TMI Blog2000 (10) TMI 945X X X X Extracts X X X X X X X X Extracts X X X X ..... been observed: "The reference is kept pending, not for the purpose of this petition, but as a question of general importance is involved. Registry shall issue notice to the members of the Bar to assist this Court for replying the reference. All the cases pending before this Court on this point shall be placed before the Full Bench. List of such cases shall be furnished by the learned counsel for the petitioner/Revenue." The prayer in O.J.C. No. 9087 of 1997 was to grant interest on the amount of refund due to the petitioner in terms of the direction of the apex Court in the order dated March 5, 1989 passed in S.L.P. Nos. 1832-39 of 1989. 2.. Now, let us see what prayers have been made in other writ petitions and what points have been referred to the Full Bench for decision. In O.J.C. No. 4176 of 1996, the petitioner was to get refund of certain amount for the year 1992-93, payment of which was withheld by the Commissioner of Commercial Taxes in exercise of powers under section 14-D of the Orissa Sales Tax Act, 1947 (for short "the Act") till disposal of the second appeal filed by the State. The said order was, however, quashed by this Court in O.J.C. No. 7740 of 1995 filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atter of this writ petition is also the subject-matter of O.J.C. No. 14939 of 1998 and O.J.Cs. Nos. 12085-12087 of 1998 which are to come up before a Full Bench. Let this matter be tagged to the aforesaid cases." In O.J.C. Nos. 12085 and 12087 of 1998, the petitioner has prayed for a declaration that he is entitled to interest on the refundable amount at the rate mentioned in section 12(4-a), i.e., 24 per cent from the date of deposit till the date of refund. A prayer has also been made to quash the second proviso to section 14 and section 14-C of the Act. Both the cases were referred by the division Bench by order dated September 8, 1998 to be heard by the Full Bench along with O.J.C. No. 4176 of 1996. The prayer in O.J.C. No. 14939 of 1998 is to declare that the petitioner is entitled to interest on the refundable amount from the date of deposit till the time as provided under section 14-C of the Act. It has been referred to the Full Bench to decide the point regarding the date from which interest shall be calculated on the refundable amount. In O.J.Cs. Nos. 2185 and 2186 of 2000, the petitioner has prayed for grant of stay of extra demand during the pendency of the secon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enior Advocate, being assisted by the other Advocates appearing for the petitioners, Mr. S.C. Lal, who appeared amicus curiae to assist the Court, and Mr. L. Pangari, Senior Standing Counsel of the Commercial Taxes Department, in course of their elaborate arguments, cited a plethora of decisions. We need not burden this judgment by referring to all of them. We would discuss only those decisions which have a nexus with or bearing on the points involved in the present matters. 5.. Having settled the scope of the dispute in this batch of writ petitions, let us notice the provisions contained in section 14 of the Act, which is quoted below: "14. Refunds.-The Commissioner shall, in the prescribed manner, refund to a dealer applying in this behalf any amount of tax, penalty or interest paid by such dealer in excess of the amount due from him under this Act, either by cash payment or by deduction of such excess from the amount of tax, penalty or interest due in respect of any other period: Provided that no claim to refund of any tax, penalty or interest paid under this Act, shall be allowed unless it is made within twentyfour months from the date on which the order of assessment or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was inserted in the year 1983. After the amendment of the Act by inserting the second proviso to section 14, this Court had the occasion to interpret the said proviso in the case of Oscar v. Sales Tax Officer [1989] 75 STC 252. The dispute in the said case was whether a notice issued under section 12(8) of the Act Here italicised. is covered by the word "reassessment" mentioned in the second proviso to section 14. In para 6 of the judgment, this Court held: "A bare perusal of the second proviso to section 14 of the Act makes it abundantly clear that a claim to refund of any tax paid under the Act shall not be allowed where there is an order for reassessment, until the reassessment is finalised. The language of the second proviso is plain and unambiguous. It conveys the intention of the Legislature in no uncertain terms that an application for refund shall not be allowed in a case where there is an order for reassessment, until the reassessment is finalised. It is well-settled that the words of a statute are ordinarily to be understood in the natural, ordinary, popular and grammatical meaning unless such a construction leads to an absurdity or the