Rajasthan High Court
Dwejesh Acharya S/O Late Kalyan Sharma vs Income Tax Officer ... on 5 December, 2023
Bench: Arun Bhansali, Ashutosh Kumar
[2023:RJ-JP:38071-DB]
HIGH COURT OF JUDICATURE FOR RAJASTHAN
BENCH AT JAIPUR
D.B. Civil Writ Petition No. 10210/2022
Dwejesh Acharya S/o Late Kalyan Sharma, Registered Legal Heir
Of Late Shri Acharya Hari Sharma S/o Late Kalyan Sharma Sb-
164, Mahatma Gandhi Marg, Bapu Nagar, Jaipur, Rajasthan-
302015.
----Petitioner
Versus
1. Income Tax Officer, Ward -6(2), Jaipur, NCRB, C-Shceme,
Jaipur Rajasthan - 302001.
2. Additional Commissioner Of Income Tax, Range-6, Jaipur
NCRB, C-Scheme, Jaipur, Rajasthan-302001.
3. The Principal Chief Commissioner Of Income Tax-Ii, Jaipur
NCRB, C-Scheme, Jaipur, Rajasthan-302001.
4. The Chief Commissioner Of Income Tax, Jaipur NCRB, C-
Scheme, Jaipur, Rajasthan-302001.
5. Central Board Of Direct Tax, Through Secretary, New
Delhi.
----Respondents
For Petitioner(s) : Mr.Siddharth Ranka with
Mr. S.L.Jain
Mr. Rohan Chatter
Ms. Apeksha Bapna
For Respondent(s) : Mr. Sandeep Pathak with
Ms. Jaya P. Pathak.
HON'BLE MR. JUSTICE ARUN BHANSALI
HON'BLE MR. JUSTICE ASHUTOSH KUMAR
Order
05/12/2023
1. This writ petition has been filed by the petitioner seeking a
direction to the respondents for payment of interest on the
amount of refund as due against the respondents.
[2023:RJ-JP:38071-DB] (2 of 5) [CW-10210/2022]
2. Submissions have been made that pursuant to Vivad Se
Vishwas Act, 2020 ('VSV Act') for settlement of disputes, the
petitioner filed an application on 17/6/2020 for the dispute
relating to Assessment Year 2013-14 and after making necessary
compliance got the Form No. 3 of the VSV Act on 25/1/2021
indicating a refund of Rs.3,47,03,505/-. Whereafter, on filing
Form No. 4, the petitioner received Form No. 5 from the
respondents under VSV Act on 8/3/2021 indicating that full and
final settlement has been done in accordance with Form No.3.
3. Pursuant to the Form Nos. 3 & 5 as issued by the
respondents under VSV Act, the petitioner made several
representations for issuing refund of Rs.3,47,03,505/-. After
making several requests, the petitioner received/got adjustment
against demands for Rs.11,86,641/- on 10/1/2022,
Rs.2,59,48,974/- on 30/5/2022, Rs.70,476/- on 22/10/2021 and
Rs.74,97,414/- on 20/1/2022 totaling Rs.3,47,03,505/-, however,
no interest was paid for the delayed payment.
4. Learned counsel for the petitioner made submissions that
though the entire amount to which the petitioner was entitled on
8/3/2021 on issuance of Form No.5 (Annex.9) has been paid to
the petitioner, after making several representations, for the period
the refund has been kept by the respondents after petitioner's
entitlement, the petitioner is entitled to interest on the said
amount.
5. Submissions have been made that the provisions of Section
244A (1) of the Income Tax Act,1961 are applicable and based on
the said provision the petitioner is entitled to interest.
[2023:RJ-JP:38071-DB] (3 of 5) [CW-10210/2022]
6. Reliance has been placed on Anjul vs. PCIT : WP (C)
1985/2022 decided on 23/8/2022 by Delhi High Court and UPS
Freight Services India Pvt. Ltd. Vs. Deputy Commissioner of
Income Act : WP (L) No.10314/2023 decided on 28/8/2023 by the
Bombay High Court.
