High Court imposes costs and interest on Customs for Delayed Refund
WHILE the Government seems to be really worried about avoidable outgo of interest due to non-compliance of court orders, the field officers seem to be having a field day flouting court orders to ensure that no refunds are given.
In a recent case, by an appellate order, the fine and penalty was reduced. As a natural corollary, the assessee sought refund of the excess payment. As the Customs Department was not giving the refund, the party approached the High Court. In the High Court, the Standing Counsel for the Department assured the Court that the excess fine and penalty would be refunded in ten days. So, the High Court disposed of the writ petition with a direction to refund the excess fine and penalty within ten days. Obviously, the Commissioner was not impressed and he filed a review petition before the High Court instead of giving the refund.
The High Court observed, "When an appellate authority allows an appeal filed against imposition of tax, duty, fine, penalty etc., it is the bounden duty of the assessing authority, as part of a democratic government, to refund the amounts covered by orders of the appellate authority, when appeals are allowed fully or partially. The same shall be refunded even without a formal request for the same".
The High Court directed refund of the excess fine and penalty with interest and imposed a cost of Rs. 25,000/- on the Commissioner and all officers responsible.
In the first round, there was neither interest nor cost, but the Department's adamant attitude in not giving due refund and filing a review petition resulted in interest and costs. The Court was of the view that the Petition itself was an abuse of the process of the court and precious time of the court has also been wasted by this frivolous review petition.
Most probably, the Department will take this case to the Supreme Court, at least on the issue of costs to be recovered from officers and maybe they could even win there, because it is really difficult for a poor assessee to defend his case in the Supreme Court. But with whose money are they playing?
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