directing the calculation of additional compensation and interest. The petitioners claimed that the alleged contemnors failed to comply with the order by deducting Income-tax from the payment made. The court noted that the disputed amount had been paid by the alleged contemnors within the extended period, albeit with the Income-tax deduction. The court emphasized that contempt proceedings are based on wilful disobedience, which was not evident in this case as the order had been substantially complied with. The court cited legal principles regarding enforcement of orders for payment of money and distinguished between assured payment and calculation-based orders.

The court rejected the argument that the contempt application was justified due to the Income-tax deduction, citing precedents that upheld the authority's obligation to deduct Income-tax at the source. The court highlighted that the petitioners' acceptance of the payment beyond the court's prescribed period weakened their contempt claim. The court also noted that the petitioners' attempt to use contempt as a shortcut to obtain the disputed sum was not a proper approach. Legal judgments were referenced to support the court's decision, emphasizing that belated compliance in contempt cases and strict compliance in salary payment matters are distinct issues.

The court dismissed the contempt application, finding no wilful disobedience by the alleged contemnors. Costs were imposed on the petitioners, emphasizing that the petitioners did not approach the court with clean hands. The court directed the payment of costs to the respondents within a specified period. The judgment highlighted that the original decree was under appeal, suggesting that the petitioners had not fully disclosed relevant facts. The court concluded by discharging the rule and dispensing with the personal presence of the contemnors, providing directions for the distribution of certified copies of the judgment.