7. A reply to the writ petition has been filed inter alia denying
the entitlement of the petitioner to seek any interest on the
amount of refund.
8. Submissions have been made that the provisions of Section
244A of Income Tax Act have no application, on the other hand
Explanation to Section 7 of the VSV Act, 2020 specifically prohibits
grant of any interest and application of provisions of Section 244A
of the Income Tax Act and, therefore, the petition deserves
dismissal.
9. We have considered the submissions made by learned
counsel for the parties and have perused the material available on
record.
10. A perusal of Form No. 5 (Annex.9) clearly reveals that the
order has been passed by the designated authority under the VSV
Act, 2020 and Rules determining the amount of Rs.3,47,03,505/-
refundable to the petitioner in accordance with the provisions of
the Act. Once the order in Form No. 5 has been issued on
8/3/2021, the petitioner became entitled for the amount of
refund. Admittedly, the said amount was refunded to the
petitioner/adjustment towards the demands on 22/10/2021,
10/1/2022, 20/1/2022 and 30/5/2022. No reason worth the name
has been indicated in response for the delay in refunding the
[2023:RJ-JP:38071-DB] (4 of 5) [CW-10210/2022]
amount to which the petitioner became entitled on passing of
order in Form No.5 way back on 8/3/2021.
11. The Delhi High Court in the case of Ms. Anjul (supra) while
relying on one judgment of Hon'ble Supreme Court in Union of
India v. Tata Chemicals Limited : (2014) 6 SCC 335 held that the
State having received the money without right and having
retained and used it, is bound to make the party good, just as an
individual would do under like circumstances. The obligation to
refund money received and retained without right implies and
carries with it the right to interest.
12. Bombay High Court in the case of UPS Freight Services
(supra) while following the order in the case of Ms. Anjul (supra)
also ordered for payment of interest as per the rate prescribed
under Section 244A of the Income Tax Act in similar
circumstances.
13. So far as the plea raised by learned counsel for the
respondents with reference to provisions of Explanation to Section
7 of VSV Act, 2020 is concerned, the same has been noticed for
rejection only.
14. The provision of Section 7 of VSV Act, 2020 reads as under:
"7. Any amount paid in pursuance of a
declaration made under section 4 shall not be
refundable under any circumstances.
Explanation.- For the removal of doubts, it is hereby
clarified that where the declarant had, before filing the
declaration under sub-section (I) of section 4, paid any
amount under the Income-tax Act in respect of his tax
arrear which exceeds the amount payable under
section 3, he shall be entitled to a refund of such
excess amount, but shall not be entitled to interest on
such excess amount under section 244A of the
Income-tax Act."
[2023:RJ-JP:38071-DB] (5 of 5) [CW-10210/2022]
15. A bare perusal of the Explanation would reveal that the
Explanation pertains to payment of any amount under the Income
Tax Act for the period before filing the declaration under sub-
section (1) of Section 4 of the VSV Act, 2020 and nothing to do
with the entitlement to interest for the period after issuance of
Form No.5 indicating entitlement of the petitioner to the amount
of refund.
16. In view of the above discussion, for the delayed payment,
the petitioner is entitled to interest on the refund amount for the
delay beyond the period of 90 days from the date of refund i.e.
8/3/2021.
17. Consequently, the writ petition is allowed. It is directed that
the respondents-revenue shall make payment of interest @ 6%
p.a. on the delayed refund amount w.e.f. 8/6/2021 i.e. beyond the
period of 90 days from the date of determination of refund
amount on 8/3/2021 till the date of actual/last payment. As the
payment/adjustment has been made on various dates, interest
would be calculated on the balance amount till each respective
date. The payment of interest be made within 08 weeks from the
date of this order.
(ASHUTOSH KUMAR),J (ARUN BHANSALI),J
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