TMI Blog2023 (10) TMI 334X X X X Extracts X X X X X X X X Extracts X X X X ..... n that the goods so purchased would be used for the purposes of generation of power. The above stand of the Respondents No. 3 to 5 (Revenue) also lead to Respondent No. 1 and 2 (CCL) being declared as an Assessee-in-Default for not having collected TCS in respect of transactions made with various parties where one such party was the Petitioner. That allegation has been quashed by the Ld. ITAT vide its order dated 23.01.2023. While in its Petition the Petitioner had prayed that the illegal sums collected as TCS should be forthwith refunded along with interest recovered in respect thereto as also statutory interest, this Court deemed it appropriate that instead of a refund, issuance of a TCS certificate by Respondents No.1 and 2 (CCL) for the period 2012-2013 to 2017-2018 may in the alternative be an effective relief to the Petitioner. Accordingly, this Court directed Respondents No. 3 to 5 (Revenue) to provide a tangible solution for the issuance of TCS certificates for the period under dispute. In compliance with this Court s directions, Respondents No. 3 to 5 (Revenue) provided the procedure for the issuance of TCS certificates by Respondents No. 1 and 2 (CCL) to the Peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the petitioner for following reliefs:- a. Refund of Rs. 7,86,33,649 which had been illegally realised from the Petitioner in the guise of TCS; b. Payment of interest at the rate of 18% per annum on the amount of Rs. 7,86,33,649, from the date of such monies being realised from the Petitioner till the date of refund; c. In alternative to the Prayers above, issuance of directions to Respondents No. 3 to 5 (Revenue) to deposit the amount of Rs. 7,86,33,649/- along with statutory interest pertaining to TCS in the Permanent Account Number of the Petitioner; d. Declaration that the action of Respondents No. 1 and 2 (CCL) and Respondents No. 3 to 5 (Revenue) in neither granting refund of monies illegally realised from the Petitioner nor facilitating adjustment of such monies towards future tax liability of the Petitioner is illegal, arbitrary and violative of Article 14 and 265. 3. The case of the Petitioner Company is that the Respondents No. 1 and 2 forcefully realised Rs. 7,86,33,649/- from the Petitioner in the guise of Tax Collected as Source (hereinafter to be referred as TCS ) for the period FY 2012-2013 to the First Quarter of FY 2017-2018. 4. Learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was established by the I.T. department that they were engaged in trading of coal which were not put to use in their own manufacturing since their plant was closed since last two years. In respect of the other parties, post survey investigation query letters dated 25th October, 2017 were sent to 20 number of parties. The chart, appearing in the assessment order dated 10th November, 2017 does not disclose the name of the petitioner. As such, the collection of the amount of Rs. 7.86 crores from the petitioner as tax deducted at source was neither backed by the assessment order passed by the Deputy Commissioner of Income Tax (T.D.S. Circle) Ranchi dated 10.11.2017 nor such collection of tax was actually deposited in the coffers of the Central Government. The amount therefore lies illegally retained in the hands of the C.C.L. which it is obliged to refund. Accordingly, upon consideration of the arguments placed by the parties to the lis, this Court recorded as follows: 8. The relevant material details taken note from the pleadings on record hereinabove and consideration of the rival submission of the parties present a situation that Rs. 7.86 Crores has been admittedly collec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 06.12.2022, laid down the procedure for the issuance of TCS certificates by Respondents No. 1 and 2 (CCL) in favour of the Petitioner. However, since the procedure as laid down by Respondents No. 3 to 5 (Revenue) would result in the issuance of TCS certificates by Respondents No. 1 and 2 (CCL) to the limited extent of the monies collected as TCS from the Petitioner, i.e., the principal quantum amounting to Rs. 6,25,58,318.89/-, and would not contain the interest component amounting to Rs. 1,60,75,329.93/-; the Petitioner filed its Rejoinder dated 21.02.2023 whereby it brought on record its grievances in relation to the procedure prescribed by Respondents No. 3 to 5 (Revenue), vide Affidavit dated 06.12.2022, for the issuance of TCS certificates in favour of the Petitioner. The submissions placed by the Petitioner in this regard specially made in Para-10, 11, 12, 14 16 are detailed as under: (i) The Petitioner apprehended that if TCS certificates come to be issued in favour of the Petitioner by Respondents No. 1 and 2 (CCL) by following the procedure laid down by Respondents No. 3 to 5 (Revenue) vide Affidavit dated 06.12.2022, then the benefit of credit of TCS wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1962, had