context or the object of the st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eassessment' used in the second proviso to section 14. The Legislature has not used the words 'order of reassessment' and it is more clear by the expression used in the second proviso 'until the reassessment is finalised'. It, therefore, clearly stipulates that whenever there is an order for initiation of a reassessment proceeding, until the said proceeding is finalised claim of refund cannot be allowed. Issuance of a notice on the assessee under section 12(8) of the Act cannot but be an order for reassessment and, therefore, during the continuance of such proceeding until the same is finalised, the second proviso to section 14 would apply and claim of refund cannot be allowed. In this view of the matter, there is no infirmity in the order of the assessing officer passed in annexure-4 as well as in the order of the Commissioner passed in annexure-5." 9.. The aforesaid decisions, however, do not throw any light on the challenge made by the present petitioners with regard to legislative competence for enacting the second proviso to section 14 of the Act. The second proviso was inserted with the object, "in order to rationalise and streamline the administration of the sales tax law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in section 220(2) of the Income-tax Act, the apex Court held that no amount is refundable when an order of assessment is set aside and the question of any amount becoming refundable arises when fresh assessment is made and the amount properly chargeable under the Act is ascertained. Dealing with the Allahabad High Court's decision, the apex Court stated: "In Purshottam Dayal Varshney's case [1995] 94 ITR 198: 1974 Tax LR 275, the Allahabad High Court has taken the view that 'if an assessment order is set aside, the notice of demand becomes ineffective and the tax already paid under such a notice of demand becomes refundable. If a fresh assessment is made, the tax determined as a result of the fresh assessment order again becomes due and payable only after a fresh notice of demand is served upon the assessee'. With respect to the learned Judges, we are unable to agree with the said reasoning, which does not notice or take into account the principle of section 237. As stated above, where an assessment is set aside and a fresh assessment is directed to be made, the assessment must be deemed to be still pending, which has to be completed. In such a case, therefore, the question of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14-C of the Act. We also answer the question formulated by us that there is no lack of legislative competence in enacting the second proviso to section 14 of the Act. 14.. It is contended by the learned counsel for the petitioners that in view of the provisions of the Act, as no time-limit has been fixed for completion of the reassessment proceeding, the Revenue is unjustly enriching itself by retaining the refund and utilising the money of the dealer, which is ultimately found refundable after completion of all proceedings arising out of a reassessment proceeding as per the set aside order of the higher authority. In this context, it is submitted by the Revenue that tax liability is not enforceable until quantification is done by completion of reassessment, as held by the Supreme Court in Kedarnath Jute Mfg. Ltd. v. Commissioner of Income-tax (Central), Calcutta [1971] 28 STC 672. Similarly, the liability to refund is not enforceable until quantification is made by completion of reassessment. Therefore, it is submitted that any application made during the pendency of such reassessment proceeding is a nullity in absence of quantification of the demand and in view of the observ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibed. Also the inspecting officers were instructed to examine this register and the reassessment cases in course of their inspection and report cases where there has been any deviation from the aforesaid instruction. But instructions are not being followed meticulously by the officers. As a result of this not only a great deal of harassment is being caused to the dealer and also the State is being deprived of getting legitimate tax due in cases where the reassessment results in demand". It is not out of place to mention that the Sales Tax Officers act on the delegated power of the Commissioner. But, the above circular having not been issued under any statutory provision and the circular having not mentioned what would be fate of the reassessment proceedings if they are not completed within the period mentioned therein, i.e., three months, the said circular is unenforceable. But being a benevolent circular, we hope, the assessing officers would take notice of the same. In cases of violation of the instructions given in the circular, appropriate administrative action should be taken against the erring officers in order to compel enforcement of the circular. 