JODHRAJ SINGH Vs. UNION OF INDIA

JUDGEMENT

(1.) THIS petition is directed against the respondents for releasing a sum of Rs. 84,000 which has been deducted towards incometax from the payment made to the petitioner under the Voluntary Retirement Scheme.

(2.) THE petitioner was a permanent employee in Tata Iron and Steel Company at jamshedpur from September 10, 1957. He took voluntary retirement on July 25, 1992, in view of the scheme and his request for voluntary retirement was accepted by respondent No. 3, vide communication dated July 23, 1992. The total amount accruing to the petitioner in respect of the voluntary retirement benefits was Rs. 3,98,336.70 out of which a sum of Rs. 84,000 was deducted as income -tax and the balance amount of Rs. 3,14,336.70 was paid to him. The petitioner claims refund of Rs. 84,000 on the ground that, vide notification dated April 1, 1992, issued by the Government a new clause in section 10 of the Income -tax Act, 1961 (hereinafter referred to as 'the AcV), was incorporated, namely, clause (10Q which provides exemption.from income -tax up to Rs. 5 lakhs payable to an employee as per Voluntary Retirement Scheme. The petitioner, it is contended, is not liable to pay income -tax as the total benefit accruing to him is less than Rs. 5 lakhs. The petitioner represented to the employer, Tata Iron and Steel Company, for refund of the aforesaid amount but since no reply could be received, legal notice dated July 22, 1994, was served on the said respondent. Respondent No. 4 sent a reply to the legal notice wherein the following plea was taken :