Kolkata Port Trust and Others vs Deputy Director of Income Tax (Exemption) and Others

I.P. Mukerji, J.�This case concerns fringe benefit tax. The total fringe benefit tax paid in advance under section 115WJ of the Income-tax Act, 1961, by the writ petitioner for the assessment year 2006-07 was Rs. 22,12,04,513. Upon registration of the writ petitioner under section 12AA of the Income-tax Act with effect from April 1, 2005, the petitioner ceased to be an assessee for fringe benefit tax with such retrospective effect. According to them, they are entitled to refund of this above sum together with statutory interest.

I have perused the affidavit-in-opposition filed on behalf of the Revenue.

It seems to me that in principle, the Income-tax Department has got no objection to refund the said amount along with interest to the writ petitioner. After all, the writ petitioner is also a statutory body, created by an Act of Parliament.

But the dispute between the parties is with regard to the procedure.

According to Mr. Bandopadhay, learned advocate for the Revenue, refund cannot be made on the basis of the existing application for refund by way of filing a revised return of income forwarded by the Port''s letter dated August 31, 2007. According to the learned counsel, a refund can only be made by the Central Board of Direct Taxes under section 119(2)(b) of the said Act.

On consideration of section 119(2)(b) of the said Act, I am of the opinion that directions of the Board may be given in the case of delayed application for refund. On the submission of Mr. Poddar, learned senior advocate for the petitioner, it does not appear that applications for refund appearing at pages 61 to 88 are time barred. The original application for refund is dated August 31, 2007, followed by reminders. The assessment year was 2006-07. A claim for refund had to be made before March 31, 2008. The application for refund dated August 31, 2007, it seems to me, was well within time.

Now, consider the registration of the writ petitioner under section 12AA with retrospective effect. One would get a situation when at the point of time fringe benefit tax was paid by the writ petitioner, they were not liable'' to pay such tax or to file such return. Therefore, this amount of Rs. 22 crores and odd can be said to be money paid under a mistake by the writ petitioner not under any provision of the Act. If money has been received by the Government on a mistake committed by the assessee it is liable to refund the sum. While making such refund it should not take recourse to unnecessary procedural formalities.

Such seems to be also the view of the Supreme Court in Union of India (UOI) Through Director of Income Tax Vs. Tata Chemicals Ltd., and in Sandvik Asia Ltd. Vs. Commissioner of Income Tax-I, Pune and Others, .

I direct the respondent authorities to treat the application being annexure P6 at page 61 as the application for refund and to process the same in accordance with law so that the refund amount along with accrued interest thereon is paid to the writ petitioner by December 31, 2014, and without in any manner insisting on any unnecessary formalities, on the basis of the above decisions of the Supreme Court and on the observations made in this order.

This writ application is accordingly disposed of. Certified photocopy of this order, if applied for, be supplied to the parties upon compliance with all requisite formalities.