16.. Coming back to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceeding. Therefore, unless we read the whole section and give a literal meaning to the expression "till such time as he deems proper" there will be arbitrary and unbridled power, which cannot be sustained in view of the restriction under articles 14 and 19(1)(g) of the Constitution. Such a power will also be violative of article 265 of the Constitution. It is pertinent to note that similar provision was there in section 241 of the Income-tax Act, 1961 before its substitution by the Direct Tax Laws (Second Amendment) Act, 1989 with effect from April 1, 1989. Section 241 of the Income-tax Act read as follows: "241. Power to withhold refund in certain cases.-Where an order giving rise to a refund is the subject-matter of an appeal or further proceeding where any other proceeding under this Act is pending, and the assessing officer is of the opinion that the grant of refund is likely to adversely affect the Revenue, the assessing officer may, with the previous approval of the Chief Commissioner or Commissioner, withhold the refund till such time as the Chief Commissioner or Commissioner may determine." If we compare section 241 of the Income-tax Act with section 14-D of the Act, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unbridled and the power cannot be exercised at the whim and caprice of the Commissioner. Such power can only be exercised on satisfaction of the condition that the order giving rise to refund is the subject-matter of an appeal or further proceeding and that the refund is likely to adversely affect the Revenue. Therefore, challenge to the constitutional validity of section 14-D has no substance as the power under the said section can be exercised with the ancillary power for levying tax under entry 54 of List II of the Seventh Schedule to the Constitution. 20.. Before parting with the question, we would like to bring on record a division Bench decision of this Court in Tata Sponge Iron Ltd. v. Sales Tax Officer [1998] 110 STC 221. There, the dealer was entitled to certain refund on the basis of the order passed by the assessing officer. The dealer went in appeal on certain other points. At the same time, he also filed an application for refund. It may be stated here that the Revenue had not challenged the order of refund. Refund was, however, refused for which the dealer approached this Court. Considering the facts and circumstances of the case, this Court held that refund co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r annum for the first ninety days and thereafter at the rate of twenty-four per cent per annum, with effect from the date of expiry of the period specified above." 23.. A bare reading of the aforesaid provision would make it clear that once refund is due and the assessee has filed an application, the very moment ninety days period is over, he is entitled to get interest at the rates prescribed therein. In case any appeal or further proceeding is pending, for which the refund has been withheld by the Commissioner on finalisation of the said appeal or further proceeding, the assessee is entitled to get interest on the amount of refund determined in the appeal or further proceeding on the basis of the date of his making the application for refund. Therefore, the action of the Revenue in refusing to grant interest for the period during which power under section 14-D of the Act was exercised is untenable in law. 24.. The Revenue also concedes to the aforesaid position, as is evident from paragraph 14.3 of their written notes, which reads as under: "Since refund is due and is withheld under the section, the assessee is entitled to interest in the event of success in appeal or furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench held (at page 679): "A bare reading of provision makes it clear only in case where order giving rise to a refund is the subject-matter of an 'appeal or further proceeding under the Act', the Commissioner has option to withhold refund if he is of the opinion that grant of refund is likely to adversely affect the Revenue. The expression 'further proceeding' obviously relates to a stage subsequent to appeal. In other words, it encompasses proceedings before the Tribunal or High Court or the apex Court as prescribed in the Act. They cannot certainly be relatable to any other proceeding. In the instant case, admittedly no appeal or a proceeding of a stage subsequent to appeal is pending. Therefore, exercise of power under section 14-D of the Commissioner is unauthorised." We approve the decision in Nikunja Kishore Naik (1993) 75 CLT 677 as laying down the correct law with regard to the power of the Commissioner to withhold refund during the pendency of proceeding under section 12(8) of the Act, as that would not come within the purview of the subject-matter of "appeal or further proceeding". 