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October 17, 2023

No TCS was applied to the purchase of the coal that will be used to generate electricity

No TCS was applied to the purchase of the coal that will be used to generate electricity

Fact and issue of the case

Heard learned counsel for the parties.

The instant Writ application has been preferred by the petitioner for following reliefs:-

a. Refund of Rs. 7,86,33,649 which had been illegally realised from the Petitioner in the guise of TCS;

b. Payment of interest at the rate of 18% per annum on the amount of Rs. 7,86,33,649, from the date of such monies being realised from the Petitioner till the date of refund;

c. In alternative to the Prayers above, issuance of directions to Respondents No. 3 to 5 (Revenue) to deposit the amount of Rs. 7,86,33,649/- along with statutory interest pertaining to TCS in the Permanent Account Number of the Petitioner;

d. Declaration that the action of Respondents No. 1 and 2 (CCL) and Respondents No. 3 to 5 (Revenue) in neither granting refund of monies illegally realised from the Petitioner nor facilitating adjustment of such monies towards future tax liability of the Petitioner is illegal, arbitrary and violative of Article 14 and 265.

The case of the Petitioner Company is that the Respondents No. 1 and 2 forcefully realised Rs. 7,86,33,649/- from the Petitioner in the guise of Tax Collected as Source (hereinafter to be referred as ‘TCS’) for the period FY 2012-2013 to the First Quarter of FY 2017-2018.

Learned counsel for the petitioner contended that the benefit of Section 206C(1A) of the Income Tax Act, 1961 ought to have been granted to the Petitioner once Form 27C has been submitted by the Petitioner and there exists no material to conclude that the declaration forming part of such Form is false. He contended that once Form 27C has been submitted by the buyer, the concept of a ‘mini-trial’ does not exist at the time of availment of benefit under Section 206 C(1A) of the Income Tax Act, 1961. Learned counsel further submits that Para 19(d) of order dated 03.12.2018 passed by this Court in W.P. (C) No. 46/2018, as applied to the Petitioner vide order dated 16.05.2019 passed by this Court in W. P. (C) No. 187/2018, has no applicability to the present case of the Petitioner and instead the Petitioner is governed by Paras 19(a) and 19(c) of the said order. Any solution, wherein the Petitioner is made to wait for the issuance of TCS Certificate or subsequent adjustment of its future tax liabilities by the Income Tax Department until technical glitches are resolved would legitimize the illegal collection of tax and therefore, such an approach cannot be sustained.

Observation of the court

Having heard learned counsel for the parties and after taking cognizance of the statements made in the Supplementary Affidavit dated 13.06.2023 filed by the Respondents No. 3 to 5 (Revenue); we hereby direct that the entire sums of money collected as TCS from the Petitioner along with interest thereon, i.e., Rs. 6,25,58,318.89/- (towards TCS) plus Rs. 1,60,75,329.93/- (towards interest), amounting in toto to Rs. 7,86,33,649/-, be refunded by Respondents 3 to 5 (Revenue) to Respondents No. 1 and 2 (CCL) who should thereafter forthwith refund the same to the Petitioner in a time-bound manner.

(a) The Refund by Respondents No. 3 to 5 (Revenue) to Respondents No. 1 and 2 (CCL) referred to above is directed to be affected within six weeks from the date of this order and in turn the Respondents No. 1 and 2 (CCL) shall refund the same to the Petitioner within two weeks thereafter. Should any of the Respondents delay in meeting the aforementioned timelines then statutory interest as per the Act on Refund will be granted in favour of the Petitioner and payable by the defaulting Respondent.

(b) Taking cognizance of the undertaking made by the Petitioner vide its Reply-Affidavit dated 11.07.2023 after the directions as above are implemented in substance by the aforementioned Respondents; then the Petitioner would abstain from utilizing the TCS certificates previously issued to it so as to facilitate the grant of relief in terms of ‘Option No. 2’.

At this stage it is pertinent to refer the Rejoinder/Reply dated 04.08.2023 of Respondents No. 1 and 2 (CCL) filed in response to Supplementary Affidavit dated 13.06.2023 of Respondents No. 3 to 5 (Revenue) submitting therein that M/s C.C.L. will not have any problem as regards to Option/Possible Solution No. No. 2; provided the Income Tax Department accepts the order passed by ITAT, passed in ITA No.- 38/RAN/2021 dated 23.01 .2023, decided in favour of CCL and undertakes not to challenge the same by filing appeal before this Court or before the Hon’ble Supreme Court. We categorically clarify that Appeal under 260A is a statutory right and we cannot prevent anyone, either Assessee or Revenue from availing such right. As such the said plea of Respondent CCL is misconceived and hence rejected. Before parting, it is also pertinent to indicate that for other interests as claimed/prayed by the petitioner herein is concerned; the petitioner would be at liberty to move competent Civil Court for redressal of his grievance of interest, if so advised.

As a result, the instant writ application is disposed of in the manner indicated herein above.

Pending I.A., if any, also stands disposed of.


In the result, appeal of the assessee is allowed and ruled in favour of the assessee

Read the full order from here


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