Kalmar India Pvt. Ltd. Vs Union of India & Ors (Bombay High Court)
Bombay High Court: Directs expeditious grant of income tax refund; takes serious note of prolonged departmental inaction
Summary: The petition concerned Assessment Year 2008-2009 and the non-grant of the balance refund arising from a Section 154 rectification order dated 4th March, 2021. The Petitioner, engaged in manufacturing cargo handling equipment, had undergone amalgamation involving Kalmar India Pvt. Ltd., Cargotech Manufacturing India Pvt. Ltd. and Cargotech India Pvt. Ltd., pursuant to an Order of the High Court of Karnataka dated 18th September, 2008, effective from 1st January, 2008. For A.Y. 2008-2009, the Petitioner filed its return declaring total income of Rs.1,43,20,186/- and subsequently revised the return under Section 139(4) declaring a loss of Rs.2,67,59,205/-. The Assessing Officer passed an Assessment Order dated 30th September, 2010 disallowing the loss. The CIT (Appeals) partly allowed the appeal on 3rd February, 2014, and the ITAT Mumbai thereafter allowed the Petitioner’s appeal by order dated 27th July, 2016. Pursuant to the appellate outcome, the Assessing Officer passed the rectification order dated 4th March, 2021 determining a refund of Rs.1,60,90,386/-. The Centralized Processing Centre released Rs.1,16,40,102/- on 12th October, 2021, while the Petitioner stated that the balance amount of Rs.40,28,944/- remained unpaid despite repeated representations. The Bombay High Court, on 21st April, 2025, took note of the prima facie inordinate delay and directed the Principal Chief Commissioner, Income Tax – 6, Mumbai to file an affidavit explaining the reasons for the delay and identifying the persons responsible. The Court also observed that where delay attributable to officials results in liability for payment of interest, the officials responsible should be made responsible for such interest rather than leaving the State Exchequer alone burdened. An Affidavit in Reply dated 25th August, 2025 explained the issues concerning online payment of the balance amount and stated that the CPC had cleared issuance of a physical cheque. The Petitioner subsequently received Rs.47,99,250/- by SBI cheque dated 3rd June, 2025 towards the principal amount and part interest, but contended that the entire interest had not been paid. The Respondent stated that, according to it, the entire interest had already been paid, while also submitting that the Petitioner could furnish its computation of interest to the Assessing Officer for examination. The Bombay High Court accordingly directed the Petitioner to submit its computation of interest to the Assessing Officer within one week, bringing out the balance interest claimed as due and payable, and directed the Assessing Officer to examine the computation and pay the balance interest determined, if any, within four weeks from receipt of the computation. The Rule was made absolute in those terms and the writ petition was disposed of, with no order as to costs.
Argued by Adv. Bharat Raichandani i/b UBR Legal.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1. Rule. Respondents waive service. With the consent of pa rties Rule made returnable forthwith and heard finally.
2. The brief facts of the case are this. The Petitioner is engaged in the manufacturing of cargo handling equipment. One Kalmar India Pvt. Ltd. (PAN: AACCS0160L) and Cargotech Manufacturing India Pvt. Ltd. (PAN: AAAC16345P) amalgamated with Cargotech India Pvt. Ltd. (P AN: AABCH8289A) vide an Order of The High Court of Karnataka dated 18th September, 2008. The said Order was effective from 1st January, 2008. The merged/ amalgamated entity was called Cargotech India Pvt. Ltd. (PAN: AABCH8289A). The name of Cargotech India Pvt. Ltd. (PAN: AABCH8289A) was, later, changed to Kalmar India Pvt. Ltd. vide Certificate of Incorporation Pursuant to Change of Name dated 2nd December, 2024 issued by the Ministry of Corporate Affairs. Hence, the present Petition has been filed in the name of the present Petitioner.
3. The Petitioner is the holder of PAN No. AABCH8289A. The Assessment Year, in question, is Assessment Year 2008-2009. The Petitioner filed a return on 29th September, 2008 declaring a total income of Rs.1,43,20,186/-. It revised the return under Section 139(4) of the Income Tax Act declaring a loss of Rs. 2,67,59,205/-. The revised return was filed on 30th March, 2010. However, Assessment Order dated 30th September, 2010 was passed by the Assessing Officer disallowing the said loss. An Appeal was filed before the Commissioner of Income Tax (Appeals). The CIT (Appeals), vide Order dated 3rd February, 2014, partly allowed the Appeal. The Petitioner preferred an Appeal before the Income Tax Appellate Tribunal, Mumbai (ITAT). The ITAT, vide Order dated 27th July, 2016, allowed the Appeal of the Petitioner.