26.. In view of the above discussion, we conclude that section 14-D of the Act is in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 244.. Interest on refund where no claim is needed.-(1) Where a refund is due to the assessee in pursuance of an order referred to in section 240 and the assessing officer does not grant the refund within a period of three months from the end of the month in which such order is passed, the Central Government shall pay to the assessee simple interest at fifteen per cent per annum on the amount of refund due from the date immediately following the expiry of the period of three months aforesaid to the date on which the refund is granted. (1A) Where the whole or any part of the refund referred to in sub-section (1) is due to the assessee as a result of any amount having been paid by him after the 31st day of March, 1975, in pursuance of any order of assessment or penalty and such amount or any part thereof having been found in appeal or other proceeding under this Act to be in excess of the amount which such assessee is liable to pay as tax or penalty, as the case may be, under this Act, the Central Government shall pay to such assessee simple interest at the rate specified in sub-section (1) on the amount so found to be in excess from the date on which such amount was paid to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of payment of the tax or penalty to the date on which the refund is granted. Explanation.-For the purposes of this clause, 'date of payment of tax or penalty' means the date on and from which the amount of tax or penalty specified in the notice of demand issued under section 156 is paid in excess of such demand. (2) If the proceedings resulting in the refund are delayed for reasons attributable to the assessee, whether wholly or in part, the period of the delay so attributable to him shall be excluded from the period for which interest is payable, and where any question arises as to the period to be excluded, it shall be decided by the Chief Commissioner or Commissioner whose decision thereon shall be final. (3) Where, as a result of an order under sub-section (3) of section 143 or section 144 or section 147 or section 154 or section 155 or section 250 or section 254 or section 260 or section 262 or section 263 or section 264 or an order of the Settlement Commission under sub-section (4) of section 245D, the amount on which interest was payable under sub-section (1) has been increased or reduced, as the case may be, the interest shall be increased or reduced accordingly, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, which is collected but subsequently found refundable, by taking recourse to section 14, requires to be balanced by grant of compensation as the State has enjoyed the benefit of using the money with impugnity. According to the learned counsel for the petitioners, such collection and retention are without the authority of law. We are afraid, we cannot agree with the proposition that in each and every case, when an assessment order is made, or an appeal or reference is decided against the assessee, the same is without the authority of law and as such hit by article 265 of the Constitution. In this connection, we would like to place on record the observations made in Kedarnath Jute Mfg. Co. Ltd. [1971] 28 STC 672 (SC), that when the officers are exercising their powers, the same cannot be held as without the authority of law. Therefore, this submission of the learned counsel for the petitioners is contrary to the ratio laid down in the above case and is not tenable. It is to be noted that where taxes are demanded and if there are some mistakes or errors of fact or law, those are corrected by higher authorities. Till such orders are passed by the higher authorities correcting the mis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd, which ordinarily means 'that which must be paid or is due, or may be paid', but its correct meaning can only be determined if the context in which it is used is kept in view. The word has been frequently understood to mean that which may, can or should be paid and is held equivalent to 'due'. Therefore, the conjoint reading of sections 7(1), (2) and (2A) and 11B of the Act leaves no room for doubt that the expression 'tax payable' in section 11B can only mean the full amount of tax which becomes due under sub-sections (2) and (2A) of the Act when assessed on the basis of the information regarding turnover and taxable turnover furnished or shown in the return. Therefore, so long as the assessee pays the tax which according to him is due on the basis of information supplied in the return filed by him, there would be no default on his part to meet his statutory obligation under section 7 of the Act and, therefore, it would be difficult to hold that the 'tax payable' by him 'is not paid' to visit him with the liability to pay interest under clause (a) of section 11B. It would be a different matter if the return is not approved by the authority but that is not the case here. It is d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of equity, courts have directed to pay interest. In support of this contention, our attention is drawn to Elpro International Ltd. v. Joint Secretary, Govt. of India, Ministry of Finance [1985] 19 ELT 3 (SC), Union of India v. Coromandel Prodorite Ltd. [1991] 52 ELT 165 (Mad.), Indian Cable Company Ltd. v. CEGAT [1992] 57 ELT 22 (Cal), Assistant Collector v. Calcutta Chemical Company Ltd. [1992] 62 ELT 511 (Cal) and Union of India v. Assam Timber [1998] 100 ELT 7 (SC). 