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TMI Blog2012 (11) TMI 184X X X X Extracts X X X X X X X X Extracts X X X X ..... er was required to be considered under circular dated 6.8.1998 which was prevailing when the application was filed. Any subsequent change made long thereafter, could not be applied in case of the petitioner - The respondents shall refund sum of Rs. 19,49,400/with simple interest at the rate of 9% for the period after expiry of four months from the date of receipt of the application dated 2.11.1998 till actual payment - in favour of assessee. - SPECIAL CIVIL APPLICATION NO. 11132 OF 2012 - - - Dated:- 23-7-2012 - AKIL KURESHI AND HARSHA DEVANI, JJ. Saurabh N. Soparkar, Bandish Soparkar and Mrs. Swati S. Soparkar for the Appellant. K.M. Parkikh for the Respondent. JUDGMENT Akil Kureshi, J. The petitioner has prayed for quashing a communication dated 18.4.2001 and consequently prayed for refund of an amount of Rs.19,49,400/with interest from 1.6.1998 till actual payment. 2. Brief facts are as follows : 2.1 The petitioner is a company registered under the Companies Act and is regularly assessed to tax. In the year 1998, the petitioner desired to update its computer system and to replace its existing computer system with a new one. For such purpose, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the respondents cannot retain the amount which was deposited under mistake since such deposit cannot partake the character of tax. Such retention of amount would be without authority of law. 3.1 Counsel submitted that under circular dated 6.8.1998, the authorities had to consider the refund claim of the petitioner. He submitted that any subsequent change in the position by virtue of circular dated 20.4.2000, would not justify rejection of the petitioner's refund claim. In this respect counsel relied on decision of the Division Bench of Bombay High Court reported in case of BASF(India) Ltd. v. W. Hasan, CIT [2006] 151 Taxman 31. 3.2 Counsel submitted that the respondents consumed inordinately long time in processing the refund claim of the petitioner. For months together, there was no response from the respondents. Despite reminders, no steps were taken to process the claim. In that view of the matter, even on facts subsequent circular dated 20.4.2000 could not have been applied, since had the respondents decided the refund claim of the petitioner in time, the petitioner would have got the benefit of circular dated 6.8.1998. 4. On the other hand, learned co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor; ( b ) the remittance is duly made to the foreign collaborator, but the contract is cancelled and the foreign collaborator returns the remitted amount to the person responsible for deducting tax at source; ( c ) the tax deducted at source is found to be in excess of tax deductible for any other reason;" Under such circumstances it was provided that : "3. The matter has been considered by the Board. It has been decided that in the type of cases referred to above, a refund may be made independent of the provisions of the Income-tax Act, 1961 to the person responsible for deducting the tax at source from payments to the nonresident, after taking the prior approval of the Chief Commissioner concerned." 7. It is not in dispute that subsequently in the circular no.790 dated 20.4.2000, the third category mentioned in clause(c) of para.(1) of circular dated 6.8.1998 came to be deleted and only two categories mentioned in clause(a) and (b) were retained. In para (9) of the circular dated 20.4.2000, it was clarified that the refund was not to be issued to the deductor of tax in the cases referred to in clause(i)(c) of para.(1) of circular no.769 dated 6.8.1998. 8. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the petitioner paid under pure mistake particularly, when the refund thereof was claimed shortly after the second payment was made and mistake was detected. Contention of the counsel for the respondent that deduction at the time of remittance was not a tax and therefore, not refundable is self contradictory when he also contends that refund of tax is not covered either under circular dated 6.8.1998 or under circular dated 20.4.2000. If the amount deposited with the Government of India was not taxable at all, there was no question of holding on such amount deposited with the Government under mistake. 10. The facts are thus more than sufficiently clear. The petitioner though not required to deposit any tax at the time of making mere provision for payment of technical fees to the foreign company, deducted sum of Rs. 19,49,400/and also deposited with the Government. At the time of subsequent remittance, the petitioner deducted yet again a sum of Rs. 21,82,500/and also deposited with the Government. Such deposit of the amount twice was a mere mistake and the respondents ought to have refunded the original sum of Rs. 19,49,400/to the petitioner on the application being made. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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