GRAPHITE INDIA LTD Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) The present writ petition has been filed by Messrs. Graphite India Limited, a public limited company praying, inter alia, for a writ of mandamus commanding the respondents to cancel and/ or withdraw the order passed by respondent No. 1, Commissioner of Income-tax (Central-II), Calcutta, under Section 264 of the Income-tax Act on August, 1989, and also the order passed by the Income-tax Officer, Central Circle-XXV, Calcutta, to the extent that they refused to pay full interest under Section 214 of the Act as also the refusal of the respondents and/or that in action to pay interest under Section 244 of the Income-tax Act for the assessment year 1982-83 and all proceedings thereunder and in pursuance thereof on the ground that the petitioner is entitled under the law to interest on the amount which is refundable to the petitioner after giving effect to the order of the Commissioner of Income-tax (Appeals) and, as such, in view of the decision of the Hon'ble High Court at Calcutta in the case of Chloride India Ltd., which is already affirmed by the Appeal Court, the petitioner is entitled to interest under Section 214 of the Act on the said amount up to the date when the Income-tax Officer has given effect to the order of the appellate authority by his order dated February 19, 1986, and, as such, the order passed under Section 264 of the Act in so far as it denies interest on the basis and in accordance with the rule laid down in. the case of Chloride India Ltd., is illegal and invalid. It is emphasised that the petitioner is entitled to interest under Section 214 of the Act on Rs. 12,34,227 refunded to the petitioner on March 19, 1984, on the basis of the order of the Commissioner of Income-tax (Appeals) dated January 6, 1984, up to the date when he gave effect to the order of the Commissioner of Income-tax (Appeals) which became refundable in consequence of the aforesaid order of the Commissioner of Income-tax (Appeals) in detail. It is stated that, under Section 214 of the Act read with Section 2(40) thereof, the words "regular assessment" include an assessment which is made to give effect to the appellate order and as such the petitioner is entitled to interest on the balance refund of Rs. 30,43,270 which became refundable in view of the order passed by the Commissioner of Income-tax (Appeals) by virtue of the effect given by the Assessing Officer till the date of the order of assessment and the order passed by respondent No. 1 to the extent he has refused to grant the aforesaid interest under Section 214 is erroneous.

(2.) Dr. Pal, appearing for the writ petitioner, has strongly argued that the ratio of the decision in the case of Chloride India Ltd. v. CIT, Sabyasachi Mukharji J. (as His Lordship then was), clearly held that the obligation under Section 214 of the Income-tax Act is to pay interest on the amount by which the advance tax paid exceeds the tax determined on regular assessment. An order which is made by the Income-tax Officer to give effect to the order of the Appellate Assistant Commissioner is an order of assessment under Section 143. If that is the position, then, in view of. Section 2(40) of the Act, the regular assessment as contemplated by Section 214(1) should be the assessment made by the Income-tax Officer initially or the first assessment made by the Income-tax Officer if there is no appeal therefrom, but in a case where there is an appeal, the order passed by the Income-tax Officer finally to give effect to the direction, if any, of the appellate authority. Having regard to the scheme of the Act and the context in which the expression has been used, "regular assessment" under Section 214 would include in the particular facts and circumstances of the case an assessment made by the Income-tax Officer pursuant to the direction of the Appellate Assistant Commissioner. It is brought to the notice of this court that the Division Bench of this court has also affirmed the said decision and the unreported judgment has also been placed on record.

(3.) Mr. Moitra, the learned advocate appearing for the contesting respondent authorities, has tried to build his argument that although the view of the High Court of Calcutta is clear, there are other contrary views of various other Hon'ble High Courts and it would be better for the petitioner to move the Hon'ble Supreme Court under Article 32 of the Constitution of India to resolve the dispute and to obtain the reliefs.