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| DATE: | April 23, 2013 (Date of publication) |
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| Click here to download the judgement (vijay_agrawal_refund_harassment_strictures.pdf) |
Non-grant of refunds: Strictures passed against Dept for harassing honest taxpayers
A search was conducted at the premises of the assessee during which cash of Rs. 25 lakhs was seized. The assessee succeeded in the block assessments and the said amount of Rs. 25 lakhs became refundable to the assessee. However, the said amount was not refunded to the assessee on the ground that there were demands outstanding against a third party who was also named in the search warrant. The assessee claimed that he had no relation with the third party and the fact that there were demands outstanding there did not mean that the assessee’s refund could be blocked. The department refused to pass an order on the assessee’s application for refund. HELD by the High Court allowing the plea:
It is but evident that the department has failed to discharge its legal obligation in not refunding the seized amount. The argument of the department that unless a direction is issued, a speaking order shall not be passed on the application for refund of the amount due to him is not appreciated. It shows that the officers of the Income-tax Department are shirking their responsibilities. Speedy and affordable justice is the requirement of the day. But it cannot be achieved until the executive including tax-man discharge their duties faithfully honestly within the four corners of law. The revenue official failed to take any decision right or wrong on the refund application filed by the assessee and passed on the buck on the Court. Time has come for the heads of the departments to keep a strict vigil on such shirkers and to fix their responsibility. While it is no doubt true that collection of revenue is a serious matter for the State -and the bounden duty of the authorities functioning under the Act is to implement the provisions of the Act, there should be safety and assurance to an honest tax-payer. An honest tax-payer should not be subjected to unnecessary harassment and an action not warranted in law, which can be of very serious consequence to the tax-payer if is allowed to remain without correction, such harassment and browbeating of an honest tax-payer will otherwise drive even such honest tax-payers to become cynical and lead to a situation where taxpayers will get a feeling that paying taxes honestly is not a worthwhile exercise; that the tax authorities are a menace to the society rather than simply being representatives of the State for enforcing the tax provisions. The department shall pay costs of Rs. 15,000 to the assessee (Sandik Asia 280 ITR 643 (SC), Gujrat Flouro Chemicals 348 ITR 319 & Raghavendra Sherrigar (2005) 1425 STC 153) followed)
The observations of the court in the instant case, just as in a series of reported cases of the kind , especially in recent times, are, from the viewpoint of the taxpaying community, required to be read and understood in proper light. For such purpose, it is not but imperative to keep focused on the inescapable but glaringly obtaining supervening realities.
The law on income-tax is just one of the many; besides and same way as on any other subject , of every concern to the ‘subjects’ (the people). Lately, the judiciary has, by way of meeting the crying need of the hour, off and on, more often than ever before, been compelled to, without mincing words, pinpoint the ongoing worrisome irregularities, in the implementation and administration of the tax law, strictly both in its letter and spirit. Some of the recently reported cases have brought to surface the alarmingly growing actual factuality that the lower authorities have been acting in blatant disregard of the specific directions, advice, so on, of their own superiors; unwittingly or otherwise, without hardly realising that such a conduct is , besides being a dereliction of duty (ies) , is tantamount to ‘insubordination’ of a grave and serious nature. The recently reported Delhi HC Order on a closely related topic (TDS Woes /Blues) (Ref. HC issued guidelines to end TDS credit & refund adjustment harassment of Assessee by CPU ; also, the article @ Take up TDS problems with deductors, Delhi High Court tells taxmen ) is clarificatory enough.
The detailed Order, it may be noted, bears on its sleeves the unfortunate scenario; the harsh indisputable fact that both the AOs and the in-charges of CPC, not to speak of others to be blamed, have not taken seriously even the court’s ‘dictats’ (in the form of ‘mandamus’) thereby holding themselves out as directly responsible for the varying types of hardships and harassment meted out to the taxpayers; including the salaried class, who by any yardstick, could only be regarded to have invariably been honest ; in comparison, more so than any other category.
As rightly remarked by the court in the instant case, -“Time has come for the heads of the departments to keep a strict vigil on such shirkers and to fix their responsibility”. One is tempted to add that, the quoted words of caution are necessarily to be regarded as primarily addressed to the CBDT, it being the highest empowered executive authority, in control and hence ultimately responsible for a profoundly proper administration and implementation of the law, of which it is a creature, and, as such, answerable to every action or inaction of its subordinates, which is not strictly within the frame work of the law.
One has remained wondering for long, why certain provisions of the Act namely, section 293 and section 280, though pushed to the tail end/ an obscure corner of the enactment, have remained to be even looked at , much less the objective and implications thereof, obvious or hidden, to be explored and invoked as appropriate in a given case. To put it differently, it has been one’s longstanding conviction that , those provisions being very much part and parcel of the Act itself, if construed in the true spirit, do seem to hold the effective but ultimate solution to improving upon the largely prevailing deplorable state of affairs. This is an aspect which might be worth exploring by, not barring the Government / Revenue, by the so called advising tax experts and their aggrieved hapless clientele, alike. The individual viewpoints on this unique vital aspect as brought out in the published article, – (2008) 169 Taxmann (journal) 14-21 (para 2.1), may be of help for a grass root grip of the whole matter.
(Above being one’s own sporadic thoughts/reactions, still shared, are open to be edited by experts having field exposure/hand-on experience!)
On quick look through the last made avilable text of the DTC Bill, one is left with a grave doubt whether the referred (i.e. Ss 293 and 280) and / or other related provisions are covered as adequately as desired /or for the better as would have been expected , to safegaurd/keep protected the taxpayers’ interests /rights against all odds in the CHANGING / CHANGED SCENARIO!
OVER TO EXPERTS !!