TMI Blog1999 (6) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... ximately, respectively. The designated authority turned down the request on the ground that according to the Revenue there was no tax outstanding for these assessment years. The case of the Revenue at that time was, and before me also has been that adjustments were made by the Revenue prior to the coming into operation of the Finance (No. 2) Act of 1998 and thus there being no outstanding, the assessee had nothing to settle up. According to the Revenue large amounts of money were adjusted at several times during the year 1996 and once each in December, 1995, and January 1997. Details of these are given in the petition and there is no dispute in regard to the amounts refundable for the assessment years for which refunds were purportedl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is a concensus of opinion that section 245 is mandatory and without the giving of prior intimations to the assessee, adjustments of refunds cannot be made by the Revenue ; according to Dr. Pal, the authorities lay down that the section is on the same plane as a plain rule of natural justice and that a breach of it renders the action of the Revenue not merely voidable but void ab initio. Indeed from the authorities it does appear that Dr. Pal's submission is right and that there is hardly any contrary judicial opinion in India as on date. Both Dr. Pal and Mr. Mullick, appearing for the Revenue, gave me references to S. L. Ps., from Allahabad decisions, but there being no pronouncement of the Supreme Court, a mere admission or a rej ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... my opinion on that section should be clarified. The wording of the section leaves no manner of doubt that the proposed adjustment is to be intimated to the assessee. Since the adjustment at the time of intimation is only a proposed one, the intimation has to go before the adjustment has been made. If the assessee objects to the proposed adjustment, whether the Revenue can nonetheless make such an adjustment on its unilateral decision, is a point which does not fall for my consideration. But quite clearly the Revenue has no jurisdiction to make an adjustment of a refund without following section 245 and without giving a prior intimation to the assessee as required by that section. Each assessment year for each assessee is generally kept ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he release of the adjusted amounts are not adjudicated upon herein and parties will be at liberty to take future steps and proceedings in that regard. To show the bona fides of the assessee and to show that they genuinely wish to press their legal point about the ineffectiveness of the adjustment of refund and cash money, they paid large sums of money pursuant to interim orders passed by me. These were paid to the designated authority. The payments were made on March 24, 1999 (Rs. 59,17,222) and March 24, 1999 again (Rs. 1,82,16,944). These two payments were made pursuant to the declarations of the assessee filed for the two assessment years. If these payments are accepted as good, which I propose to do, the liability of the assessee fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is getting undone today. Where 5 or 10 crore rupees are involved it is important to proceed in accordance with law and take the steps properly in the interest of all parties concerned. If there are loopholes, advantage is bound to be taken thereof by a party if lie can legally take it. The writ application accordingly succeeds. The interim order already passed will stand confirmed. The provisional certificate, if any issued by the designated authority, on the basis of the payments made, by the assessee shall hereafter be treated as final and permanent. The assessee will be at liberty to take steps for obtaining refund or recovery of the amounts adjusted in the two assessment years ; such steps to be taken in accordance with law and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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