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2024 (7) TMI 768 - HC - CustomsRefund of amount admittedly due and payable to petitioner - illegal sale of 248 unused diesel engines - HELD THAT - In VINODA B. JAIN VERSUS JT. COMMISSIONER OF INCOME-TAX SPECIAL RANGE 33, MUMBAI ORS. 2023 (9) TMI 760 - BOMBAY HIGH COURT , the Court was dealing with a similar case under the Income Tax Act, 1961 where the Revenue had delayed the release of refund to petitioner. The Court held that an assessee cannot be deprived of its justifiable money. Such an inaction on part of the Revenue is certainly contrary to the provisions of the Act and on general principles petitioner ought to be compensated for such deprivation. Respondents are directed to refund the amount of Rs. 43,65,587/- together with interest thereon @ 8% p.a. from 27th October 2009 till the date of payment and this amount shall be paid on or before 28th July 2024 as against 6% that the Act provides. The difference of 2%, i.e., (8% - 6%), shall be recovered from the officers responsible for not acting on the letter dated 27th October 2009. Petition disposed off.
Issues:
1. Refund of amount due to the petitioner. 2. Delay in refund by the respondents. 3. Legal principles governing the entitlement to compensation for delay in refund. 4. Directions for refund and payment of interest and costs. Issue 1: Refund of Amount Due to the Petitioner The petitioner sought a direction for the respondents to refund a sum of Rs. 43,65,587/-, acknowledged as due and payable. The petitioner alleged that the respondents had unlawfully sold 248 unused diesel engines imported by the petitioner without following the proper procedure. The Central Board of Excise and Customs (CBEC) had instructed the Chief Commissioner of Customs to expedite the refund of the sale proceeds along with interest to the petitioner, which the respondents failed to comply with. Despite the dismissal of Customs Appeal No. 47 of 2007 by the court, the refund was not issued by the respondents. The court, considering the CBEC's directive and the admitted position of the refund being due, directed the respondents to refund the amount. Issue 2: Delay in Refund by the Respondents The court referred to a similar case under the Income Tax Act, where the Revenue delayed the release of a refund to a petitioner. Citing legal precedents, the court emphasized that an assessee cannot be deprived of their justifiable money, and the inaction of the Revenue in such cases is contrary to the provisions of the Act. The court highlighted the need for compensating the petitioner for the deprivation caused by the delay in refund, as observed in previous judgments. The court held that the delay in refund in the present case was unjustifiable and amounted to high-handedness on the part of the Revenue officers. Issue 3: Legal Principles Governing Entitlement to Compensation for Delay in Refund The judgment referred to various legal principles established by the Supreme Court and High Courts regarding compensation for delayed payment of amounts due to an assessee. It was noted that the Revenue must compensate the assessee if excess amounts of tax are collected or wrongfully withheld without legal authority. The court held that the respondents were solely responsible for the gross delay in releasing the petitioner's cash amount and, therefore, directed them to pay compensation for wrongfully withholding the amount from the date of the assessment order. Issue 4: Directions for Refund and Payment of Interest and Costs The court directed the respondents to refund the amount due to the petitioner along with interest at the rate of 8% p.a. from 27th October 2009 until the date of payment. Additionally, the respondents were ordered to pay Rs. 1 lakh as costs to the petitioner. The court specified that the difference in interest rates (8% - 6%) should be recovered from the officers responsible for not acting on the CBEC's directive. The court also instructed the department to credit the amounts to the petitioner's specified bank account and placed the order in the carrier records of the officers responsible for the delay in refund. In conclusion, the judgment addressed the issues of refund, delay in refund, legal principles governing compensation for delay, and provided detailed directions for refund, payment of interest, and costs, emphasizing the importance of timely and justifiable refund processes in accordance with the law.
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