& Ors Vs. M/S Upper Ganges Sugar & Industries Ltd  Insc 15 (5 January 2005)
Dr. Ar. Lakshmanan & S. H. Kapadia S. N. Variava, J.
Appeal is against the Judgment of the Allahabad High Court dated 16th January 1998.
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/-.
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.
by an Order dated 8th
January 1976, he
allowed a rebate of only Rs.12,76,621/-.
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).
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.
made this claim on the ground that they were entitled to compensation for the
amount not having been paid to them earlier.
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%.
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.
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.
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.
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.
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.
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.
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.
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.