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TMI Blog2021 (2) TMI 971X X X X Extracts X X X X X X X X Extracts X X X X ..... . Section 72 is based on equitable principles. Therefore, by claiming to retain the tax which has been collected without the authority of law, the Government cannot enrich itself and it is liable to make restitution to the person who had made payment under any mistake or under coercion. In the case on hand, the payment with respect to the first two installments were made in accordance with the scheme of 2016. It is the failure on the part of the writ applicant to deposit the amount of the third installment in time that created the trouble for him. The scheme, more particularly, the Clause 191 thereof specifically provides that any amount of tax paid under clause 184 in pursuance of a declaration made under clause 183 shall not be refundable. The case on hand is not one of illegal recovery of tax by the Revenue, or in other words, any tax paid by the assessee under mistake of law. This is a case of default on the part of the writ applicant as an assessee, and the consequences of the default are itself provided under the scheme in the form of Clause 191. Thus, no case is made out by the writ applicant for interference - application dismissed. - R/SPECIAL CIVIL APPLICATION NO. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Time for payment of Tax. 187. (1) The tax and surcharge payable under section 184 and penalty payable under section 185 in respect of the undisclosed income, shall be paid on or before a date to be notified by the Central Government in the Official Gazette. (2) The declarant shall file the proof of payment of tax, surcharge and penalty on or before the date notified under subsection (1), with the Principal Commissioner or the Commissioner, as the case may be, before whom the declaration under section 183 was made. (3) If the declarant fails to pay the tax, surcharge and penalty in respect of the declaration made under section 183 on or before the date specified under sub-section (1), the declaration filed by him shall be deemed never to have been made under this Scheme. 3. Clause 188 of the Scheme provides that the amount of undisclosed income declared in accordance with clause 183 shall not be included in total income of the declarant for any assessment year, if the declarant pays the tax, surcharge and penalty by the date specified under sub-clause (1) of Clause 187. Clause 195 of the said Scheme made certain provisions of the Income Tax Act and the Wealth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2011, 2015 and 2016. The Principal Commissioner of Income Tax thereupon asked the writ applicant to make payment of a sum of ₹ 1,79,46,066/- by way of tax, of ₹ 44,86,517/- by way of surcharge and a equivalent sum of ₹ 44,86,517/- by way of penalty by way of communication dated 13.10.2016. He specified the following dates and percentage of such amounts to be deposited in three installments as under: The declarant is hereby directed to make the payment of sum payable as per column (5) of the above table, as specified below: (I) an amount not less than twenty five percent of the sum payable on or before 30th day of November, 2016 (II) an amount not less than fifty percent of the sum payable as reduced by the amount paid under clause (I) above on or before 31st day of March, 2017. (III) the whole of the sum payable as reduced by the amount paid under clause (I) and (ii) above on or before 30th day of September, 2017. In case of non-payment of the amount as specified above, the declaration under Form-I shall be treated as void and shall be deemed never to have been made. 7. It is undisputed that the writ applicant deposited the amount towards ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thorities as it may deem fit for proper administration of the Act and such authorities would be required to observe and follow such orders and instructions of the Board. Sub-section (2) of section 119 starts with an expression without prejudice to the generality of the forgoing power . Clause (b) thereof provides that the Board may, if it considers it desirable expedient so to do for avoiding genuine hardship in class of cases by general or special order authorize any income-tax authority to admit an application or claim for any exemption, deduction, refund or any other relief under the Act after the expiry of the period specified under the Act for making such application or claim and deal with the same on merits in accordance with law. 9) Under Clause (b) of sub-section (2) of section 119 thus, the Board has ample powers if it considers it desirable or expedient with a view to avoiding genuine hardship in any case to admit an application or claim after the expiry of period specified for such purpose in the Act. This section 119 has been made specifically applicable to the Scheme under section 195 of the Act. 10) While recognizing such powers of the Board we do not mean ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and listed five typical categories of reasons cited for such failure in para 3 as under: 3. As far as remaining declarants are concerned, the reasons for not making timely payments are stated as under:- (a) Personal/emergency reasons (b) Lack of liquidity (c) Confusion about the due date (d) Rush at banks (e) Any other reasons which are attributable to declarants 13. In this context, the Board cited detailed reasons such as sufficient availability of time to come to a conclusion that granting relaxation or extension beyond the due date would not be feasible in case of delays due to circumstances mentioned in para 3. While doing so, the Board still specified as under: 4. However, some instances have been brought to the notice where the declarant effected the full payment within the due date and same was also acknowledged by the bank, but it was intimated later by the bank that fund transfer did not materialize within the prescribed time frame and the money was either returned back to the declarant or credited to Govt. A/c after 5th December, 2016. Such instances clearly refer to the circumstances over which the declarant had absolutely no c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... context of the IDS Scheme can only be applied in very exceptional situation. In the case under consideration the declarant had paid the first and third installment within the due dates. The due date for making second installment under the scheme was 31.09.2017 and the declarant was having six months' time to pay third installment under IDS. From the perusal of submission, it has been ascertained that the declarant was confined to jail from 14.07.2017 and was granted bail on 16.08.2017 with the condition that the declarant should remain present in the court every day at 10:00 A.M. It has been stated that as per the bail condition, he could not move out of Tamilnadu from 14.07.2017 to 03.10.2017. It is to be noted that the declarant was granted bail on 16.08.2017 and he could very well had arranged the funds even though he was away from Ahmedabad. Even before 14.07.2017, when he was not taken into custody between 11.04.2017 to 13.07.2017 he has almost three and half months time to effect payment of the third installment. The claim of the declarant that he could not arrange funds as he was out of Gujarat is not acceptable as the declarant was free to interact with anyone with use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontext with the Income Declaration Scheme, 2016, with which, we are concerned. The other judgments are in context with the Voluntary Disclosure of Income Scheme, 1997. 12. In such circumstances, referred to above, Mr. Vora prays that the respondents be directed to adjust the amount for the relevant assessment year, i.e, the amount already deposited under the Scheme of 2016. 13. On the other hand, this writ application has been vehemently opposed by Mr. M.R. Bhatt, the learned senior counsel appearing for the Revenue. Mr. Bhatt would submit that the claim put forward by the writ applicant as regards adjusting the deposited amount is not tenable in law. Mr. Bhatt first invited the attention of this Court to certain provisions of the Scheme. Clause 187 of the Scheme reads thus; Time for payment of tax. 187.(1) The tax and surcharge payable under section 14 and penalty payable under section 185 in respect of the undisclosed income, shall be paid on or before a date to be notified by the Central Government in the Official Gazette. (2) The declarant shall file the proof of payment of tax, surcharge and penalty on or before the date notified under sub-section (1), w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g for the parties and having gone through the materials on record, the only question that falls for our consideration is whether the writ applicant is entitled to get the amount already deposited by him under the scheme adjusted in any manner so far as his tax liability is concerned. 18. It is settled law that an application under Art. 226 of the Constitution would lie for enforcing the obligation of the State to refund and/or return the money-collected towards an illegal tax or duty. Ever since the decision in the case of Sales Tax Officer v. Kanhaiya Lal, AIR 1959 SC 135, it has been consistently held that the payment towards tax or duty which is without authority of law is a payment made under mistake within the meaning of S. 72 of the Indian Contract Act. Section 72 is based on equitable principles. Therefore, by claiming to retain the tax which has been collected without the authority of law, the Government cannot enrich itself and it is liable to make restitution to the person who had made payment under any mistake or under coercion vide (1) Patel India (Pvt.) Ltd. v. Union of India,; (2) D. Cawasji and Co. v. State of Mysore, (supra): (3) Shri Vallabh Glass Works Ltd. v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esaid matter