AI Structured Summary
Not yet generated for this judgment
Judgment
A.S. Anand, C.J.—Writ Petition No. 409 of 1985 was filed by the appellant herein against show cause notice dated 25-7-1984 and the
subsequent communication dated 27-7-1984. A learned Judge of this Court dismissed the writ petition after dealing with the submissions on merits
and noticing that the Department was prepared to withdraw paragraphs 2 and 3 of its letter dated 27-7-1984 subject to certain conditions. The
learned single Judge did not find any reason to interfere with the show cause notice or the communication dated 27-7-1984. The learned single
Judge, however, while dismissing the writ petition vide judgment dated 2-1-1988 dealt with the question of payment of interest and observed as
follows.
Yet another aspect is regarding payment of interest on amount which may become due and payable by petitioner, on the matter being finally
decided. This court considers that, as and when the duty becomes payable, it must be paid. More often than not, the business community resorts
to litigations, being fully conscious that once a matter of this nature gets into Court, it cannot be concluded, unless a decade passes by. It is not
very difficult to take some legal points and delay the finalisation of the matter. Until then they make a very generous offer to pay the rate of duty,
which is the minimum that could be conceived of. Years roll by and the actual duty recoverable multiplies to a phenomenal amount, and by the time
the matter is concluded. When a staggering figure becomes due and payable, the next plea taken is that the entire amount cannot be paid in one
lump sum and that instalment payment spread over to several years must be permitted. It becomes difficult for the Department to recover the
amounts if other steps are taken under Revenue Recovery Act etc. Once again on some grounds or other, such proceedings are also delayed by
institution of petitions in this Court. By this process, in the present stage of economic conditions prevailing in this country, even according to bank
rate, within six years the amount of duty withheld gets doubled. In commercial circles, within three years, they become doubled. So, if a matter is
delayed for 6 or 10 years in a Court, the amount on hand gets tripled, and thereafter, it is only a question of paying the actual amount of duty and
nothing more. Rather, the duty amount which has become payable itself yields double the income to the party, who retains the amount. Whereas
the public chequer gets only the actual duty and no more. Taxes and duties are collected for the benefit of the common. It is his money which ought
to have been recovered by due date. It is the petitioner who moves the Court and delays the recovery, and, therefore, it has to take the
consequences which flow out of the delay. This Court in more than one matter, where refund had not been made on time by the Union of India,
had ordered interest to be paid to petitioners; and therefore, it is but natural that when the recovery is delayed, the Government would be entitled
to claim payment of interest in matters of this nature. It is no answer to state that the Court has taken a long time. Being conscious of the long time
that would be taken by Courts, tax payers move the Court to benefit themselves by avoiding their liability to pay duty or tax on time and hence
they cannot but be made to face the necessary consequences of paying interest on taxes and duties, which had not been paid by due date. Hence,
as and when the proper duty recoverable from the petitioner is determined, it will be liable to pay interest at 18% per annum from the date when
the duty had become actually payable till date of payment.
The dismissal of the writ petition was followed by the condition as contained hereinabove. The learned counsel for the appellant has raised a
short point in this writ appeal and that is that while dismissing the writ petition against a show cause notice and the communication it was not open
to the learned single Judge to have imposed a condition like the one hereinabove noticed, particularly when in the opening part of the observations
the learned single Judge himself has recorded that the interest may become payable on the amount which may become due and payable by the
petitioner on the matter being finally decided. The learned counsel submitted that the learned single Judge could not impose this condition after
dismissing the writ petition, because for all intents and purposes so far as the writ petition is concerned, the dismissal had finally closed the chapter
and the imposition of the condition was unwarranted. We find substantial force in the submission. Whether or not the Revenue would be entitled to
recover any interest when the matter is finally decided is a matter for the Revenue to consider, and while dismissing the writ petition it was not open
to the learned single Judge to have imposed the condition saddling the appellant with the liability to pay interest ""as and when the proper duty
recoverable from the petitioner is determined"" at the rate of 18% p.a. The error committed by the learned single Judge is writ large and
consequently we set aside that condition while otherwise upholding the judgment of the learned single Judge. The writ appeal is, therefore, partially
allowed but without any order as to costs.
It is clarified that this order shall not be construed as any expression of opinion on the merits so far as the liability of the appellant is concerned,
which may ultimately be determined by the Revenue.