Dwejesh Acharya v. Income Tax Officer, Ward -6(2), Jaipur, Ncrb, C-Shceme,Jaipur Rajasthan

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Writ Petition No. 10210/2022 Dwejesh Acharya S/o Late Kalyan Sharma, Registered Legal HeirOf Late Shri Acharya Hari Sharma S/o Late Kalyan Sharma Sb-164, Mahatma Gandhi Marg, Bapu Nagar, Jaipur, Rajasthan-302015. ----Petitioner Versus 1. Income Tax Officer, Ward -6(2), Jaipur, NCRB, C-Shceme,Jaipur Rajasthan - 302001.Jaipur Rajasthan - 302001. 2. Additional Commissioner Of Income Tax, Range-6, JaipurNCRB, C-Scheme, Jaipur, Rajasthan-302001.NCRB, C-Scheme, Jaipur, Rajasthan-302001. 3. The Principal Chief Commissioner Of Income Tax-Ii, JaipurNCRB, C-Scheme, Jaipur, Rajasthan-302001.NCRB, C-Scheme, Jaipur, Rajasthan-302001. 4. The Chief Commissioner Of Income Tax, Jaipur NCRB, C-Scheme, Jaipur, Rajasthan-302001.Scheme, Jaipur, Rajasthan-302001. 5. Central Board Of Direct Tax, Through Secretary, NewDelhi.Delhi. ----Respondents For Petitioner(s) : Mr.Siddharth Ranka with Mr. S.L.JainMr. Rohan ChatterMs. Apeksha BapnaMr. S.L.JainMr. Rohan ChatterMs. Apeksha BapnaFor Respondent(s): Mr. Sandeep Pathak withMs. Jaya P. Pathak.Ms. Jaya P. Pathak. HON'BLE MR. JUSTICE ARUN BHANSALI HON'BLE MR. JUSTICE ASHUTOSH KUMAR Order 05/12/2023 1.This writ petition has been filed by the petitioner seeking adirection to the respondents for payment of interest on theamount of refund as due against the respondents. 2.Submissions have been made that pursuant to Vivad SeVishwas Act, 2020 (‘VSV Act’) for settlement of disputes, thepetitioner filed an application on 17/6/2020 for the disputerelating to Assessment Year 2013-14 and after making necessarycompliance got the Form No. 3 of the VSV Act on 25/1/2021indicating a refund of Rs.3,47,03,505/-. Whereafter, on filingForm No. 4, the petitioner received Form No. 5 from therespondents under VSV Act on 8/3/2021 indicating that full andfinal settlement has been done in accordance with Form No.3. 3.Pursuant to the Form Nos. 3 & 5 as issued by therespondents under VSV Act, the petitioner made severalrepresentations for issuing refund of Rs.3,47,03,505/-. Aftermaking several requests, the petitioner received/got adjustment against demands for Rs.11,86,641/- on 10/1/2022,Rs.2,59,48,974/- on 30/5/2022, Rs.70,476/- on 22/10/2021 andRs.74,97,414/- on 20/1/2022 totaling Rs.3,47,03,505/-, however,no interest was paid for the delayed payment. 4.Learned counsel for the petitioner made submissions thatthough the entire amount to which the petitioner was entitled on8/3/2021 on issuance of Form No.5 (Annex.9) has been paid tothe petitioner, after making several representations, for the periodthe refund has been kept by the respondents after petitioner’sentitlement, the petitioner is entitled to interest on the saidamount. 5.Submissions have been made that the provisions of Section244A (1) of the Income Tax Act,1961 are applicable and based onthe said provision the petitioner is entitled to interest. 6.Reliance has been placed on Anjul vs. PCIT : WP (C)1985/2022 decided on 23/8/2022 by Delhi High Court and UPSFreight Services India Pvt. Ltd. Vs. Deputy Commissioner ofIncome Act : WP (L) No.10314/2023 decided on 28/8/2023 by theBombay High Court. 7.A reply to the writ petition has been filed inter alia denyingthe entitlement of the petitioner to seek any interest on theamount of refund. 8.Submissions have been made that the provisions of Section244A of Income Tax Act have no application, on the other handExplanation to Section 7 of the VSV Act, 2020 specifically prohibitsgrant of any interest and application of provisions of Section 244Aof the Income Tax Act and, therefore, the petition deservesdismissal. 9.We have considered the submissions made by learnedcounsel for the parties and have perused the material available onrecord. 7.A reply to the writ petition has been filed inter alia denyingthe entitlement of the petitioner to seek any interest on theamount of refund. 8.Submissions have been made that the provisions of Section244A of Income Tax Act have no application, on the other handExplanation to Section 7 of the VSV Act, 2020 specifically prohibitsgrant of any interest and application of provisions of Section 244Aof the Income Tax Act and, therefore, the petition deservesdismissal. 