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2024 (5) TMI 540 - JHARKHAND HIGH COURTDefault in not depositing the TDS amount, as deducted, with the government - Default in not making TDS deductions with consequent denial of TDS credit - deductions from the running account bills raised against the supply of materials by respondents and and retained on the pretext of “Income Tax Contingency”- as pleaded that the “kept back” amount shall be released or the TDS certificate will be issued depending on the outcome of the appeal preferred by the JBVNL against the demand notice - writ of mandamus directing the Respondent JBVNL to forthwith issue TDS Certificate for the amount deducted as Income Tax @ 2% from the bills raised by the Petitioner towards supply of materials to the Respondent JBVNL so as to enable the Petitioner to get the tax credit of the said amount under Income Tax laws - HELD THAT:- The demand notice issued to the Respondent/JBVNL that it committed default in not making TDS deductions cannot cloak it with any authority or even an excuse to withhold a certain amount from the running bills of the Contractor. This is quite curious that the respondent/JBVNL seeks to take a stand before the CIT (Appeal) that it was not under an obligation to deduct 2% TDS from the running bills of the Contractor raised towards the supply of materials and, on the other hand, it has retained Rs. 2,90,32,000/- towards payment of 2% TDS deductions on that count. This is also relevant that the deductions by the JBVNL starting from the financial year 2016-17 have accumulated to Rs. 2,90,32,000/- but it did not deposit the said amount with the Income Tax Department. The amount so withheld from the running bills of the petitioner-Firm is speculative and kind of a wagering step by the JBVNL. The JBVNL has no authority in law to withhold Rs. 2,90,32,000/- as “kept back” amount for the purpose of litigation with the Income Tax Department. The action of the JBVNL in withholding Rs. 2,90,32,000/- is therefore held illegal and deprecated; cost must be imposed upon it. Any unjust retention of money or property of another shall be against the fundamental principles of justice, equity and good conscience. The unauthorized deductions from the running bills of the petitioner-Firm are patently illegal. Such deductions caused loses to the petitioner-Firm which filed its Income Tax returns but was deprived of Rs. 2,90,32,000/- and thereby suffered business or alteast interest losses. On the other hand, the JBVNL was unjustly enriched and need to restitute the petitioner-Firm. The refund of Rs. 2,90,32,000/- must therefore carry interest as a matter of course. In “Indian Council for Enviro-Legal Action v. Union of India” [2011 (7) TMI 1109 - SUPREME COURT] held that this is the bounden duty of the Court to neutralize unjust enrichment by imposing compound interest and punitive costs. In response thereof, a supplementary counter-affidavit has been filed stating that in terms of Clauses 10.1 and 10.7 of the General Conditions of Contract whereunder the Contractor is solely and entirely responsible for any taxes including income tax, the JBVNL is empowered to adjust such amount from the price/bills released to the Contractor. The JBVNL has further stated that in case the appeal filed by it fails it shall be required to deposit the entire amount with interest and penalties and then the TDS return shall be filed and certificate i.e. Form-16A for the same shall be generated and issued to the Contractor. In the circumstances of the case, we hold that the stand taken by the JBVNL lacks bona fide; short to saying actuated with oblique motive. The imposition of cost on the party which started litigation without any just cause or took false and frivolous defences is necessary to discourage the dishonest litigant. To this end, the Court is required to impose such cost that would make the litigant think twice before putting up any speculative claim or defence. The petitioner-Firm was unnecessarily dragged to the Court and, that too, knowingly and for no fault on its part. We are of the definite opinion that the JBVNL must be saddled with cost of Rs. 5 Lacs which shall be recovered from the Managing Director.
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