SOCIEDADE DE FOMENTO INDUSTRIAL PVT. LTD., REP. THR. ITS AUT. REP., SITARAM P. BHAT., vs. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-1, MARGAO AND 2 ORS.,

1 MCA No.882/19 in WP No.178/15-04.12.19 IN THE HIGH COURT OF BOMBAY AT GOA MISC.CIVIL APPLICATION NO. 882 OF 2019 IN WRIT PETITION NO. 178 OF 2015 SOCIEDADE DE FOMENTO INDUSTRIAL PVT. LTD., ... Applicant Versus THE ASSISTANT COMMISSIONER OF INCOME-TAX AND ORS., ... Respondents Mr. N. Thakkar, Mr. P. Rao and Ms. J. Amalsadvala, Advocates for the Applicant. Ms. S. Linhares, Advocate for Respondents No.1 and 2. Coram:- M.S. SONAK & C. V. BHADANG, JJ. Date:- 4 th December, 2019 P.C.: Heard learned counsel for the parties. 2. By this civil application, the applicants seek the following reliefs: a) This Honourable Court be pleased to direct the release of the Bank Guarantee of a sum of `105,95,04,390/- furnished pursuant to order dated 08.05.2015 read with order dated 14.02.2019, by modifying the said orders. 2 MCA No.882/19 in WP No.178/15-04.12.19 b) Pass such other and further Orders, as this Honourable Court deems fit and proper. 3. The bank guarantee of which the applicants seek release was furnished in terms of our order dated 08.05.2015, which reads as follows: “Rule. Returnable forthwith. 2. Mrs. Asha Desai, learned counsel for the Respondent/Revenue waives service. 3. At the request of the learned counsel the petition is taken up for final disposal. 4. All these three petitions assail three orders dated 19/12/2014 issued under Section 281B of the Income Tax Act, 1961. The first of the three impugned orders dated 19/12/2014 seeks to attach a refund of Rs.29,01,56,762/- due to the petitioner for the Assessment year 2007-2008. The second of these impugned order dated 19/12/2014 seeks to attach a refund of Rs.51,30,88,859/- due to the petitioner for the year 2008-09 and the third of the impugned order dated 19/12/2014 seeks to attach refund of Rs.25,62,58,769 due to the petitioner for the Assessment year 2009-2010. 5. We have heard Mr. Pardiwalla, learned Senior Counsel for the petitioner at some length yesterday in respect of the above three petitions. The petitioner had made a grievance of the manner in which the respondent has dealt with the petitioner in these proceedings and particularly the fact that the Affidavits which were filed on 24/12/2014 in response of the petitioner’s writ petition being Nos.679/2014 and 680/2014 seeking direction 3 MCA No.882/19 in WP No.178/15-04.12.19 that the respondent gave effect to the order of the Tribunal. At that time the respondent/revenue filed an affidavit and assured the Court that effect is being given to the order of the tribunal. However, proceedings for attachment had already commenced and sanction on 12/12/2014 also obtained, from the Commissioner to the attachment of refunds due to the petitioner, yet the same was not pointed out either to the petitioner or to the Court. This issue could have otherwise been resolved at that time itself. 6. We find that the petitioner is justified in making a grievance with regard to the Respondents/Revenue's failure to disclose all facts in its affidavit filed on 24/12/2014. We expect the Respondents/Revenue to be fair in its dealing with the Assessee and also to this Court. This attitude is not expected of the State. At this stage except for making the aforesaid observations which we trust that the Revenue would bear in mind and ensure this does not happen in future, we let the matter rest for the present. 7. The petitioner's grievance is that the total refund which has to be adjusted for the assessment years 2007-08 to 2009-10 amounts to Rs.1059504390/-. They are undergoing grave liquidity problems and are therefore in need of the funds which are legitimately due to them today. However, to allay the fears of the Respondent/Revenue being without any security as and when the orders on reassessment proceedings for the assessment year 2008-09 to 2011 -2012 are passed, they were willing to replace the security by making available immovable properties free from encumbrances for attachment by the Revenue. However, thereafter the petitioner submitted that they would secure the Revenue by a Bank Guarantee for 100% of the refund attached i.e. Rs.105,95,04,390/-. 8. Mrs. Asha Desai, learned counsel for the 4 MCA No.882/19 in WP No.178/15-04.12.19 Respondent/Revenue on instructions states that she has no objection to the Revenue being secured by a Bank Guarantee. 9. In view of the above, as the petitioner is furnishing a Bank Guarantee of a Nationalized Bank for an amount of Rs.105,95,04,390/- to the satisfaction of the Commissioner of Income Tax, the respondents would vacate the attachment of the refund of Rs.105,95,04,390/- done under Section 281B of the Act. The Bank Guarantee furnished by the petitioner will be kept alive till the final disposal of the reassessment notices for the Assessment year 2008-2009 to 2011-2012 and for eight weeks thereafter. Once the Bank Guarantee in the above terms is furnished to the satisfaction of the Commissioner of Income Tax, Panaji, the Respondents/Revenue will hand over the three refund amounts aggregating to Rs.105,95,04,390/- to the petitioner within one week thereafter. 10. Rule made absolute in the above terms. 11. Parties to act on an authenticated copy of this order.” (Emphasis supplied) 4. The applicants, took out Misc. Civil Application No.171/2019 in Writ Petition No.178/2015 seeking to replace the bank guarantee from a nationalized bank with a bank guarantee from a scheduled bank. Since the same was not opposed, necessary modification was made to our order dated 08.05.2015 and the bank guarantee from the nationalized bank was permitted to be replaced by a bank guarantee of a scheduled bank. What is important is that even this modification was with the consent of the parties. 5 MCA No.882/19 in WP No.178/15-04.12.19 5. From the perusal of our order dated 08.05.2015, it is very clear that the same was a consent order. The applicant desired the raising of attachment and for that purpose, had instituted Writ Petition No.178/2015 with which we are presently concerned. The applicants, as is clear from paragraph 7 of our order dated 08.05.2015, had offered a security by making available immovable properties free from encumbrances from the attachment by the Revenue to begin with. However, thereafter, the applicants submitted that they would secure revenue by a bank guarantee in an amount of `105,95,04,390/-. Paragraph 8 of our order dated 08.05.2015 thereafter records the statement made by Ms. Asha Desai, the learned counsel for the Revenue on instructions, that she has no objection to revenue being secured by a bank guarantee. From all this, as also, subsequent order dated 14.02.2019, it is very clear that an order dated 08.05.2015 was a consent order. The order was made simply because the applicants offered to secure the amount by furnishing a bank guarantee and this offer, was accepted by the revenue. 6. Mr. Thakkar however submits that our order dated 08.05.2015 was not a consent order but a direction to furnish a bank guarantee in terms of the statute. If that be so, unless it is pointed out that there has been some change in the statutory provisions, then again,there is no question of varying our order dated 08.05.2015. In any case, from the tenor of our order dated 08.05.2015, we are satisfied that the same 6 MCA No.882/19 in WP No.178/15-04.12.19