TDS not deductible on judgment debt

Argument of the learned counsel on behalf of the Food Corporation of India that since the amount of Rs. 10,31,344 has admittedly been paid on account of interest, it retains its character as interest and, therefore, the Food Corporation of India must be allowed to deduct interest thereon at the rate in force, is not tenable. There is no doubt that if the amount is paid as interest to a non-resident in the usual course of business then at the time of credit of such amount to the account of the payee or at the time of payment thereof in cash, or by issue of a cheque or draft the payer would be bound to deduct income-tax at the rate in force. However, as observed by the Supreme Court when such amount becomes part of a judgment debt, it lose its original character and assumes the character of a judgment debt. Once such an amount assumes the character of a judgment debt, the decree passed by the civil court must be executed subject only to the deductions and adjustments permissible under the Code of Civil Procedure. The learned counsel for the Food Corporation of India has not been in a position to point out any provision under the Income Tax Act or under section 195 in particular or under the Code of Civil Procedure where the amount of the interest payable under a decree is deductible from the decretal amount on the ground that it is an interest component on which tax is liable to be deducted at source.