35.. In reply, learned Senior Standing Counsel (C.T.) submits that in view of the decision of the apex Court in Mafatlal Industries [1998] 111 STC 467, no interest is payable, as it is not provided in the statute, even while disposing of writ applications. 36.. On the other hand, learned counsel for the petitioner, in support of his contention regarding grant of interest for reasons of equity, relies on the decision of the Supreme Court in K.P. Varghese v. Income-tax Officer, Ernakulam AIR 1981 SC 1922 (at p. 1928), wherein it has been held: "It is now a well-settled rule of construction that where the plain literal interpretation of a statutory provision produces a manifestly absurd and unjust result which cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Bihar and Orissa v. Kripashanker Dayashanker Worah [1971] 81 ITR 763 (SC), Commissioner of Income-tax, West Bengal v. Central India Industries Ltd. [1971] 82 ITR 555 (SC) and Gnanambal (Mrs.), M.P. v. Commissioner of Income-tax [1982] 136 ITR 103 (Mad.). Learned counsel for the petitioners also draws our attention to the decisions of the Supreme Court in Commissioner of Income-tax v. J.H. Gotla [1985] 156 ITR 323 (SC) and Commissioner of Sales Tax v. Auraiya Chamber of Commerce [1986] 62 STC 327 (SC); [1987] 167 ITR 458 (SC) wherein it has been held that though equity and taxation are often strangers, attempts should be made to see that they do not remain always so, and if a construction results in equity rather than in injustice, then such construction should be preferred to the literal constructions. 38.. In reply to these submissions, learned Senior Standing Counsel (C.T.) submits that the provision for interest is a substantive provision. In the case of India Carbon Ltd. v. State of Assam [1997] 106 STC 460, the Supreme Court has held that 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by engrafting on it or introducing in it, under the guise of interpretation, by analogy or implication, something what it thinks to be a general principle of justice and equity. 'To do so' (at p. 65 in Prem Nath L. Ganesh v. Prem Nath L. Ram Nath AIR 1963 Punj 62, per Tek Chand, J.) 'would be entrenching upon the preserves of Legislature', the primary function of a court of law being jus dicere and not jus dare." He further submits that it is the duty of the court to give full effect to the declarations and intents of the Legislature in the scheme and language of a statute. In Parson Tools [1975] 35 STC 413; AIR 1975 SC 1039, the Supreme Court has observed: "We have said enough and we may say it again that where the Legislature clearly declares its intent in the scheme and language of a statute, it is the duty of the court to give full effect to the same without scanning its wisdom or policy, and without engrafting, adding or implying anything which is not congenial to or consistent with such expressed intent of the law giver; more so if the statute is a taxing statute." He also submits that the court must proceed on the assumption that the Legislature did not make a mistak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 41.. Elucidating his point regarding the nature of interest and maintainability of claim to interest on refund under a taxing statute, learned Senior Standing Counsel (C.T.) submits that interest is generally understood as a charge or debt. It is either allowed by law or agreed to between the parties. In the Black's Law Dictionary, interest for use of money has been explained as follows: "Interest is the compensation allowed by law or fixed by the parties for the use or forbearance of borrowed money (Jones v. Kansal Gas and Electric Co. 222 Kar 3390, 565 P.2d 597, 604). Basic cost of borrowing money or buying on instalment contract. Payments a borrower pays a lender for the use of money. Cost of using credit or funds of another. A corporation pays interest on its bonds to the bondholders." "Conventional interest" and "legal interest" have also been explained in the said dictionary thus: Conventional interest: "Interest at the rate agreed upon and fixed by the parties themselves, as distinguished from that which the law would prescribe in the absence of an explicit agreement." Legal interest: "A rate of interest fixed by statute as either the maximum rate of interest p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments are not unauthorised