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TMI Blog2015 (2) TMI 453X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner - Assessee would be entitled to compensation and the interest can be awarded by way of compensation, but would not be entitled to further compensation by way of interest on such interest, which is awarded as compensation. Respondents are directed to grant compensation by way of interest at the rate of 9% p.a., to the petitioner on the amount refunded for the period from July 1, 1987 to November 13, 1990. - Decided in favour of assessee. - Special Civil Application No. 12855 of 1994 - - - Dated:- 30-1-2015 - Jayant Patel And S. H. Vora,JJ. For the Petitioner : Mr. BN Karia, LD. Advocate For the Respondent : Mr. Manish R. Bhatt, LD. Sr. Advocate JUDGMENT (Per : Honourable Mr. Justice Jayant Patel) 1. As the present matter is directed by the Apex Court to be heard at the earliest, we have taken up the matter and heard the learned Counsel appearing for both the sides for final disposal. 2. We may briefly record that the petitioner has preferred the petition under Article 226 and Article 227 of the Constitution of India for various reliefs, inter alia, for appropriate direction to the respondents to award compensation by way of an interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereinabove. There shall be no orders as to costs. 3. The aforesaid shows that this Court, based on the above referred decision of the Apex Court in the case of Sandvik Asia Limited Vs. Commissioner of Income Tax Others (supra) directed the respondents to grant compensation by way of interest at the rate of 9% p.a., to the petitioner on the amount of refund for the period from July 1, 1987 to November 13, 1990 and further directed to pay interest at the rate of 9% on the amount of interest, meaning thereby simple interest at the rate of 9% p.a., and further interest at the rate of 9% on the amount of simple interest. 4. It appears that the aforesaid decision of the Apex Court was challenged by the Revenue before the Apex Court in the proceedings of SLP(C) No.11406 of 2008. Thereafter, as the leave was granted, it was numbered as Civil Appeal No.3507 of 2014. The Apex Court, in the said SLP/Civil Appeal, vide its decision dated February 26, 2014, considered the decision of the Apex Court in the case of Sandvik Asia Limited Vs. Commissioner of Income Tax Others (supra), which has been subsequently considered by the Larger Bench of the Apex Court in the case of Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Commissioner of Income Tax, Gujarat Vs. Gujarat Fluoro Chemicals (supra) but the Apex Court has reiterated that the interest as provided by the provisions of the statute namely; Income Tax Act should be adhered to. He also submitted that in a case where no interest has been expressly provided by the statute, interest cannot be awarded by way of compensation. 9. Mr.Karia, learned Counsel for the petitioner, in further reply, contended that as per the subsequent decision of the Apex Court in the case of Commissioner of Income Tax, Gujarat Vs. Gujarat Fluoro Chemicals (supra), whenever interest is not provided by the express provisions of the statute, no compensation can be awarded by ordering to pay interest at a particular rate. 10. In order to appreciate the contention, we may consider the above referred both the decisions of the Apex Court. 11. In the case of Sandvik Asia Limited Vs. Commissioner of Income Tax Others (supra), it is true that the matter was pertaining to the payment of advance tax and the Apex Court also found that there was harassment and agony to the Assessee, but on the aspect of compensation to the Assessee, the Apex Court, in the said decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arifications The issue relating to refund of predeposit made during the pendency of appeal was discussed in the Board Meeting. It was decided that since the practice in the Department had all along been to consider such deposits as other than duty, such deposits should be returned in the event the appellant succeeds in appeal or the matter is remanded for fresh adjudication. 2. It would be pertinent to mention that the Revenue had recently filed a Special Leave Petition against Mumbai High Court's order in the matter of NELCO LTD, challenging the grant of interest on delayed refund of predeposit as to whether : (i) the High Court is right in granting interest to the depositor since the law contained in Section 35F of the Act does in no way provide for any type of compensation in the event of an appellant finally succeeding in the appeal, and, (ii) the refunds so claimed are covered under the provisions of Section 11B of the Act and are governed by the parameters applicable to the claim of refund of duty as the amount is deposited under Section 35F of the Central Excise Act, 1944. The Hon'ble Supreme Court vide its order dated 26112001 dismissed the appeal. Even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... propriate disciplinary action will be initiated against the concerned defaulting officers, a direction was also issued to all concerned to note that defaulter will entail a interest liability if such liability accrue by reason of any orders of the Tribunal/Court such orders will have to be complied with and it may be recoverable from the concerned officers. All the Commissioners were advised implementation of these instructions and ensure their implementation through a suitable monitoring mechanism. It is also specifically mentioned that the Commissioners under respective jurisdiction should be advised that similar matters pending in the High Courts must be withdrawn and compliance reported and that the Board has also decided to implement the orders passed by the Tribunal already passed for payment of interest and the interest payable shall be paid forthwith. The facts and the law referred to in paragraph (supra) would clearly go to show that the appellant was undisputably entitled to interest under Sections 214 and 244 of the Act as held by the various High Courts and also of this Court. In the instant case, the appellant's money had been unjustifiably withheld by the Depar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e person damnified may receive equal value for his loss, or be made whole in respect of his injury; the consideration or price of a privilege purchased; some thing given or obtained as an equivalent; the rendering of an equivalent in value or amount; an equivalent given for property taken or for an injury done to another; the giving back an equivalent in either money which is but the measure of value, or in actual value otherwise conferred; a recompense in value; a recompense given for a thing received recompense for the whole injury suffered; remuneration or satisfaction for injury or damage of every description; remuneration for loss of time, necessary expenditures, and for permanent disability if such be the result; remuneration for the injury directly and proximately caused by a breach of contract or duty; remuneration or wages given to an employee or officer. There cannot be any doubt that the award of interest on the refunded amount is as per the statute provisions of law as it then stood and on the peculiar facts and circumstances of each case. When a specific provision has been made under the statute, such provision has to govern the field. Therefore, the Court has to take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the Larger Bench, it was held that the decision in the case of Sandvik Asia Limited Vs. Commissioner of Income Tax Others (supra) cannot be read to mean that Revenue is obliged to pay interest on interest in the event of its failure to refund the interest payable within the statutory period. The Apex Court further held that in the peculiar facts and circumstances of the case of Sandvik Asia Limited Vs. Commissioner of Income Tax Others (supra) the Court had come to the conclusion that there was inordinate delay on the part of the Government to refund certain amount, which includes statutory interest and, therefore, directed the Revenue to pay compensation for the same, but not interest on interest. 15.In our view, as per the above referred observations of the Apex Court in the case of Commissioner of Income Tax, Gujarat Vs. Gujarat Fluoro Chemicals (supra), obligation on the part of the Government to pay compensation for nonpayment of the statutory interest by way of interest on interest was not approved. Further, in the above referred decision of the Larger Bench of the Apex Court at paragraph 7, it was observed that the interest provided under the statute, which may ..... X X X X Extracts X X X X X X X X Extracts X X X X
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