This is a writ petition under article 226 of the Constitution. It appears that for the assessment year 1947-48 a demand was made upon the petitioner in respect of advance payment of income-tax under section 18A of the Income-tax Act. Admittedly, the petitioner paid no amount in respect of this demand. The petitioner took the view that it was not necessary to make payments as certain amounts were refundable to him by the income-tax department out of the amounts paid in the years preceding the assessment year 1947-48. In the assessment form, which is annexure 'B' to the affidavit accompanying the petition, the petition, the total tax demand against the petitioner including income-tax and super-tax for 1947-48 was worked out at Rs. 35,792-5-0. Credit was given to the petitioner for a sum of Rs. 7,415-5-0 as well as for a sum of Rs. 359 as interest on the aforesaid sum which was refundable to the petitioner. Thereafter the tax demand was reduced to Rs. 28,038. As admittedly no amount was paid by the petitioner towards advances income-tax, a sum of Rs. 4,805 was determined as payable by the petitioner as interest under section 18A. The date of assessment and of this form is the 26th September, 1951. The petitioner filed an appeal in respect of this demand of Rs. 4,805. The Appellate Assistant Commissioner dismissed the appeal as not being maintainable and the order of the Appellate Assistant Commissioner was maintained on further appeal to the Tribunal by its order dated November 29, 1956. Thereafter, the petitioner filed this writ petition on the 6th February, 1957, complaining that in the circumstances the levy of interest in the sum of Rs. 4,805 under section 18A was without jurisdiction. The point taken by the petitioner is that a much larger amount than the amount of advance tax determined as payable by the petitioner for the particular year was due to the petitioner and that amount should automatically have been adjusted against the demand for advance payment of tax, and as such there was no failure on his part to pay the advance tax, and accordingly the levy of interest is illegal. It has not been shown in the petition whether interest which has been charged from him has been charged also on the sum of Rs. 7,415-5-0 which was refundable to him and which was actually adjusted against the total tax demand made on the petitioner.
Learned counsel for the petitioner has urged than in the circumstances the charging of interest does not come within the purview of section 18A(6) or 18A(8) of the Act. According to him, as a large amount was refundable to the petitioner on account of the payment made by him in the preceding years, the demand for advance payment of tax was liable to be adjusted against the amounts refundable. As such, there was no failure on his part to make payment of advance income-tax due from him and as such he should not have been made liable for payment of any interest. Learned counsel for the income-tax department has conceded that the levy of interest does not come within the purview of section 18A(6) or section 18A(7). He has, however, submitted that it clearly falls within the purview of section 18A(8), the provisions of which are as follows :
'Where, on making the regular assessment, the Income-tax Officer finds that no payment of tax has been made in accordance with the foregoing provisions of this section, interest calculated in the manner laid down in sub-section (6) shall be added to the tax as determined on the basis of the regular assessment.'
Learned counsel for the petitioner says that sub-section (8) of section 18A applies only where no payment of tax has at all been made. He goes on to argue that in this particular case, an amount larger that the amount of advance demand being refundable to the petitioner, it was the duty of the Income-tax Officer to adjust the entire demand against the amount refundable. In the alternative the learned counsel goes on to say that, in any case, admittedly, the amount of Rs. 7,415-5-0 out of the amount refundable, having been adjusted towards the tax demand, it was not a case where no amount on account of the demand for advance tax was paid. For these reasons, the learned counsel submits that the provisions of section 18A(8) are not applicable.
I do not think that the contention of learned counsel is correct. The language used in sub-section (8) of section 18A is to the effect that 'where no payment of tax has been made in accordance with the foregoing provisions of this section interest... shall be added....' It seems to me that the whole point of the provision of sub-section (8) is that, unless payment of the amount of advance tax is made in the manner provided for in that sub-section, it shall be deemed that no payment has been made. Admittedly, in this particular case, payment was not made of specified sums of money, which were payable under the notice of demand under section 18A on certain specified dates. It is a different matter that certain money may have been refundable to the petitioner. It may be that these monies may have been adjusted against the demand for advance payment of income-tax, but that would not make the sum refundable and/or adjusted, a payment 'in accordance with the foregoing provisions of this section'. The sums might be refundable as learned counsel himself says under section 49E of the Income-tax Act, but a refund under section 49E or its adjustment towards his liability for payment of advance income-tax would not be a payment as contemplated in sub-section (8) and in any case an application for that purpose will have to be made. For all these reasons, I am of the view that the contention of learned counsel is not correct that the petitioner was not liable for payment of interest under sub-section (8) of section 18A.
