Commissioner of Wealth Tax, Karnataka-i, Bangalore vs K.L. Ramachandra (Indi)

M.F. Saldanha, J.-We have heard the learned Counsel who represents the petitioner as also the respondent who are represented through their learned Advocate. The virtual bone of contention that is the common issue involved in these petitions/appeals hinges around the question as to whether the various orders passed by the department for refund of the tax in question is justifiable or not. Mr. Seshachala, learned Counsel who represents the petitioner submitted that apart from the fact that he has raised a question of law on which a reference is competent that it is of some relevance to point out to the Court that it is an issue that arises in several cases recurrently and that therefore it is eminently desirable that the High Court should set the law at rest. Briefly stated, his essential contention was that the Tribunal has rejected the application for making a reference particularly on the ground that this is a pure question of fact and that consequently no specific point of law on which a reference to the High Court is essential has been raised in this case nor does one arise. As against this, what the learned Counsel demonstrates to us is that the provisions of Section 34-A of the Act would certainly be invokable and that the over-simplification which the Tribunal has done by holding that this is a simple case of refund by confirming the view of the authorities below; that in essence this is not a case of self-assessment but that the tax was paid virtually at the direction of the department, are both erroneous. Essentially, what was submitted by him is that the evaluation on the present set of facts of whether at all the assessee was entitled to a refund is a pure point of law and not a question of fact. To that extent, the learned Counsel is reasonably correct and we hasten to clarify that we use the expression ''reasonably'' only because as far as the facts of the present case are concerned, they are very simple and uncomplicated insofar as when the assessee requested for change of his assessment year to end in the month of June, and the permission was granted and he was also directed to file the return and pay the tax. In the multitude of other cases, the facts are not so simple and where the assessment is filed, the view canvassed by the learned Counsel would be perfectly justified. In the present case however that position does not hold good.

Our attention was drawn by the learned Counsel to the decision of the Supreme Court in the case of Commissioner of Income-tax v Chittoor Electric Supply Corporation and Another, (1995)212 ITR 404 (SC), wherein the Supreme Court held that where an assessment order is set aside and a fresh assessment is directed to be made, the assessment must be deemed to be still pending and which is to be still completed. In such a case, the question of any amount being refundable does not arise. Relying on the ratio of this decision, Mr. Seshachala pointed out to us that whereas there is no dispute about the fact that the assessment order came to be set aside but again, he made special mention of the fact that this was really on a supertechnicality, that according to him the question of refund would not arise. We have carefully considered the decision in question and need to distinguish it because in paragraph 11 of the judgment the Supreme Court itself has made it absolutely clear that the law laid down therein would only be applicable in those cases where an assessment order is set aside and a reassessment is ordered. In the present case, the second of these requirements was not present and the respondent''s learned Counsel has repeatedly drawn our attention to this fact and to the consequential legal position because he submitted that even Section 34-A could only be applicable provided the assessment for that year has not reached the stage of finality. Where a reassessment is ordered undoubtedly the assessment process has not ended but is continuing and consequently, the legal position is very different.

In this context, we need to point out that essentially the point on which a reference is sought to the High Court centres around the applicability of Section 15-B which presupposes a self-assessment or in other words a situation where the assessee has voluntarily come forward and filed a return on his own account. Mr. Seshachala submits that a self-assessment would presuppose all situations other than those in which the department through a notice has called upon the assessee to file a return. Admittedly, there is no such notice in this case but the respondent''s learned Advocate has pointed out to us that undisputedly when the permission for change of the assessment period was granted the same letter directs that the return be filed for the entire period of fifteen months and the tax be paid. The assessee did file two returns. There are references in the record to the effect that two sets of tax have been paid. The return was filed with effect from 31-3-1984 and one more return from 30-6-1984. We are really not concerned with the aspect of the quantum or whether one set of tax or more than one set of tax was paid but we refer to only one limited aspect of the case because, since it is a situation where there is a refund order that if the assessee were to be successful then, the department would have to ensure that the whole of the tax is refundable. In the present instance, we find that on facts Section 15-B would not be attracted and if that is so there is nothing to be referred to the High Court. As regards the second submission namely that it is desirable that the High Court should settle the law on the questions that we have referred to above, all that we need to point out is that it is well-settled law that the High Court will not enter into academic discussions or decisions unless and until they are specifically thrown up in a given case. On facts, we do find that the Tribunal was justified in its finding that this is not a case in which any substantial point of law on which a decision of the High Court is necessary, arises. We need to refer in passing to only one more aspect, namely that Mr. Seshachala did point out to us the different dates and his submission was that the assessment was set aside in the year 1990 after the amendment came into operation but on the other hand, the respondent''s learned Counsel brought it to our notice that the Courts have invariably taken the view that it is really the point of time when the return is filed that determines the right of the party to a fair assessment which presupposes or includes a right to refund if the law envisages it, and he further pointed out that in extension of this doctrine, the Courts have also laid down that a right of such a nature if it has accrued cannot be taken away through a subsequent legislative pronouncement that the provision will act retrospectively. We need to make it clear that even in the face of such a situation, the question as to whether right of this type that has accrued can be affected or taken away is debatable. That aspect however does not fall for decision on the present set of facts.

In all these situations we are doubly cautious of the aspect of propriety and we have also appreciated the submissions canvassed by the petitioner''s learned Counsel, that it is very necessary for the Courts to ensure that in situations of sharp practices or in situations which result in loss of revenue to the State must necessarily be foreclosed and that consequently, it is necessary to ensure that the law is interpreted and applied both correctly, progressively and vibrantly. We have borne these principles in mind and have for that reason heard both the learned Counsels on merits virtually threadbare and it is only after having exhausted this exercise that we are of the view that this is one of the few cases in which a reference is not only not competent but would also not be either permissible or necessary.

Having regard to this position, the petition/appeal fails and stands disposed of on merits. There shall be no order as to costs. We need to clarify that the department shall, while giving final effect to the orders carefully verify as to whether there is payment in two sets or whether there was only one single payment as there is some difference of opinion between what was pointed out by the respective Counsels to us.