Facts of the Case

The Petitioner, MUFG Bank Ltd, filed multiple writ petitions seeking directions against the Respondents for failure to give effect to various orders passed by the Income Tax Appellate Tribunal (ITAT), assessment orders, and an order of the Calcutta High Court.

Despite favorable orders dated 21 May 2020, 06 December 2018, and 13 September 2019 by the ITAT, along with an assessment order dated 18 March 2021 and the Calcutta High Court order dated 07 August 2019, the Respondents did not pass consequential appeal effect orders.

Due to this inaction, substantial refunds amounting to crores of rupees across multiple assessment years remained unpaid, along with applicable statutory interest 

Issues Involved

  1. Whether the Respondents failed to comply with statutory obligations by not passing appeal effect orders pursuant to ITAT and High Court decisions.
  2. Whether withholding of legitimate tax refunds violates provisions of the Income Tax Act, 1961.
  3. Whether such inaction is contrary to constitutional provisions under Articles 265 and 300A of the Constitution of India.

Petitioner’s Arguments

  • The Respondents failed to give effect to binding judicial orders without any justification.
  • Legitimate refunds due to the Petitioner remained blocked due to administrative inaction.
  • Multiple representations were made to the authorities requesting implementation of orders, but no action was taken.
  • The failure to pass appeal effect orders violated Section 153(5) of the Income Tax Act.
  • Withholding of refunds was arbitrary and contrary to Articles 265 and 300A of the Constitution.

Respondent’s Arguments

  • The Revenue submitted that the process of issuing refunds to the Petitioner was underway.
  • No substantive justification for the delay in passing appeal effect orders was recorded in detail.

Court’s Findings / Order

  • The Delhi High Court observed that the petitions sought limited relief regarding implementation of already decided matters.
  • The Court disposed of the writ petitions with directions to the Respondents:
    • To pass appeal effect orders in accordance with prior ITAT, assessment, and High Court orders.
    • To release the consequential refunds along with applicable interest.
  • The Court directed that such actions be completed within six weeks.
  • All rights and contentions of the parties were kept open.

Important Clarification

  • The Court did not adjudicate on the merits of the original tax disputes.
  • The order was limited to ensuring compliance with already adjudicated decisions.
  • The ruling reinforces that administrative delay cannot defeat vested rights arising from judicial orders.

Sections Involved

  • Section 244A(1), Income Tax Act, 1961 – Interest on Refund
  • Section 244(1A), Income Tax Act, 1961 – Additional Interest
  • Section 153(5), Income Tax Act, 1961 – Time limit for giving effect to appellate orders
  • Article 265, Constitution of India – No tax without authority of law
  • Article 300A, Constitution of India – Right to property

Link to download the order -https://delhihighcourt.nic.in/app/showFileJudgment/MMH19102022CW147452022_190917.pdf

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