TMI Blog2011 (2) TMI 1232X X X X Extracts X X X X X X X X Extracts X X X X ..... ated:- 7-2-2011 - N. Kumar, Ravi Malimath, JJ. JUDGMENT N. Kumar, J 1. There is a delay of 150 days in preferring this appeal. The application is not opposed. Therefore, accepting the cause shown in the affidavit filed in support of the application for condonation of delay, the delay of 150 days in preferring this appeal is condoned. 2. This is an appeal preferred by the Revenue challenging the order passed by the Tribunal, which affirmed the finding of the CIT(A) who held that no interest is payable by the assessee from the date of refund till ast June, 2003. 3. When s. 234D was introduced into the IT Act, 1961 (for short hereinafter referred to as 'the Act'), the assessment was completed under s. 143(3) for the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this appeal. 4. The substantial question of law that arises for consideration in this appeal is whether the interest payable under s. 234D is payable from the date of refund if the refund is anterior to ast June, 2003 in the event of the assessment order being passed after s. 234D came into force. 5. Prior to introduction of s. 234D, no interest was payable on refund in the event of an order for refund is set aside and the assessee is made to pay the amount of refund, from the date of rectification order or the orders passed by the appellate authorities. 6. In this background, s. 234D came to be inserted by the Finance Act, 2003 w.e.f. ast June, 2003. It reads as under: "(1) Subject to the other provisions of this Act, wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. 8. A careful reading of the aforesaid provision makes it very clear that there is no indication in the language employed in the entire section that the Parliament intended to make this levy of tax on excess refund retrospectively. On the contrary after inserting this provision in the Act, it is specifically stated that it comes into effect from ast June, 2003. Though the amendment is by insertion, the Parliament has expressly stated that the amendment comes into effect from ast June, 2003. The Parliament has made its intention clear and unambiguous. In other words, it is not retrospective. It comes into effect from only ast June, 2003. The liability to pay interest on such a refund arises from the date of refund and not from the dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when a statute levies a tax it does so by inserting a charging section by which a liability is created or fixed and then proceeds to provide the machinery to make the liability effective. It, therefore, provides the machinery for the assessment of the liability already fixed by the charging section, and then provides the mode for the recovery and collection of tax, including penal provisions meant to deal with defaulters. Provision is also made for charging interest on delayed payments, etc. Ordinarily the charging section which fixes the liability is strictly construed but that rule of strict construction is not extended to the machinery provisions which are construed like any other statute. The machinery provisions must, no doubt, be so c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng interest, the Court must give that meaning to it as is conveyed by the language used and the purpose to be achieved. Therefore, any provision made in a statute for charging or levying interest on delayed payment of tax must be construed as a substantive law and not adjectival law. So construed and applying the normal rule of interpretation of statutes, we find, as pointed out by us earlier and by Bhagwati, J. in the Associated Cement Co. 's case (supra) that if the Revenue's contention is accepted it leads to conflicts and creates certain anomalies which could never have been intended by the legislature." 10. Therefore, in the absence of any express words used in the provision making the levy of interest retrospective, it is only pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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