collections. The order of interim payment with condition of interest abrogates the provisions of the Act and the Rules made thereunder. Relying on the decision of the Supreme Court in R.K. Garg v. Union of India AIR 1981 SC 2138, learned Senior Standing Counsel (C.T.) submits that the court must respect the provisions of the statute. In the cases at hand, provision for payment of interest on the refundable amount has been made under section 14-C of the Act, and the court should refrain from granting further interest. In this connection, he also relies on the decision in Mafatlal [1998] 111 STC 467 (SC). He further submits that award of interest in the interim matter of stay is not permissible on equitable grounds or in common law. In this connection, he draws our attention to the decision of the apex Court in Manohar Lal Chopra v. Rai Bahadur Rao Raja Seth Hiralal AIR 1962 SC 527, wherein it has been held: " ..the inherent powers are not in any way controlled by the provisions of the Code as had been specifically stated in section 151 itself. But those powers are not to be exercised when their exercise may be in conflict with what has been expressly pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the inquiry may be decisive. In the later case, it is necessary to see if the statute creates a special right or a liability and provides for the determination of the right or liability and further lays down that all questions about the said right and liability shall be determined by the Tribunals so constituted, and whether remedies normally associated with actions in civil courts are prescribed by the said statute or not. (3) and (4) ..... (5) Where the particular Act contains no machinery for refund of tax collected in excess of constitutional limits or illegally collected, a suit lies. (6) Questions of the correctness of the assessment apart from its constitutionality are for the decision of the authorities and a civil suit does not lie if the orders of the authorities are declared to be final or there is an express prohibition in the particular Act. In either case, the scheme of the particular Act must be examined because it is a relevant enquiry. (7) An exclusion of the jurisdiction of the civil court is not readily to be inferred unless the conditions above set does apply." 45.. The aforesaid propositions in Dhulabhai [1968] 22 STC 416 (SC), were based on tw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase [1958] 9 STC 747 (SC). The decision is also significant for pointing out the adverse impact on public interest inherent in holding [see Kanhaiya Lal case [1958] 9 STC 747 (SC) again] that the plea that the State has expended the taxes on public purposes is no defence to a claim for refund." 46.. Then the apex Court in Mafatlal case [1998] 111 STC 467 referred to the decision in R.S. Joshi, Sales Tax Officer v. Ajit Mills Limited [1977] 40 STC 497 (SC), where constitutionality of section 46 of the Bombay Sales Tax Act was challenged basing on an earlier decision of the Supreme Court in R. Abdul Quader and Co. v. Sales Tax Officer [1964] 15 STC 403 (SC). The challenge was repelled. The following observations of Krishna Iyer, J. made in R.S. Joshi's case [1977] 40 STC 497 (SC) was quoted with approval: "The professed object of the law is clear. The motive of the Legislature is irrelevant to castigate an Act as a colourable device. The interdict on public mischief and the insurance of consumer interests against likely, albeit, unwitting or ex abundanti cautela excesses in the working of a statute are not merely an ancillary power but surely a necessary obligation of a social ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht to be refunded. This circumstance emphasises how the jurisprudence in each country has developed differently. We, on our part, have to evolve appropriate principles to meet the emerging situations, keeping in mind the development of law in our own country, our own circumstances and above all, our own constitutional philosophy. At the same time, we express our broad agreement with the approach and thinking of the majority Judges in Air Canada case (1989) 59 DLR (4th) 161." 48.. In para 59 of the judgment in Mafatlal [1998] 111 STC 467, the apex Court quoted the observations made by the Australian High Court in Commissioner of State Revenue v. Royal Insurance Australia Ltd. (1995) 69 ALJ 51; (182) CLR 51. Rejecting the State's plea that inasmuch as the plaintiff has passed on the burden of illegally collected tax to others, it is not entitled to restitution, the following observations were made: " ..That consequence suggests that, if the economic argument is to be converted into a legal proposition, the proposition must be that the plaintiff's recovery should be limited to compensation for loss or damage sustained. The third is that an inquiry into and a determination of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... do so-so long as section 11-B is constitutionally valid, it has to be followed and given effect to. We can see no reason on which the constitutionality of the said provision-or a similar provision-can be doubted." It was further held: " where a statute creates a special right or a liability and also provides the procedure for the determination of the right or liability by the Tribunals constituted in that behalf and provides further that all questions about the said right and liability shall be determined by the Tribunals so constituted, the resort to civil court is not available-except to the limited extent pointed out therein." 