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Gulabchand Motilal vs Commissioner Of Income-Tax And … on 7 May, 1993

Madhya Pradesh High Court
Gulabchand Motilal vs Commissioner Of Income-Tax And … on 7 May, 1993
Equivalent citations: 1994 205 ITR 62 MP
Author: V Kokje
Bench: V Gyani, V Kokje


JUDGMENT

V.S. Kokje, J.

1. This is a petition by an income-tax assessee against the refusal of the Income-tax Department to refund the amount of tax which became refundable as the effect of the decision of this court. In M. C. C. No. 66 of 1985 (Gulabchand Motilal v. CIT [1988] 174 ITR 117), this court, answering a reference under Section 256(1) of the Income-tax Act, 1961, at the instance of this very petitioner, held that reassessments for the period for the assessment year 1971-72 onwards were barred by limitation, by virtue of Sub-section (2A) of Section 153 of the Income-tax Act, 1961. After the decision in M. C. C. No. 66 of 1985 (Gulabchand Motilal v. CIT [1988] 174 ITR 117 (MP)), the petitioner applied for refund of tax deposited with the Income-tax Department for the assessment years 1971-72 to 1974-75. After a lot of correspondence and the assessee running from pillar to post, ultimately, the Income-tax Officer, Ratlam, on September 19, 1988, wrote to the petitioner informing him that the Department had taken a decision not to refund the amount on the ground that the High Court decision does not direct refund of the tax.

2. A bare reading of the decision of this court in M. C. C. No. 66 of 1985, Gulabchand Motilal v. CIT [1988] 174 ITR 117 (MP), (annexure P-9 of the petition), it is clear that it has been unequivocally held therein that assessments for the years subsequent to the assessment year 1970-71 were barred by limitation. As the court was answering a reference, there was no question of quashing of assessment or directing refund. These are consequential things which have to be taken care of by the Department itself. Even otherwise, when once this court has held that a tax realised by the Department was not on a valid assessment, it amounts to a declaration that it was realised without authority of law. If that is so, the State is bound to refund the amount whether there is any specific direction or not. It is implied and flows as a consequence from the decision of this court that the State would refund all amounts realised from assessees on the basis of assessments which have been held to be time-barred and invalid by this court.

3. The petition is allowed. The respondents are directed to refund to the petitioner the amount of tax deposited by him on the basis of decision in M. C. C. No. 66 of 1985 (Gulabchand Motilal v. CIT [1988] 174 ITR 117 (MP)), decided on August 27, 1987. There shall be no order as to costs.

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