GULBANU RAZACK Vs. COMMISSIONER OF INCOME TAX ASSESSMENT

JUDGEMENT

(1.) THIS writ petition is filed by Smt. Gulbanu Razack for the issue of a writ of mandamus directing the respondent to pay a sum of Rs. 74,498 to the petitioner towards compensatory interest at the rate of per cent. per month on the sum of Rs. 1,00,000 (one lakh) which was refunded to the petitioner by the Income-tax Department. Interest is claimed for the period from September 26, 1986, the date of seizure, up to November 9, 1989, the date of refund.

(2.) FOR the purpose of appreciating the points arising in the case, it is necessary to state the following facts.

(3.) A counter-affidavit has been filed by the Assistant Commissioner of Income-tax. It is contended that the sum of Rs. one lakh cannot be said to have been deliberately seized. It is pointed out that the money seized was deposited in the personal deposit account of the Commissioner of Income-tax and it could be withdrawn only for the purpose of appropriation towards the taxes due upon the completion of the regular assessment. The assessee's request for investment of the amount in National Savings Certificates is not backed by any authority of law. The seizure was made following legal procedure and the refusal to invest or refund the amount cannot be treated as unlawful retention of money. It is further contended that the direction of the Commissioner for refund of Rs. One Lakh does not render the original order passed by the Income-tax Officer either illegal or invalid and, therefore, does not confer any right in favour of the assessee to receive interest. Whenever a claim for refund is made, the claimant does not have the right to immediate refund until the passing of an appropriate order for refund. It was only after the order of the Commissioner passed on October 17, 1989, that the right to receive the money accrued and refund was granted within one month. The present refund is not in the nature of the refunds falling under section 234A or section 234B of the Act. But it is more in the nature of a refund granted under section 243 of the act inasmuch as the Commissioner of Income-tax, acting under section 132(12), is an "appellate authority" in respect of orders passed under section 132(5). It is, therefore, prayed that the writ petition may be dismissed.