9.We have considered the submissions made by learnedcounsel for the parties and have perused the material available onrecord. 10.A perusal of Form No. 5 (Annex.9) clearly reveals that theorder has been passed by the designated authority under the VSVAct, 2020 and Rules determining the amount of Rs.3,47,03,505/-refundable to the petitioner in accordance with the provisions ofthe Act. Once the order in Form No. 5 has been issued on8/3/2021, the petitioner became entitled for the amount ofrefund. Admittedly, the said amount was refunded to thepetitioner/adjustment towards the demands on 22/10/2021,10/1/2022, 20/1/2022 and 30/5/2022. No reason worth the namehas been indicated in response for the delay in refunding the amount to which the petitioner became entitled on passing oforder in Form No.5 way back on 8/3/2021. 11.The Delhi High Court in the case of Ms. Anjul (supra) whilerelying on one judgment of Hon’ble Supreme Court in Union ofIndia v. Tata Chemicals Limited : (2014) 6 SCC 335 held that theState having received the money without right and havingretained and used it, is bound to make the party good, just as anindividual would do under like circumstances. The obligation torefund money received and retained without right implies andcarries with it the right to interest. 12.Bombay High Court in the case of UPS Freight Services(supra) while following the order in the case of Ms. Anjul (supra)also ordered for payment of interest as per the rate prescribedunder Section 244A of the Income Tax Act in similarcircumstances. 13.So far as the plea raised by learned counsel for therespondents with reference to provisions of Explanation to Section7 of VSV Act, 2020 is concerned, the same has been noticed forrejection only. 14.The provision of Section 7 of VSV Act, 2020 reads as under: “7. Any amount paid in pursuance of adeclaration made under section 4 shall not berefundable under any circumstances. Explanation.- For the removal of doubts, it is herebyclarified that where the declarant had, before filing thedeclaration under sub-section (I) of section 4, paid anyamount under the Income-tax Act in respect of his taxarrear which exceeds the amount payable undersection 3, he shall be entitled to a refund of suchexcess amount, but shall not be entitled to interest onsuch excess amount under section 244A of theIncome-tax Act.” 15.A bare perusal of the Explanation would reveal that theExplanation pertains to payment of any amount under the IncomeTax Act for the period before filing the declaration under sub-section (1) of Section 4 of the VSV Act, 2020 and nothing to dowith the entitlement to interest for the period after issuance ofForm No.5 indicating entitlement of the petitioner to the amountof refund. 16.In view of the above discussion, for the delayed payment,the petitioner is entitled to interest on the refund amount for thedelay beyond the period of 90 days from the date of refund i.e.8/3/2021. 15.A bare perusal of the Explanation would reveal that theExplanation pertains to payment of any amount under the IncomeTax Act for the period before filing the declaration under sub-section (1) of Section 4 of the VSV Act, 2020 and nothing to dowith the entitlement to interest for the period after issuance ofForm No.5 indicating entitlement of the petitioner to the amountof refund. 16.In view of the above discussion, for the delayed payment,the petitioner is entitled to interest on the refund amount for thedelay beyond the period of 90 days from the date of refund i.e.8/3/2021. 17.Consequently, the writ petition is allowed. It is directed thatthe respondents-revenue shall make payment of interest @ 6%p.a. on the delayed refund amount w.e.f. 8/6/2021 i.e. beyond theperiod of 90 days from the date of determination of refundamount on 8/3/2021 till the date of actual/last payment. As thepayment/adjustment has been made on various dates, interestwould be calculated on the balance amount till each respectivedate. The payment of interest be made within 08 weeks from thedate of this order. (ASHUTOSH KUMAR),J(ARUN BHANSALI),J