been held to be bad in law. This Court further recorded that the Petitioner flagged three issues which persisted despite the issuance of TCS Certificates in its favour. Para 4 of the order dated 06.04.2023 reads as under: i. Petitioner Assessee is unable to take the benefit of TCS Certificate in respect of the Financial Year 2012-13 till the Financial Year 2016-17 and first quarter of Financial Year 2017-18 in view of the time lapse when it has been issued. The Department has agreed to allow CCL to issue TCS Certificate for the relevant years pursuant to the order of this Court only. Therefore, effect of these TCS certificates for the relevant Financial Years needs to be given effect to by the concerned Assessing Officer, otherwise, it will be of no use. ii. Since the TCS Certificate has been issued after five years of deduction made by the CCL, petitioner is entitled to interest over the amount deducted under section 244A of the Income Tax Act. iii. The interest component on TCS amounting to Rs. 1,60,75,329.93 also deserves to be restituted to the petitioner upon issuance of TCS certificate for the relevant Financial Years. Upon recording the afo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tax Department to M/ s CCL and then it shall be their responsibility to issue refund to the petitioner, M/s ANPRL and others, if any. However, to avail this option, M/s CCL will have to revise its quarterly returns filed before the Income Tax Department so that the amount of Rs.63.15 Cr already claimed/ consumed will again become unclaimed/unconsumed to avoid double payment of refund. 10. Pursuant to the aforesaid Supplementary Affidavit dated 13.06.2023 filed by the Revenue, the petitioner company filed a Reply-Affidavit dated 11.07.2023. Vide the Reply-Affidavit dated 11.07.2023, the Petitioner highlighted that it was not amenable to grant of relief in terms of Option No. 1 since the said solution did not involve the refund of the interest component of Rs. 1,60,75,329.93/-, and that further the said solution was time-consuming and circuitous thereby serving as a mere paper relief. Accordingly, the Petitioner prayed for the grant of relief in terms of Option No. 2 and expressly undertook not utilize the TCS certificates previously issued to it by Respondents No. 1 and 2 (CCL) so as to facilitate the grant of relief. The Petitioner further prayed that the grant of relie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Supreme Court. It was also clarified by the Respondent-CCL that the interest component of Rs. 1,60,75,330/- was not lying with the said Respondents but is lying with Respondents No. 3 to 5 (Revenue). It was further stated that the said Respondents had no objection if this Court directs Respondents No. 3 to 5 (Revenue) to directly refund the interest component to the Petitioner. 12. Considering the various orders passed by this Court and the Supplementary Affidavit 13.06.2023 of Respondents No. 3 to 5 (Revenue), Reply-Affidavit of the Petitioner dated 11.07.2023 and the Rejoinder/Reply dated 04.08.2023 of Respondents No. 1 and 2 (CCL), the following key points emerge: (i) The root cause of the present Lis lies in the illegality committed by the Revenue in compelling Respondent No. 1 and 2 (CCL) in effecting TCS qua the transactions of purchase of coal which according to the Petitioner was genuinely used in generation of power. Such TCS was affected by Respondent No. 1 and 2 (CCL) even though appropriate Form 27C was issued by the Petitioner with a verification that the goods so purchased would be used for the purposes of generation of power. (ii) The above stand of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 to 5 (Revenue) was suggested by them in compliance with a direction of this Court and Respondents No. 3 to 5 (Revenue) is therefore bound by the same. 13. Having heard learned counsel for the parties and after taking cognizance of the statements made in the Supplementary Affidavit dated 13.06.2023 filed by the Respondents No. 3 to 5 (Revenue); we hereby direct that the entire sums of money collected as TCS from the Petitioner along with interest thereon, i.e., Rs. 6,25,58,318.89/- (towards TCS) plus Rs. 1,60,75,329.93/- (towards interest), amounting in toto to Rs. 7,86,33,649/-, be refunded by Respondents 3 to 5 (Revenue) to Respondents No. 1 and 2 (CCL) who should thereafter forthwith refund the same to the Petitioner in a time-bound manner. (a) The Refund by Respondents No. 3 to 5 (Revenue) to Respondents No. 1 and 2 (CCL) referred to above is directed to be affected within six weeks from the date of this order and in turn the Respondents No. 1 and 2 (CCL) shall refund the same to the Petitioner within two weeks thereafter. Should any of the Respondents delay in meeting the aforementioned timelines then statutory interest as per the Act on Refund will be granted in favour ..... X X X X Extracts X X X X X X X X Extracts X X X X
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