Supreme Court Of India
Union Of India & Anr. vs. British India Corporation Ltd. & Ors.
Sections ART. 226, BPT 12, BPT 13, BPT RULE 4A, ART. 265, 50, Limitation Act, 1963, Sch., art. 137
Mrs. Ruma Pal & B.N. Srikrishna, JJ.
Civil Appeal No. 2333 of 2002
25th March, 2003
Counsel Appeared
B.V. Balram Das & Preetesh Kapur, for the Appellants : M.L. Verma with Kavin Gulati & Harishankar, for the Respondents
ORDER
By the court :
This appeal by the Revenue impugns the judgment of the High Court quashing the orders dt. 30th Jan., 1978 and 8th March, 1983, made respectively by the IAC and the Tribunal, and directing refund of a sum of Rs. 32,85,964 to the respondent-assessee.
The assessee was issued notices by the ITO under s. 11 of the Business Profits Tax Act, 1947 (for short, “the Act”), and called upon to furnish returns thereunder in respect of the chargeable accounting periods ending on 31st Dec., 1946, 31st Dec., 1947, 31st Dec., 1948 and 31st March, 1949. Such returns were filed by the assessee on 31st March, 1949, and provisional assessments under s. 13 of the Act were completed on different dates between 27th Dec., 1948 and 22nd Jan., 1951, by the AO. On 30th Dec., 1969, the regular assessments under s. 12 of the Act were completed in respect of the aforesaid three chargeable accounting periods. The respondentassessee filed appeals before the Income-tax Appellate Tribunal (for short “the Tribunal”) impugning the regular assessment orders on various grounds including the ground that the regular assessment orders were barred by time. The Tribunal accepted the said contention and quashed the regular assessment orders. A reference made to the High Court at the instance of the Revenue failed, the High Court holding in favour of the assessee on this issue.
On 4th Jan., 1978 and 31st Jan., 1978 (even before the High Court had disposed of the references made at the instance of the Revenue), the respondent-assessee by its applications claimed refund of the tax paid by it under the provisional assessment orders. This claim for refund was rejected by the AO who took the view that there was no question of merger of the provisional assessment with the regular assessment and that even if the regular assessment orders were quashed, the provisional assessment order would stand independently. This view was upheld by the CIT(A) as also by an order dt. 8th March, 1983, made by the Tribunal. The assessee impugned the orders of the Tribunal and the IAC by way of a writ petition before the High Court and sought a writ of mandamus to direct the Revenue authorities to refund the amounts which had been paid as a result of the provisional assessment orders. The writ petition was allowed and resulted in the impugned order which is challenged in this appeal.
Learned counsel for the Revenue contended that the very basis on which the regular assessment orders were quashed was that the refund applications, which could have been made by the assessee, had become time-barred. Our attention was invited to the judgment of the Allahabad High Court in CIT vs. British India Corporation (1979) 117 ITR 651 (All), in the assessee’s case itself. The High Court, following the law laid down by this Court in CIT vs. Narsee Nagsee & Co. (1960) 40 ITR 307 (SC), held that although the provisions of the Business Profits Tax Act, 1947, contained no period of limitation within which the regular assessment had to be made under s. 12 of the said Act, such a period of limitation must be read into the provisions of the Act on account of the prescription under r. 4A of the Business Profits Tax Rules which applied s. 50 of the Indian IT Act, 1922, mutatis mutandis to assessments under the Act. Under s. 50 of the said 1922 Act, no claim to any refund of tax under the Act shall be allowed unless made within four years from the last date of the financial year commencing next after the expiry of the accounting period which constitutes or includes the chargeable accounting period in respect of which the claim to such refund arises. In Narsee Nagsee & Co.’s case (supra), it was held by this Court that this modified s. 50 furnishes a key as to when a notice under s. 11(1) of the Act has to be given and that such notice must be given within the financial year which commences next after the expiry of the accounting period or the previous year which by itself includes the chargeable accounting period in question.
It is precisely because the application for refund on the part of the assessee had become time-barred under r. 4A, that the High Court held that the regular assessment under s. 12 of the Act had become time-barred.
Mr. M.L. Verma, learned senior counsel for the respondent-assessee, urged two contentions in reply. In the first place, he urged that the contention that the claim for refund had become time-barred had not been urged by the Revenue authorities at any time. He also urged that a claim for return of the money retained by the Revenue authorities without the authority of law, by reason of Art. 265 of the Constitution does not amount to a claim for refund within the meaning of s. 50 as modified by r. 4A of the Business Profits Tax Rules.
As to the first point, the question of limitation is a mandate to the forum and, irrespective of the fact whether it was raised or not, the forum must consider and apply it, if there is no dispute on facts. Sec. 50 of the 1922 Act, as modified by r. 4A, is a provision of the statute which was required to be applied by the High Court at the time of considering the relief, if any, to be granted in the writ petition. The claim being barred by time, the writ petition could not have been allowed nor could any relief be granted. The first contention, therefore, fails. Turning to the second contention, use of the word “return”, instead of “refund”, does not make any difference to the right, if any, of the assessee. Mr. Verma contends that the right of the assessee to seek a refund became available for the first time when the High Court held in favour of the respondent-assessee and there was no question of making an application for refund or return of the money prior to the date. He, therefore, urges that the provisions of s. 50 of the 1922 Act as modified by r. 4A, cannot strictly be applied in such a case. The respondent must fail even assuming the contention of Mr. Verma, based on Art. 265 of the Constitution to be valid. We are of the view that the money which was paid as provisional tax became returnable on the date on which the right of the Revenue authorities to make a regular assessment under s. 12 came to an end. Assuming that there was a right in the respondent-assessee to reclaim this money, such a right ought to have been exercised within a period of three years under the residuary art. 137 of the Limitation Act, after which even such a right must be held to be barred. There is no doubt that by the time the assessee asserted its so-called right, even this period had expired in respect of the assessment years in question. The contention based on Art. 265 of the Constitution also must, therefore, fail. The contention of the respondent must fail for the principal reason that the respondent’s earlier contention that the regular assessment was barred by time had succeeded. The basis for such success itself was that the respondent’s right to claim refund had become time-barred under s. 50 of the 1922 Act, as modified by r. 4A.
Learned counsel for the respondent urged that though for the purpose of deciding the validity of the regular assessments, the assessee’s right to seek refund may have been considered to be time-barred, when it comes to deciding the validity of the refund claim, we must hold that it is not time-barred. This argument, in our view, is an echo of what the Mimamsakas pejoratively dismissed as “ardha jarateeya nyaya”. (The argument that an egg can be partly used for eating and partly for hatching). Its western counterpart is : to have the cake and eat it. The contention deserves only short shrift.
11. In the result, we allow the appeal and set aside the impugned judgment of the High Court and dismiss the writ petition filed by the respondents. We make it clear that we have not gone into the merits of any other questions canvassed in the matter.
There shall be no order as to costs.
[Citation : 268 ITR 481]