The other ground on which the validity of the demand for interest has been challenged by learned counsel is that no order was passed imposing interest. All that was done was that the figure was entered in the assessment form. Learned counsel has argued that, unless an order was passed in this behalf, no notice of demand under section 29 could issue in respect of this amount. The answer to learned counsels argument is to be found in the language of sub-section (8) of section 18A itself. The last few words of section 18A are to the effect that interest calculated in the manner laid down in sub-section (6) shall be added to the tax as determined on the basis of the regular assessment. It is clear from this that the only order which has to be made in a case is the order of regular assessment in respect of the particular year. So far as the imposition or levy of interest on the amount of advance tax is concerned, that is a matter of mere calculation, and after the amount of interest has been so calculated, the amount is only to be added to the tax demand on the basis of the order of assessment. It is clear that no separate order levying interest is contemplated under the provisions of section 18A(8) which is the only provision in respect of the liability, in certain circumstances, for payment of interest. It follows that there is no substance in the second point also urged by learned counsel for the petitioner.
Mr. Gopal Behari, learned counsel for the income-tax department, has invited my attention to a case of the Supreme Court in Income-tax Officer, Alwaye v. Asok Textiles Ltd. It is true, as pointed out by learned counsel for the petitioner, that the point was not directly before the Supreme Court. The Supreme Court, after having quoted the provisions of sub-section (8), goes on to observe as follows :
'Therefore, the Income-tax Officer was required to calculate the interest in the manner provided under the provision of that sub-section and had to add it to the assessment.'
This cannot be said to be a decision directly on the point, but I cannot help thinking that to a certain extent this lends support to my view as expressed above.
Another submission of learned counsel for the petitioner must be referred to. He says that, in any case, a sum of Rs. 7,415-5-0 having admittedly been adjusted out of the refund due towards the demand for payment of advance tax, the same must be deemed to have been paid or satisfied at least to the extent of that amount, namely, Rs. 7,415-5-0 This submission is quite correct so far as it goes. But, as I have observed above, this still cannot be treated to be a 'payment in accordance with the foregoing provisions of the section'. Further this argument might have some relevance if it was shown that interest had been charged even on this amount of Rs. 7,415-5-0. I have already observed that there is nothing in the writ petition or in the affidavit to show that the amount of Rs. 4,805 included the interest calculated on this amount of Rs. 7,415-5-0 also. In the absence of proof of this fact, the argument loses all point. Accordingly I hold that there is no force in any of the points urged by counsel for the petitioner and the petition must fail.
There is one other aspect of the matter to which reference may be made.
The assessment order in this particular case is dated the 26th September, 1951, on which date the assessment form was also drawn up and it which the amount of interest complained against was entered. Section 30, which is the provision in the Act, providing for appeals makes no provision for an appeal against liability in respect of the payment of interest under section 18A(8). This matter may have been one of some doubt until 1953, when this court in the case in Pt. Deo Sharma v. Commissioner of Income-tax decided that no appeal lay in respect of interest under section 18A. The petitioner went in pursuing utterly incompetent and futile proceedings by way of appeals before the Appellate Assistant Commissioner and the Income-tax Appellate Tribunal. To my mind there was no justification at all for wasting time in filing those useless appeals. Since this court had decided in the year 1953, that no appeal was maintainable, the clear duty of the petitioner was to have approached this court for relief under article 226 at least in 1953. It is settled that he who seeks relief in proceeding under article 226 must come with expeditiousness. In this particular case it appears to me that the petitioner came to this court only as a last resort in the year 1956 after the futile proceedings launched by him resulted in failure. I cannot help thinking that launching and pursuing these futile proceedings is evidence of gross negligence. In the circumstances, I am of the view that this petition is liable to be dismissed on the ground of delay and latches also.
The petition is accordingly dismissed with costs.