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TMI Blog2011 (6) TMI 330X X X X Extracts X X X X X X X X Extracts X X X X ..... at the relevant time for refund u/s 244(1A) for the assessment years 1962-63 to 1977-78 for the period from 21-5-1992 to 23-4-1996 and for assessment years 1978-79 to 1979-80 for the period from 24-5-1993 to 23-4-1996 within two months from today. In default, the amount will carry penal rate of interest at the rate of 18 per cent per annum. - G.A. NO. 1329 OF 2011 - - - Dated:- 17-6-2011 - BHASKAR BHATTACHARYA AND SAMBUDDHA CHAKRABARTI, JJ. For the Appellant. R. Bharadwaj For the Respondent: R.N. Bandopadhya and P. Dhundoria JUDGMENT Bhaskar Bhattacharya, J. This appeal is at the instance of a writ petitioner and is directed against an order dated 10-3-2011 passed by a learned Single Judge of this C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entitled to get further interest on delayed payment of interest in terms of section 244(1A) of the Act. Such demand was turned down by the Income-tax Authority on 19th February, 2002 by specific order which was the subject-matter of challenge in the writ-application out of which the present appeal arises. 7. The learned Single Judge by the order impugned herein held that as under the Income-tax Act there is no provision for payment of interest over interest, the writ-petitioner was not entitled to the relief claimed in the application. 8. Mr. Bhardhwaj, the learned counsel appearing on behalf of the appellant, strongly contended before us that the learned Single judge erred in law in not following the decision of the Supreme Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Supreme Court on interpretation of a statutory provision is binding prospectively. 11. The law on that point is now settled. The following observations of the Supreme Court in the case of M.A. Murthy v. State of Karnataka AIR 2003 SC 3821 will give the answer to the issue : Normally, the decision of this Court enunciating a principle of law is applicable to all cases irrespective its stage of pendency because it is assumed that what is enunciated by the Supreme Court is, in fact, the law from inception. The doctrine of prospective overruling which is a feature of American jurisprudence is an exception to the normal principle of law, was imported and applied for the first time in L.C. Golak Nath v. State of Punjab AIR 1967 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grant of simple interest only? It answered it in the affirmative and in favour of the assessee, relying upon judgments which laid down that interest was payable on the excess amount paid towards Income-tax. 2. The Tribunal, whose decision the High Court affirmed, had relied upon the decision of the Gujarat High Court in the case of D.J. Works v. Dy. CIT which had been followed by the same High Court in Chimanlal S. Patel v. CIT These decisions hold that the Revenue is liable to pay interest on the amount of interest which it should have paid to the assessee but has unjustifiably failed to do. 3. The Revenue has not challenged the correctness of the two decisions of the Gujarat High Court. They must, therefore, be bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay B a certain amount, say 10 years ago, but he offers that amount to him today, then he has pocketed the interest on the principal amount. Had A paid that amount to B 10 years ago, B would have invested that amount somewhere and earned interest thereon, but instead of that A has kept that amount with himself and earned interest on it for this period. Hence equity demands that A should not only pay back the principal amount but also the interest thereon to B. [Emphasis supplied]. 15. Thus, by following the principles of equity, the Supreme Court in the cases of Narendra Doshi (supra) and Sandvik Asia Ltd. (supra), passed the direction for payment of interest on interest. 16. It appears that the learned Single Judge totally overl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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