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CASE NO.: Appeal (civil)  3018 of 1999

PETITIONER: Union of India & Ors.

RESPONDENT: M/s Upper Ganges Sugar & Industries Ltd.

DATE OF JUDGMENT: 05/01/2005

BENCH: S.N.Variava, Dr. AR. Lakshmanan & S. H. Kapadia

JUDGMENT: J U D G M E N T

S. N. VARIAVA, J.

       This Appeal is against the Judgment of the Allahabad High Court  dated 16th January 1998.          Briefly stated the facts are as follows.         On 12th October 1974, the Central Government issued  Notification No. 145 of 1974 granting certain rebates on sugar.  On 1st  August 1975, the Respondents submitted a claim for Rs. 27,84,474/-.   The Respondents claimed this amount as a rebate by calculating  excess on excess production for the period 1st December 1974 to 30th  September 1975.  The Assistant Collector was of the view that the  rebate could only be claimed on excess of average production.   Therefore, by an Order dated 8th January 1976, he allowed a rebate of  only Rs.12,76,621/-.         The Respondents filed a Writ Petition No.762 of 1981 before the  Allahabad High Court claiming credit for the balance amount of  Rs.15,07,791/-.  By an Order dated 7th December 1981, the  Respondents were directed to exhaust the remedy of Appeal as  provided under the statute.  The Respondents then filed an Appeal,  which was dismissed on 8th January 1976 by the Collector (Appeals).   The Respondents filed a further Appeal to the Tribunal.   The Tribunal  by its Order dated 28th January 1992 held that the rebate was to be  granted on excess of excess production. Thus, the Appeal of the  Respondents was allowed with consequential reliefs, i.e., that they  were to receive a credit in the sum of Rs.15,07,791/- in their PLA  Account.  Pursuant to the Order of the Tribunal, the Respondents were  given credit in the above mentioned sum.           On 1st May 1993, the Respondents filed an application before the  Assistant Commissioner claiming interest on the sum of  Rs.15,07,791/- at 18% from 8th January 1976 to 28th January 1992.   They made this claim on the ground that they were entitled to  compensation for the amount not having been paid to them earlier.   This application was rejected by the Assistant Collector on 21st  December 1993.  The Collector (Appeals) dismissed the Appeal of the  Respondents by an Order dated 1st August 1994.  The Respondents  filed a further Appeal to the Tribunal, which was also rejected on 3rd  May 1997.  The Respondents then filed a Writ Petition in the Allahabad  High Court which has been allowed by the impugned Judgment.  It has  been held that the Respondents are entitled to interest at the rate of  10%.         This matter, like so many others on our Board for the last few  months, indicates the negligent and callous manner in which the  Revenue is dealing with litigation.  In matter after matter, we have  found that relevant documents have not been filed with the paper  books.  Even at the time of hearing neither the Advocate-on-Record  nor arguing Counsel have the relevant documents with them.  In most

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cases it is the other side which supplies the relevant documents.  On  being queried by Court, Counsel frankly states that no officer is coming  forward to give any instructions or supply any documents.  Even with  the stakes being so high there is apparent callousness and negligence  on the part of the Revenue authorities.  It is hoped that this sorry  state of affairs will get remedied and proper instructions given and  documents supplied to the Advocates-on-Record and the arguing  counsel.           In this matter, the question before the Court is whether the  Respondents were entitled to interest on the amount of   Rs.15,07,791/-.  Both parties have argued at great length and cited a  number of authorities as to when interest can or cannot be granted.   In our view, for the purposes of this case, it is not necessary to go into  the larger question whether or not interest can be granted for delayed  payments.         In this case, in our view, there are two reasons why interest  could not have been granted.  The Respondents have very fairly  handed over to the Court the Appeal filed by them before the Tax  Tribunal and the Order dated 28th January 1992.  In the Appeal filed  by them, the Respondents had prayed for interest at the rate of 18%  per annum with effect from 8th January 1976 till payment.  As already  noted above, the Tribunal upheld the contention of the Respondents  that they were entitled to credit, but the Tribunal did not grant  interest.  Having already made a prayer and the same not having been  granted, it was not open to the Respondents to again make a claim for  interest.

       It must be mentioned that when the Respondents again made a  claim for interest, on 1st May 1993, their claim is not rejected on the  ground that the same has not been granted by the Tribunal.  It is  merely rejected on the ground that there is no provision under the  Central Excise and Salt Act for payment of interest.   Even in the S.L.P.  before this Court there is no ground that interest could not have been  claimed as it had not been granted by the Tribunal.  It is only when  Court asked for relevant papers and Respondents fairly handed over to  the Court copies of their Appeal and the Order of the Tribunal that it  was noticed that such a prayer had been made and had not been  granted.  Mr. Sudhir Chandra has submitted that Appellants should not  be allowed to take up this contention as there is no such ground in the  SLP.  However, in our view this is merely a question of law and thus  cannot be ignored by this Count.  As the Tribunal had not granted  interest, Respondents cannot be allowed interest by claiming it again  at a later date.            The second ground on which the Respondents are not entitled to  interest is that this is not a case where the question, whether they  were entitled to the credit of Rs.15,07,791/-, was free from doubt.   This was a question which was bona fide agitated.  It is only in 1992  that this question was settled by the Tax Tribunal.  This therefore is  not a case where the money had been withheld unjustifiably. Thus  even presuming, in law interest can be granted on grounds of equity  this is not a case where such principles could be applied.   If that be  so, then in the absence of any provision in the contract or any  statutory provision, interest could not have been awarded.         For the above reasons, the impugned Judgment cannot be  sustained.  It is hereby set aside.  The Appeal stands allowed.  There  will however be no order as to costs.