COMMISSIONER OF WEALTH TAX Vs. K L RAMACHANDRA

JUDGEMENT

(1.) We have heard the learned counsel who represents the petitioners as also the respondents who are represented through their learned advocate. The virtual bone of contention that is the common issue involved in the petition/appeal hinges around the question as to whether the various orders passed by the Department for refund of the tax in question is justifiable or not. Mr. Seshachala, the learned counsel who represents the petitioners, submitted that apart from the fact that he has raised a question of law on which a reference is competent that it is of some relevance to point out to the Court that it is an issue that arises in several cases recurrently and that, therefore, it is eminently desirable that the High Court should set the law at rest. Briefly stated his essential contention was that the Tribunal has rejected the application for making a reference particularly on the ground that this is a pure question of fact and that consequently no specific point of law on which a reference to the High Court is essential has been raised in this case nor does one arise. As against this, what the learned counsel demonstrates to us is that the provisions of S. 34A of the WT Act, 1957 ('the Act') would certainly be invokable and that the over-simplification which the Tribunal has done by holding that this is a simple case of refund by confirming the view of the authorities below that in essence this is not a case of self-assessment but that the tax was paid virtually at the direction of the Department, are both erroneous. Essentially, what was submitted by him is that the evaluation on the present set of facts of whether at all the assessee was entitled to a refund is a pure point of law and not a question of fact. To that extent, the learned counsel is reasonably correct and we hasten to clarify that we use the expression 'reasonably' only because as far as the facts of the present case are concerned, they are very simple and uncomplicated insofar as when the assessee requested for change of his assessment year to end in the month of June, the permission was granted and he was also directed to file the return and pay the tax. In the multitude of other cases, the facts are not so simple and where the assessment is filed, the view canvassed by the learned counsel would be perfectly justified. In the present case, however, that position does not hold good.

(2.) OUR attention was drawn by the learned counsel to the decision of the Supreme Court in the case of CIT vs. Chittor Electric Supply Corpn. (1995) 123 CTR (SC) 583 : (1995) 212 ITR 404 (SC) : TC 43R.771 wherein the Supreme Court held that where an assessment order is set aside and a fresh assessment is directed to be made, the assessment must be deemed to be still pending and which is to be still completed. In such a case, the question of any amount being refundable does not arise. Relying on the ratio of this decision, Mr. Seshachala pointed out to us that as there is no dispute about the fact that the assessment order came to be set aside but again, he made special mention of the fact that this was really on a supertechnicality, that according to him the question of refund would not arise. We have carefully considered the decision in question and need to distinguish it because in para 11 of the judgment the Supreme Court itself has made it absolutely clear that the law laid down therein would only be applicable in those cases where an assessment order is set aside and a reassessment is ordered. In the present case, the second of these requirements was not present and the respondents' learned counsel has repeatedly drawn our attention to this fact and to the consequential legal position because he submitted that even s. 34A could only be applicable provided the assessment for that year has not reached the stage of finality. Where a reassessment is ordered, undoubtedly the assessment process has not ended but is continuing and consequently, the legal position is very different.

(3.) IN all these situations, we are doubly cautious of the aspect of propriety and we have also appreciated the submissions canvassed by the petitioners' learned counsel, that it is very necessary for the Courts to ensure that in situation of sharp practices or in situations which result in loss of revenue to the State, it must necessarily be foreclosed and that consequently, it is necessary to ensure that the law is interpreted and applied both correctly, progressively and vibrantly. We have borne these principles in mind and have for that reason heard both the learned counsel on merits virtually threadbare and it is only after having exhausted this exercise that we are of the view that this is one of the few cases in which a reference is not only not competent but would also not be either permissible or necessary.