51.. In Mafatlal [1998] 111 STC 467, the apex Court also held that any action taken in accordance with the provisions of the Central Excise Act would be an action taken under the authority of law within the meaning of article 265 of the Constitution. Therefore, any claim for refund of excise duty can be made only under and in accordance with rule 11 or section 11-B, as the case may be, in the forums provided by the Act, and no suit can be filed by invoking the provisions of the Contract Act. As regards the jurisdiction of the High Courts and the Supr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resources of the community' are not confined in public resources but include all resources, natural and man-made, public and private owned is repeatedly affirmed by this Court. (See Ranganatha Reddy [1978] 1 SCR 641, Sanjeev Coke Mfg. Co. v. Bharat Coking Coal [1983] 1 SCR 1000 and State of Tamil Nadu v. L. Abu Kavur Bai [1984] 1 SCR 725). We are of the considered opinion that Sri Parasaran is right in saying that the philosophy and the core values of our Constitution must be kept in mind while understanding and applying the provisions of article 265 of the Constitution of India and section 72 of the Contract Act (containing as it does an equitable principle)-for that matter, in construing any other provision of the Constitution and the laws. Accordingly, we hold that even looked at from a constitutional angle, the right to refund of tax paid under an unconstitutional provision of law is not an absolute or an unconditional right. Similar is the position even if article 265 can be invoked-we have held, it cannot be-for claiming refund of taxes collected by misinterpretation or misapplication of a provision of law, rules, notifications or regulation." 52.. In Mafatlal [1998] 111 ST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of payment provided the assessee has got a decision in his favour. Reference may be made to Kuil Fireworks Industries v. Collector of Central Excise [1997] 95 ELT 3 (SC), wherein the court has granted interest on the amount which has been subsequently found not due from the dealer from the date of deposit till the date of refund. This exercise of power by courts cannot be faulted in view of the rigorous provision contained in the Act. Therefore, considering the facts and circumstances of the case and keeping in mind the decisions cited by the parties, we are of the opinion that when conditional amount is directed to be paid out of a disputed amount, a condition may be imposed awarding interest from the date of such payment till a favourable decision is given to a dealer, i.e., in case such payment or part of it is found refundable. For equitable and justiceable consideration, similar direction should also be given that in case of failure of the dealer in appeal or further proceeding, he would be liable to pay interest on the amount for which stay has been granted by an authority over and above the conditional amount paid by the dealer. We answer the question in the following manner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the grievance of the petitioners that on the amount paid by a dealer, which is ultimately found to be refundable in full or in part, interest is payable cannot be accepted subject to our conclusion in the foregoing paragraph. As has already been held, the court cannot legislate. Therefore, though there is an unprovided field with regard to grant of interest to a dealer, we cannot issue a direction for payment of such interest on the simple analogy of comparison of section 13(6). 57.. In two of the cases, i.e., O.J.Cs. Nos. 2185 and 2186 of 2000, the petitioner has prayed for grant of stay of extra demand of tax during the pendency of the second appeals before the Tribunal. Both the cases have been referred to the Full Bench by order dated March 16, 2000 to lay down the principles for grant of full or part stay or for rejection of stay. 58.. Let us take the case of grant of stay of any disputed demand raised by the State of Orissa. Once the assessee pays the amount, the same shall be retained by the State till the litigation is over. The assessee will be entitled to file an application for refund only when refund will accrue on finalisation of the appeal or further proceeding. