KANTILAL NAHALCHAND Vs. RAO T Y C CIT

JUDGEMENT

(1.) IN this miscellaneous petition the petitioners have raised two principal complaints. The petitioners Nos. 1 to 4 were the partners of petitioner No. 5, Agarwal and Co. The said petitioners are complaining in the first place of certain adjustments made in respect of the EPT refund allowed to the said firm and the grievance is that although the excess EPT was paid by the firm, the refunds have been adjusted amongst the 13 partners which is not warranted by the legal provisions pertaining to refund. The second complaint is that they have not been allowed interest on the excess payment between the periods from 31st March, 1956, to 9th June, 1960.

(2.) THE opposing respondents to this petition are respondents Nos. 1 to 4. In order to understand the grievances of the petitioners and the legal provisions to be applied and considered, a few facts may be stated.

(3.) WE are concerned in this petition with the excess profits tax payable by the firm of Agarwal and Co. for the accounting periods 2nd Nov., 1943, to 17th Oct., 1944, 18th Oct., 1944, to 5th Nov., 1945, and 8th Nov., 1945, to 31st March, 1946. The aggregate amount of excess profit taxes payable by the said firm in respect of the three chargeable accounting periods indicated above came to Rs. 32,23,607 and this amount appears to have been paid by the firm on 31st March, 1956. It would appear that on 8th March, 1960, in appeals preferred by the assessee firm, all the three assessments were set aside by the AAC and thereafter on 9th June, 1960, the concerned EPT Officer made provisional assessments determining the identical amount as had been determined earlier on 9th Dec., 1955, as payable by the assessee firm. It would appear that thereafter there were certain negotiations between the assessee firm or some of the partners thereof and the CBDT. At this juncture we need not go to the history of the negotiations and the correspondence exchanged in connection therewith. It will be sufficient for our purposes to state that on 25th Oct., 1972, it was determined that an aggregate amount of Rs. 15,28,532 was payable as E PT by the said firm for the three chargeable accounting periods. The firm had already paid Rs. 32,23,607 and hence an amount of Rs. 16,95,075 became payable to it as a refund together with interest as provided by the E.P.T. Act. In this miscellaneous petition the pleas pertain to the manner in which the refund is made as also the date from which interest became payable on the said amount. I propose to take up the latter point first for determination as the matter appears to me to be relatively simple and not capable of elaborate discussion. The obligation of the Department to pay interest on the amount of refund is found contained in S. 14A(7) of the E.P.T. Act, 1940. Sec. 14A permits the EPT Officer, before proceeding to make an assessment, that is, the regular assessment under S. 14, to make in a summary manner a provisional assessment, which was done as earlier stated on 9th June, 1960. Rs. 32,23,607 was the aggregate amount of the provisional assessment for the three chargeable accounting periods. When the regular assessment was made in due course, that is, on 25th Oct., 1972, the figure of EPT stood reduced to Rs. 15,28,532. However, as a matter of fact, the assessee firm had effected the payment of this amount much earlier, that is, on 31st March, 1956, but that was under the original assessments made on 9th Dec., 1955 which assessments were set aside on appeal. The short question to be considered is that whether under the provisions for payment of interest contained in S. 14A(7) the assessee is entitled to interest from the date of the actual payment, or interest would run against the Department only from the date of the provisional assessment. Sec. 14A(7) may now be reproduced: