The Kalasa Tea Produce Company Limited, Coimbatore vs The Assistant Commissioner of Agricultural Income-tax, III Circle, Chickmagalur and Another

The petitioner was assessed to tax under Karnataka Agricultural Income-tax Act, for the assessment year 1991-92. The demand of Rs. 7,19,681/- was created on 17-3-1995. This order was challenged before the Appellate Authority and part relief was given on 26-11-1997. The matter was ultimately taken up in revision and the order passed by the Assessing Authority was restored on 16-1-1999. In the meantime, refund of a sum of Rs. 2,39,311/- , because of appeal order was adjusted towards the liability of tax for the year 1994-95. The petitioner was served with the notice under Section 42(1), dated 6-7-1996 by which he was required to make payment of interest of Rs. 2,30,298/-. Notice was also issued to the Banker as well. It is stated that part of the amount has already been collected by the Department from the Banker. Justification in charging interest/penalty of Rs. 2,30,298/- has been raised before me on the ground that the petitioner has refund due in a sum of Rs. 9,35,804/- , starting from the year 1978-79 to 1990-91, which have neither been refunded nor any adjustment is given and on the contrary the petitioners have been subjected to penal interest.

Arguments of both the learned Counsels for the parties have been heard. In the affidavit filed by the Assessing Authority, it has been stated that refund order for the period from 1979-80 to 1984-85 have already been granted on 24-2-1999 and for the remaining period the orders would be passed within 7 days.

It is unfortunate that after the refunds have become due, proper steps were not taken by the respondents in not refunding the amount, which was to be refunded in pursuance of the appeal order. Though the Act has contemplated the payment of interest for delayed payment but efforts should have been made to immediately implement the order of the appeal for refunding the excess amount realised or realising the deficiency. Any delay shows inefficiency of that officer. It may, as has been pointed out that the file may be obtained from other office, but even for that purpose steps have to be taken by the officer and not by the assessee. In normal course on receipt of appeal order, the Assessing Authority should implement that order by refunding the amount or realising the deficiency. For the purpose of refund, the refund order has to be sent by registered post to the assessee, even without calling him. In a case where demands are outstanding for another year, the Assessing Authority are expected to inform by registered post to the assessee that the amount refundable would be adjusted towards the demand, which is outstanding and if no objections is raised within the time permitted in the notice, appropriate order for adjustment would be passed.

None of these procedures have been followed in this case. Now 7 days time is sought to pass appropriate orders. Prayer is granted. The refund along with interest due will be given to the petitioner in accordance with the provisions of the Act. Accordingly, petition is disposed of.