1998 PLP (Trib (PTD)

The learned A.R. brought our attention to section 102 which says that where a refund is due, the department shall pay an additional sum by way of compensation a 15 % per annum. In subsection (2) of section 102 the term "due" for the purpose of this clause has been defined. The same is as follows:

"Section

102. Additional payment for delayed refunds.

(1) Where a refund due, or deemed under subsection (5) of section 99 to be due, to an assessee is not paid within three months of the date on which it becomes due, there shall be paid to the assessee, a further sum by way of compensation at the rate of fifteen per cent per annum of the amount of refund from the expiration of the said three months up to the date on which the refund order is made. (2) For the purposes of his section, a refund shall be deemed to have become due

(a) in any case where the refund is required to be made in consequence of any order on an appeal or revision or a reference to the High Court or an appeal to the Supreme Court, on the date of receipt of such order by the Deputy Commissioner; (b) in any case to which subsection (5) of section 99 applies, on the thirtieth day of June of the financial year next following the date on which the application for refund was made; and (c) in other cases, on the date which refund order is made." The learned A.R. says that the word 'due' here means refundable after the order of the Supreme Court or its finality below at an early stage. The word due he argued is synonymous to the word payable. If due in the case of department means from the date of the; final order than why in the case of payable, department is considering the original order to be applicable for this purpose, This argument of learned A.R. have some force. However, the legislature has made this provision purposely to avoid the ambiguities. The same exists in section 102 but not in section

89. The same is also not applicable on the impugned situation. The learned L.A. also could not produce before us any reported judgment. He only supported the comments of the Tribunal which we have already mentioned above by saying that the case-law is not relevant and the provisions of section 102 are not directly applicable on the facts and circumstances of the impugned case. Reverting back to the main argument that after set aside the department cannot demand tax as the same becomes non-existent in pursuance of such decision of the concerned authority, we are partially convinced. The provision of section 89 speaks of charging additional tax on non-payment of tax 'levied'. The calculation is to be made from the date the tax was originally "payable". These two words are the key words of the impugned sections. Since the Ordinance has not defined the word 'levy' we shall have to go by the dictionary meanings: Levy means:- V., To assess; raise; execute; exact; tax; collect, gather; take up; seize, (Blacks Law Dictionary 5th Edition). Levy v. levied, levying means the impose and collect by authority or force, as a tax, fine, etc. (Webster Comprehensive English Dictionary). Now if we apply these meanings keeping in view the language of the impugned section the tax was levied by the I.T.O. but set aside by the first appellate authority. The department filed an appeal and learned Tribunal levied it again by confirming the order of the assessing officer, meaning thereby, there was no levy during the intervening period as the department could not ask to pay the assessee any amount during this set aside period. If there is no levy or demand no question of additional tax arises as there being no tax there was no default of non-payment. While giving the above observation we have in our mind the first and the safest principle of interpretation of fiscal statutes i.e., to remain within the language of law and not going beyond the intendments. If we accept the contention of the department we shall be violating the language of section

89. The principle that the literal construction is the only safeguard rule in interpreting a taxing statute is supported by the decisions of Kerala, Bombay, Allahabad and Gujarat High Courts; M.O. Devassia & Co. v. Commissioner of Income-tax (1973) 90 ITR 525 (Ker.), Ballarpur Collieries Co. v. Commissioner of Income-tax (1973) 92 ITR 219 (Bom-Nag), K.T. Wire Products v. Union of India (1973) 92 ITR 459 (All), Commissioner of Income-tax v. Dhanji Shamji (1974) 97 ITR 173) (Guj) and Commissioner of income-tax v. Garden Silk Wvg. Factory (1975) 101 ITR 658 (GUI). "In construing an Act like the Income-tax Act which has an all India application, there would be uniformity of construction as for as possible, as this principle', also compels us to reject the construction submitted by the assessee". Similarly the word 'payable' means capable of being paid, suitable to be paid, admitting or demanding payment, justly due, legally enforceable. A sum or money is said to be payable when a person is under an obligation to pay it. Now while calculating additional tax if we look back we find that because of set aside there was no sum payable during the impugned period. The same, therefore, is to be ignored for calculation purposes. When nothing is payable from 14-8-1992 to 13-9-1995, non-deposit of any amount of tax during the same shall not constitute any default. When there is no default no question of additional tax arises. At this juncture we are reminded of the famous verdict of Mr. Rowlatt, J. which he gave in his land-mark judgment and which has been quoted and followed by the Superior Courts. The same is re-produced as under:

"All the principles of construction of taxing statutes were considered by the Supreme Court in Murarilal Mahabir Prasad v. B.R. Vad (1976, 37 STC 77) and the rule of construction has been laid down succinctly by Chandrachud, J. (as his Lordship then was). The rule stated by Rowlatt, J. in Cape Brandy Syndicate (1921, 1 KB 64) (KB) which had been approved and adopted by the Supreme Court in a number of cases has been accepted as the correct principle which is applicable in interpreting our taxing statutes. The relevant observations in (1976, 37 STC 77) supra are extracted below: In that famous passage marked by a happy turn of phrase, Rowlatt, J., said, there is no equity about a tax. There is no presumption as to a tax' There is no equity about a tax in the sense that a provision by which a tax is imposed has to be construed strictly regardless of the hardship that such a construction may cause either to the treasury or to the taxpayer. If the subject falls squarely within the. letter of law he must be taxed, howsoever, inequitable the consequences may appear to the judicial mind. In the revenue seeking to tax cannot bring the subject within the letter of the law, the subject is free no matter that such a construction may cause serious prejudice to the revenue. In other words, though what is equitable construction may be admissible in relation to other statutes or other provisions of a taxing statute, such a construction is not admissible in the interpretation of a charging or taxing provision of a taxing statute'. " In view of above discussion we hold that the tax levied by I.T.O. because non-existent from 14-8-1992 to 13-9-1995 in consequence to the set aside order of the learned C.I.T.(A). for calculating additional tax this intervening period is, therefore, not to be included. The department is directed to reduce the additional tax for this period from the demand of Rs.789,688 as communicated to the assessee. The assessee appeal, therefore, succeeds accordingly. M.B.A./521/Trib Appeal accepted.