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turnover of sale to the registered dealers, which will be in reality 4 per cent if opportunity is given to the dealer to collect the declaration forms. The court or authority may grant stay or conditional stay or refuse to stay depending on these factors. Examples are numerous, with which we do not want to burden this judgment. 59.. We will now deal with some decisions rendered by the apex Court as well as by this Court with regard to grant of stay. In case of Assistant Collector of Central Excise v. Dunlop India Ltd. AIR 1985 SC 330, the dealer claimed that he was entitled to exemption of certain percentage of excise duty, which was disputed by the department. When the matter was moved in a writ application, the High Court granted stay on furnishing bank guarantee. The apex Court deprecated the practice of granting interim stay on furnishing bank guarantee. The Bench consisting of O. Chinnappa Reddy, A.P. Sen and E.S. Venkataramiah, JJ., concluded as follows (at page 334): "All this is not to say that interim orders may never be made against public authorities. There are, of course, cases which demand that interim orders should be made in the interests of justice. Where gross ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is well nigh settled that there is always a presumption in favour of constitutionality of a legislative Act." 62.. In the case of Empire Industries Ltd. v. Union of India [1987] 64 STC 42; [1986] 162 ITR 846; AIR 1986 SC 662, a Bench of the Supreme Court consisting of honourable S. Murtaza Fazal Ali, honourable A. Varadarajan, J., and honourable Sabyasachi Mukharji, J. (as he then was), observed as follows (with honourable Varadarajan, J., resenting): "It is a matter of common knowledge that the interim orders passed by particular courts on certain considerations are not precedents for other cases which may be on similar facts. An argument is being built up now-a-days that once an interim order has been passed by this Court on certain factors specially in fiscal matters, in subsequent matters on more or less similar facts, there should not be a different order passed nor should there be any variation with that kind of interim order passed. It is submitted at the Bar that such variance creates discrimination. This is an unfortunate approach. Every Bench hearing a matter on the facts and circumstances of each case should have the right to grant interim orders on such terms as it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntions of the assessee with regard to the validity of the order of assessment. Certainly no finding can be given in that respect in view of the pendency of the appeal before the Assistant Commissioner, but while examining the question of stay, this Court can, and in our view, must consider the prima facie nature of the case, the balance of convenience, the loss and injury to be suffered by either party if stay is granted in one case and if the stay is refused in the other, and all other germane matters." 65.. The aforesaid ratio was followed in another decision of this Court in Dredging Corporation of India Ltd. v. State of Orissa [1991] 82 STC 235, wherein it has been observed: "While granting or refusing stay, capability of a person who has been saddled with extra demand is a determinative factor. Merely because realisation of demand may be in the public interest, yet a Government of India undertaking which claims to be in financial distress should not be affected in the manner to render its operations unworkable." 66.. The aforesaid discussions would clearly indicate that there is no straitjacket formula for grant of full or conditional stay or for refusal of stay. As has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... escribed for completion of the reassessment proceeding after assessment has been set aside, this Court has no power to specify a period for completion of such proceeding as the High Court has no power like article 142 of the Constitution. (4) The provision contained in section 14-D of the Act empowering the Commissioner to withhold refund is within the legislative competence of the State Legislature. But during the period such refund is withheld, interest is payable to the dealer as provided under section 14-C of the Act. (5) No direction can be given specifying a period during which the refund proceeding should be processed and disposed of. But interest would be payable to the dealer for the delay in granting refund. If the delay is attributable to the negligence and/or inaction of any person, interest shall be recovered from such person. (6) When a dealer is directed to deposit some amount as per the orders of the High Court and the Supreme Court, he is entitled to get compensation by way of interest on the amount of refund ultimately calculated from such date at such rate as is directed by the said Courts. (7) Though there is an unprovided field during which period no in ..... 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