Hindustan Zinc Ltd. Vs CIT (Supreme Court of India)
Summary: The Supreme Court dismissed Hindustan Zinc Ltd.’s Special Leave Petition and declined to interfere with the Rajasthan High Court order concerning refund claims arising after settlements under the Kar Vivad Samadhan Scheme, 1998 (KVSS). The High Court had decided two connected Revenue appeals arising from a common ITAT order but reached different conclusions for AY 1993-94 and AY 1995-96 because the respective KVSS certificates covered materially different demands. For AY 1993-94, the certificate dated 02.02.1999 showed an outstanding demand of Rs.20,30,04,511/- entirely towards interest, against which Rs.10,15,02,255/- was paid. Subsequently, while giving effect to the ITAT orders relating to AY 1992-93, the Assessing Officer, by order dated 30.12.2002, determined a brought-forward loss of Rs.5,53,13,531/- available for set-off against AY 1993-94 income.
The High Court held that the right to consequential refund crystallised only through that later order and could not have been covered by the antecedent KVSS declaration and certificate. As no outstanding income-tax demand was covered by the AY 1993-94 certificate, the High Court agreed with the ITAT that the assessee’s right to set-off and refund could not be denied merely because KVSS had been availed in relation to interest. Revenue’s D.B. ITA No.96/2008 was accordingly dismissed. For AY 1995-96, however, the certificate dated 03.02.1999 recorded total outstanding demand of Rs.50,30,76,207/-, including income tax of Rs.22,13,44,799/-, interest of Rs.23,94,46,911/- and further interest of Rs.4,22,84,497/-.
The assessee paid Rs.16,84,14,519/- in full and final settlement. Following recomputation of the brought-forward loss for AY 1994-95, Rs.4,03,12,165/- became available for set-off against AY 1995-96. The ITAT directed refund of tax attributable to that loss, but the High Court held that doing so would reduce the income-tax demand covered by the certificate and thereby reopen a conclusive settlement. Referring to Section 90(3) of the Finance (No.2) Act, 1998, the High Court held that matters covered by the KVSS order could not be reopened. It therefore set aside the ITAT’s refund direction for AY 1995-96 and allowed Revenue’s D.B. ITA No.161/2008. Hindustan Zinc challenged the High Court order before the Supreme Court.
After hearing learned senior counsel for the petitioner, the Supreme Court found no reason to interfere with the impugned High Court order and dismissed the Special Leave Petition. Pending applications were also disposed of. The result is that the Rajasthan High Court’s differing treatment of the two assessment years remains undisturbed: the Revenue appeal for AY 1993-94 stood dismissed, while its appeal for AY 1995-96 stood allowed.
Read High Court Order in this case: CIT Vs Hindustan Zinc Ltd. (Rajasthan High Court); D.B. Income Tax Appeal No. 96/2008; 18/04/2026
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
We have heard learned senior counsel for the petitioner.
We do not find any reason to interfere with the impugned order of the High Court.
The Special Leave Petition is hence dismissed.
Pending application(s) shall stand disposed of.