the issue relates to Scheme VDIS, 1997 in which, it was held that the assessees were not entitled to the benefits of the scheme since the payments made by them were not in terms of the scheme, the revenue authorities were directed to refund or adjust the amounts already deposited by the assessees in purported compliance with the provisions of the scheme to the concerned assessees in accordance with law. He further submitted that similar direction has been made by the Andhra Pradesh High Court in the case of Patchala Seethramaiah v. CIT [1999] 107 Taxman 305/ [2000] 241 ITR 287 as well as Bombay High Court in the case of Sajan Enterprises v. CIT[2006] 151 Taxman 164/282 ITR 636. With the aforesaid, he prays that the impugned order be quashed and respondent be directed to adjust the amount of tax already paid under the Income Declaration Scheme - 2016 against the demand which is outstanding in relation to the pending Assessment Year specifically Assessment Year 2014-15. 8. In the case of Patchala Seethramaiah (supra) the Apex Court has held that when Commissioner declined to grant certificate under Section 67(2) of the Finance Act, 1997 (Voluntary Disclosure o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment Year 2014-15. In the result, the writ petition stands allowed and disposed of, but without any order as to costs. 21. Thus, the High Court directed the Revenue to adjust the amount which had been deposited by the writ applicant in the relevant assessment year. The Revenue, being aggrieved by the order passed by the Madhya Pradesh High Court, went in appeal before the Supreme Court. The Supreme Court declined to interfere and rejected the special leave petition. 22. It appears that the Madhya Pradesh High Court relied upon the decision of the Supreme Court in the case of Hamalatha Gargya (supra). Para-14 of the judgment of the Supreme Court in the case of Hemalatha Gargya (supra) has been quoted by the Madhya Pradesh High Court in Para-11 of its judgment. If we read para-14 of the Supreme Court judgment in the case of Hemalatha, it reveals that the assessees were not entitled to the benefit of the scheme, and the payments made by those assessees under the scheme were found to be not in terms of the scheme. In such circumstances, the Supreme Court directed the Revenue Authorities to refund or adjust the amount already deposited by the assessees. This, according to us, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any circumstances. Necessarily, it would only mean that the expression declaration used in Section 70 should be a declaration as contemplated by Section 66 read with Section 67(1) of the Scheme. When the very Scheme contemplates that a declaration without payment of tax is void and non-est and the declaration filed by the assessee was not acted upon, the question of retention of the tax paid under such declaration will not arise. The Revenue cannot retain any amounts paid under a declaration falling within the mischief of Section 67(2). There is no provision under the Scheme whereby the Revenue can retain the tax so paid in respect of a declaration which is void and non-est. lit the absence of any such authority of law, the retention of tax contrary to the very Scheme is in the teeth of Article 265 of the Constitution of India. Therefore, the provision under Section 70 of the Scheme cannot have any application to a situation where the tax is paid beyond the prescribed period and accordingly, the retention of the said tax by the department is illegal and the petitioner is entitled to refund of the same. 23. The important distinguishing feature in the case of Andhra Pradesh Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hin two months of declaration. 161. Our Government is fully committed to remove black money from the economy. Having given one opportunity for evaded income to be declared once, we would then like to focus all our resources for bringing people with black money to books. In view of the above, it is clear that after making a declaration under the IDS, the petitioner is duty bound to effect timely payment of liability under IDS and therefore, the impugned order is legal and valid. Furthermore, it is pertinent to mention that earlier, under the Voluntary Disclosure Scheme, 1997, the issue of granting general relaxation in prescribed schedule for the payment of taxes was considered by the Hon ble Supreme Court in Appeal (civil) 6266 of 2000 dated 28.11.02 in the case of Hemalatha Gargya vs. Commissioner of Income Tax. The Hon ble Supreme Court, on consideration of relevant provisions of the VDIS Scheme, held that since the VDIS was a beneficial scheme, the declarants seeking to claim the benefit under the statutory scheme are bound to comply strictly with the conditions under which benefit was granted Thus, the Hon ble Court upheld the action of Income-tax Department i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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