4. Based on the above, a Rectification Order under Section 154 was passed by the Assessing Officer on 4th March, 2021 determining a refund of Rs.1,60,90,386/-. Based on the said Rectification Order, the Centralized Processing Centre (CPC) released a sum of Rs.1,16,40,102/- on 12th October, 2021. In addition, the Petitioner received a sum of Rs.4,21,340/- on 15th May, 2010 and 13th August, 2010. Mr. Raichandani, the learned Counsel for the Petitioner, submits that the balance amount of Rs. 40,28,944/- was not refunded. The Petitioner made several representations to the Income Tax Authorities, from time to time, seeking a refund of the balance sum. However, to no avail. Accordingly, the present Petition is filed.
5. On 21st April, 2025; the following Order came to be passed by this Court:
“1. Leave to amend and add PCIT – 6, Mumbai as party Respondent. Amendment to be carried out forthwith. Re- verification is dispensed with. Mr. Sharma waives service.
2. The Petitioner is seeking implementation of the refund Order dated 04.03.2021.
3. Mr. Raichandani has pointed out that for the last three years, the Petitioner has been pursuing the matter with the Respondents. However, neither is any refund actually granted nor have the Respondents shown the courtesy of even a response.
4. If the above statement is correct and it is, prima facie, we have no reasons to disbelieve the above statement, then, this is a serious matter.
5. Mr. Sharma submits that directions may be issued for disposal of the Refund Application or for implementing the refund order. If necessary, we will have to consider issuing such directions. But before that, we would like to know the reasons for such prima facie inordinate delay in not granting refund or in not even responding to the repeated Applications for implementation of the refund order.
6. Accordingly, we direct the Principal Chief Commissioner, Income Tax – 6, Mumbai to file an Affidavit by 25.04.2025 apprising us of the reasons for delay and the officers responsible for such delay. In such matters, there are instances where the higher officials, even though, there is no explanation for the delay, avoid giving details of the officials who are responsible for the delay. In such a situation, we will be left with no alternative than to fix the responsibility on the highest official in the department. Therefore, we expect a detailed Affidavit by 25.04.2025 apprising the Court of the circumstances of pendency, the reasons therefore and the persons responsible. A copy of this Affidavit must be served upon learned Counsel for the Petitioner by 25.04.2025, if necessary, by Email.
7. List this matter on 28.04.2025.
8. In the meantime, it is also open to the Respondents to process Petitioner’s repeated Applications and if refund is indeed a due, to credit the same into the Petitioner’s account. The Affidavit as now directed, must be filed by 25.04.2025 without seeking any further adjournments.
9. On account of such delays, the State Exchequer is foisted with the liability of paying interest. If, on account of negligence on the part of the officials or for any extraneous reasons, refunds are not granted within a reasonable period, the State Exchequer should not be alone burdened with the liability for payment of interest. The officials responsible for such delay should be made responsible for payment of such interest. Simply because the officials feel that they are never going to be held responsible, there is a tendency to delay disposals.
10. We request Mr. Sharma to immediately inform the PCIT – 6, Mumbai about this order so that the Affidavit now directed by us can be positively filed by 25.04.2025.”
6. Pursuant to the same, an Affidavit in Reply, affirm ed on 25th August, 2025, has been filed by the Principal Commissioner of Income Tax-6, Mumbai, which is taken on record. The said Affidavit explains the issues arising in making online payment of the balance sum and the efforts taken by the Assessing Officer to resolve the said issue. It is also averred that the CPC has given clearance to issue a paper refund by issuing a physical cheque, which would be issued shortly.
7. Pursuant to the same, Mr. Raichandani, the learned Counsel for the Petitioner, states that the Petitioner has received a sum of Rs.47,99,250/- vide SBI cheque no. 642560 dated 3rd June, 2025 towards the principal amount and part interest. However, according to Mr. Raichandani, the entire interest amount has not been paid to the Petitioner.
8. Mr. Sharma, the learned counsel for the Respondent, states that as per the Respondent, the entire interest is already paid. He, however, submits, on instructions from the Assessing Officer, that the Petitioner may submit its computation of interest to the Assessing Officer, which the Assessing Officer would examine and determine the refund of interest, if any, and the same would be paid within a reasonable period of time.
9. We have heard the parties. In the facts of the present case and in light of the submissions made by the parties; we pass the following Order:
(a) The Petitioner may submit its computation of interest to Respondent No. 7, the Assessing Officer, within one week from today, bringing out the balance interest due and payable;
(b) Within a period of four weeks from the date of receipt of such computation of interest, Respondent No. 7, the Assessing Officer, shall pay the balance sum of interest determined, if any, based upon the examination of computation so submitted by the Petitioner.
10. Rule is made absolute in the aforesaid terms and the Writ Petition is also disposed of in terms thereof. However, there shall be no order as to costs.
11. This order will be digitally signed by the Private Secretary/ Personal Assistant of this Court. All concerned will act on production by fax or email of a digitally signed copy of this order.
