1993 (10) TMI 43 - HC - Income Tax

Summary

Issues:
1. Entitlement to interest on advance tax refund.
2. Interpretation of relevant case law and precedence.

Analysis:
The judgment involves the issue of whether the petitioner-assessee is entitled to interest on the advance tax refund until the date of actual refund. The petitioner had deposited sums for two assessment years, and upon appeal, it was found that the income was nil, entitling the petitioner to a refund. The Commissioner had limited the interest payment period till the date of assessment orders, contrary to the petitioner's claim. The petitioner relied on a Division Bench decision supporting interest payment till the date of refund. The Department argued for a different interpretation based on judgments from other High Courts. However, the judge held that they are bound by the Division Bench decision and must follow it. Therefore, the judge allowed the writ petitions, directing the respondents to pay the due amount to the petitioner with 12% interest per annum until the date of refund.

The second issue involves the interpretation of relevant case law and precedence. The petitioner's counsel cited the Division Bench decision in CIT v. M. L. Sanghi [1988] 170 ITR 670 to support the claim for interest till the date of refund. The Department's counsel referred to judgments from other High Courts supporting a different view. Despite the conflicting views, the judge emphasized being bound by the Division Bench decision of the court. The judge ruled in favor of the petitioner based on the precedent set by the Division Bench, highlighting the importance of following established legal principles and precedence.

In conclusion, the judgment resolves the issue of interest entitlement on advance tax refund by upholding the petitioner's claim based on the Division Bench decision. The judge's decision emphasizes the significance of following established legal precedents, even in the presence of conflicting views from other High Courts. The judgment provides clarity on the entitlement to interest on tax refunds, ensuring consistency and adherence to established legal principles.