Delayed refunds – High Court raps Customs Commissioner – Disciplinary action ordered
For those overzealous Revenue officers, who are quick to demand but slow to refund, here is bad news. The government will end up paying interest and you will be stuck with a charge sheet.
DDT was all praise for the Board when it issued Circular No. 802/2004 dated 8.12.2004 – please see Praise be to the Board in dated 17 12 2004.
Board had clearly instructed that deposits must be returned within three months from an appellate order favourable to the assessee unless a stay has been obtained. Board had warned that disciplinary action will be initiated against defaulting officers and the interest payable is liable to recovered from them. As this column has pointed out on several occasions, obeying the Board is not exactly a favourite pastime of the Commissioners. This is an unfortunate department in which the field has only contempt for the Board, maybe deservedly so! But what happens to administration when the orders of the highest authority are flouted with impunity? Board in the above circular wanted Commissioners to monitor the issue and give proper directions to their subordinates and keep the Board informed about the instructions issued. Obviously nobody monitors these things. And some Commissioners are more loyal than the Board!
Investigators have a fascination for demanding “spot payment” of the alleged duty evaded. In a case we are reporting today, the assessee had paid an amount of Rs. Three Crores – of course voluntarily and without any pressure from the department, except perhaps a little threat of arrest and attachment. The amount of duty payable was settled at Rs. 33 Lakhs. The assessee asked for a refund of the balance of Rs. 2.67 Crores – for love, law or the Board, the Commissioner would not grant the refund, but went in writ to the High Court and successfully stalled the proceedings there for two years. Government told the Court that the department was under a bona fide belief that it is not proper to grant the refund when the department’s stay application was pending. Is at an admission that they have not read the Board Circular or that they don’t care for Board circulars?
The High Court was not of course impressed with this bona fide theory and observed that “The failure to take prompt action on an application for refund may give rise to a legitimate apprehension that such inaction was not bonafide.”
The High Court calculated the interest in this case to be around 65.5 Lakhs and ordered its recovery from the officers concerned if they had no plausible defence – which of course they will have! The High Court also ordered departmental proceedings against the Commissioner and Assistant Commissioner among other officers.
Audit objection from High Court order? A copy of the High Court order is being sent to the CAG. Maybe he can make a couple of objections. Incidentally is there any punishment for blatant disobedience of Board instructions?
It is only a government servant who can have the audacity and absolute callousness in retaining 2.7 Crores of rupees illegally and perhaps boast about it. Even for a rich company 2.7 Crores is a lot of money and when that kind of money is illegally held by the government for more than four years, a lot of economics is upset. There are several companies who have closed shop because of such actions. Even the 6% interest the Government pays is hardly any compensation for the money blocked up. Shouldn’t we have a little consideration for other people’s money?
Any way, the message is now loud and clear – Deny and delay refunds – you are sure to land in trouble. Will they hear it?
See the HONDA SIEL CARS INDIA LTD which we are reporting today.