Wednesday, December 23, 2009

HC (MUM): Writ, If refund is legitimately due to assessee, mere delay should not defeat claim for refund


Sitaldas K. Motwani


DGIT (Int'l Taxation)

Writ Petition No. 1749 of 2009

December 15, 2009


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15.          The phrase "genuine  hardship" used in Section119(2)(b) should have been construed liberally even when the petitioner has complied with all the conditions mentioned in Circular  dated 12 the October,1993. The Legislature  has conferred the power to condone  delay to enable the authorities to do substantive  justice  to the  parties  by disposing of  the matters  on  merit.  The  expression "genuine " has  received  a  liberal meaning  in  view  of  the  law laid  down  by  the  Apex  Court  referred to  hereinabove  and  while  considering this  aspect, the  authorities  are expected  to  bare  in  mind  that ordinarily  the applicant, applying  for condonation  of  delay  does  not  stand  to  benefit  by lodging  its  claim late.  Refusing  to  condone  delay  can  result  in  a  meritorious matter being  thrown  out  at  the  very  threshold  and  cause  of  justice  being defeated.  As against  this, when  delay  is  condoned  the  highest that can happen is that a cause would be decided on merits after hearing  the parties.  When substantial justice and technical considerations  are  pitted against each other,  cause  of  substantial  justice  deserves  to  be preferred  for  the  other side  cannot  claim  to  have  vested  right  in  injustice  being done  because  of  a non ­deliberate  delay.   There  is  no  presumption  that delay is occasioned  deliberately, or  on account  of  culpable  negligence, or  on  account  of  malafides.  A  litigant  does  not  stand  to  benefit  by  resorting  to  delay.  In  fact  he  runs  a  serious  risk.  The  approach  of  the  authorities  should  be  justice  oriented  so  as  to  advance  cause  of  

justice.  If  refund  is  legitimately  due  to  the  applicant, mere  delay should  not  defeat  the  claim  for  refund.

16.          Whether  the  refund  claim  is  correct  and  genuine, the  authority must satisfy itself that the applicant has a prima facie  correct  and genuine  claim, does  not  mean  that  the  authority  should  examine  the  merits  of the refund  claim  closely  and  come  to  a  conclusion  that  the  applicant's claim is bound  to succeed. This  would  amount  to  prejudging  the  case  on  merits.  All  that  the  authority  has  to  see  is  that  on  the  face  of  it  the  person  applying  for refund  after  condonation  of  delay  has  a  case  which  needs  consideration  and which  is  not  bound  to  fail  by  virtue  of  some  apparent  defect.  At this stage, the authority  is  not  expected  to  go  deep  into  the  niceties  of  law.  While determining  whether  refund  claim  is  correct  and  genuine, the  relevant consideration  is  whether  on  the  evidence  led, it was possible to arrive at the conclusion in  question  and  not  whether  that  was  the  only  conclusion  which could  be  arrived  at  on  that  evidence.   

17.Having  said  so, turning  to  the  facts  of  the  matter  giving  rise  to   the present petition, we are satisfied that respondent No.1  did  not consider the prayer  for condonation of delay in its  proper  perspective.  As such, it needs consideration  afresh.

18.     In  the  result, we set  aside  the  impugned  order  and  remit  the matter  back  to  the  respondent  No.1  for  consideration  afresh, with  the direction to decide the  question  of hardship as well  as  that  of correctness and  genuineness  of  the  refund  claim   in  the  light  of  the observations made hereinabove.  All other rival contentions on merits are kept open. Rule is  made  absolute  in  terms  of  this  order  with  no  order  as to

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