CASE NO.: Appeal (civil) 3018 of 1999 PETITIONER: Union of India & Ors. RESPONDENT: M/s Upper Ganges Sugar & Industries Ltd. DATE OF JUDGMENT: 05/01/2005 BENCH: S.N.Variava, Dr. AR. Lakshmanan & S. H. Kapadia JUDGMENT:
J U D G M E N T
S. N. VARIAVA, J.
This Appeal is against the Judgment of the Allahabad High Court
dated 16th January 1998.
Briefly stated the facts are as follows.
On 12th October 1974, the Central Government issued
Notification No. 145 of 1974 granting certain rebates on sugar. On 1st
August 1975, the Respondents submitted a claim for Rs. 27,84,474/-.
The Respondents claimed this amount as a rebate by calculating
excess on excess production for the period 1st December 1974 to 30th
September 1975. The Assistant Collector was of the view that the
rebate could only be claimed on excess of average production.
Therefore, by an Order dated 8th January 1976, he allowed a rebate of
only Rs.12,76,621/-.
The Respondents filed a Writ Petition No.762 of 1981 before the
Allahabad High Court claiming credit for the balance amount of
Rs.15,07,791/-. By an Order dated 7th December 1981, the
Respondents were directed to exhaust the remedy of Appeal as
provided under the statute. The Respondents then filed an Appeal,
which was dismissed on 8th January 1976 by the Collector (Appeals).
The Respondents filed a further Appeal to the Tribunal. The Tribunal
by its Order dated 28th January 1992 held that the rebate was to be
granted on excess of excess production. Thus, the Appeal of the
Respondents was allowed with consequential reliefs, i.e., that they
were to receive a credit in the sum of Rs.15,07,791/- in their PLA
Account. Pursuant to the Order of the Tribunal, the Respondents were
given credit in the above mentioned sum.
On 1st May 1993, the Respondents filed an application before the
Assistant Commissioner claiming interest on the sum of
Rs.15,07,791/- at 18% from 8th January 1976 to 28th January 1992.
They made this claim on the ground that they were entitled to
compensation for the amount not having been paid to them earlier.
This application was rejected by the Assistant Collector on 21st
December 1993. The Collector (Appeals) dismissed the Appeal of the
Respondents by an Order dated 1st August 1994. The Respondents
filed a further Appeal to the Tribunal, which was also rejected on 3rd
May 1997. The Respondents then filed a Writ Petition in the Allahabad
High Court which has been allowed by the impugned Judgment. It has
been held that the Respondents are entitled to interest at the rate of
10%.
This matter, like so many others on our Board for the last few
months, indicates the negligent and callous manner in which the
Revenue is dealing with litigation. In matter after matter, we have
found that relevant documents have not been filed with the paper
books. Even at the time of hearing neither the Advocate-on-Record
nor arguing Counsel have the relevant documents with them. In most
cases it is the other side which supplies the relevant documents. On
being queried by Court, Counsel frankly states that no officer is coming
forward to give any instructions or supply any documents. Even with
the stakes being so high there is apparent callousness and negligence
on the part of the Revenue authorities. It is hoped that this sorry
state of affairs will get remedied and proper instructions given and
documents supplied to the Advocates-on-Record and the arguing
counsel.
In this matter, the question before the Court is whether the
Respondents were entitled to interest on the amount of
Rs.15,07,791/-. Both parties have argued at great length and cited a
number of authorities as to when interest can or cannot be granted.
In our view, for the purposes of this case, it is not necessary to go into
the larger question whether or not interest can be granted for delayed
payments.
In this case, in our view, there are two reasons why interest
could not have been granted. The Respondents have very fairly
handed over to the Court the Appeal filed by them before the Tax
Tribunal and the Order dated 28th January 1992. In the Appeal filed
by them, the Respondents had prayed for interest at the rate of 18%
per annum with effect from 8th January 1976 till payment. As already
noted above, the Tribunal upheld the contention of the Respondents
that they were entitled to credit, but the Tribunal did not grant
interest. Having already made a prayer and the same not having been
granted, it was not open to the Respondents to again make a claim for
interest.
It must be mentioned that when the Respondents again made a
claim for interest, on 1st May 1993, their claim is not rejected on the
ground that the same has not been granted by the Tribunal. It is
merely rejected on the ground that there is no provision under the
Central Excise and Salt Act for payment of interest. Even in the S.L.P.
before this Court there is no ground that interest could not have been
claimed as it had not been granted by the Tribunal. It is only when
Court asked for relevant papers and Respondents fairly handed over to
the Court copies of their Appeal and the Order of the Tribunal that it
was noticed that such a prayer had been made and had not been
granted. Mr. Sudhir Chandra has submitted that Appellants should not
be allowed to take up this contention as there is no such ground in the
SLP. However, in our view this is merely a question of law and thus
cannot be ignored by this Count. As the Tribunal had not granted
interest, Respondents cannot be allowed interest by claiming it again
at a later date.
The second ground on which the Respondents are not entitled to
interest is that this is not a case where the question, whether they
were entitled to the credit of Rs.15,07,791/-, was free from doubt.
This was a question which was bona fide agitated. It is only in 1992
that this question was settled by the Tax Tribunal. This therefore is
not a case where the money had been withheld unjustifiably. Thus
even presuming, in law interest can be granted on grounds of equity
this is not a case where such principles could be applied. If that be
so, then in the absence of any provision in the contract or any
statutory provision, interest could not have been awarded.
For the above reasons, the impugned Judgment cannot be
sustained. It is hereby set aside. The Appeal stands allowed. There
will however be no order as to costs.