Ajoy Nath Roy, J.
1. This is an application under article 226 of the Constitution of India directed against a portion of the order dated August 4, 1978, passed by the Income-tax Officer, 'C' Ward, Company District-1. The objection is raised only with regard to the sum of Rs. 5,80,705 which, in that order, is declared to be the interest under Section 214 of the Income-tax Act, 1961.
2. The case of the writ petitioner is that the original assessment for the assessment year 1970-71 was made by an order dated March 30, 1973. Thereafter the same was set aside on revision on September 25, 1973. A fresh assessment was made on January 25, 1975. A prayer for rectification was also made to the Income-tax Officer. Further, an appeal from the assessment was heard and disposed of on April 28, 1978. The order dated August 4, 1978, which I have mentioned in the beginning, gives effect to the decision in the appeal.
3. From page 37 of the annexures to the writ petition it would appear that this same sum of Rs. 5,80,705 was the amount of interest which would be payable at the rate prescribed under Section 214 for the periodfrom April 1, 1970, to March 31, 1973, on a refundable amount of Rs. 19,35,685.
4. It has been contended on behalf of the writ petitioner that now, even according to the order of August 4, 1978, the amount refundable is Rs. 56,54,927. As such the amount of interest under Section 214 cannot be stationary at the earlier figure.
5. It has been further contended, and this is the important point of law involved herein, that being successful in appeal, the writ petitioner would be entitled to interest on the sum (if it is to be refundable from out of the advance tax paid) from the first day of the assessment year in question, that is, April 1, 1970, in this case, until the date of refund.
6. This argument is composed of two parts. The first part deals with interest which will be payable up to the date of the finalised assessment after the appeal. Under Section 214, Sub-section (1), on an interpretation that the words 'regular assessment' used there must mean the assessment which is ultimately made by the Income-tax Officer giving effect to the decision in appeal.
7. The second branch of the argument is that under Section 214(2), interest would again be payable until the date of that payment. The importance of the second branch is highlighted by the instant case for example, where the assessment was made on August 4, 1978 (with this doubt about interest under Section 214 still in it) the writ was filed in 1980, and today in 1991 no money having been paid to the assessee in the meantime, a further question of interest for another 13 years is in issue. There is no prayer for this second period in the writ, but it being a matter of pure law, I have entered into it, as a further order should be properly passed, as generally prayed for in prayer (e) of the writ.
8. In so far as the first branch of the argument is concerned, the judicial authority is clear, in so far as a Single Bench of the Calcutta High Court is concerned, that regular assessment means the assessment order made after the appellate decision is put into effect by the Income-tax Officer. In Chloride India Ltd.'s case : [1977]106ITR38(Cal) , this has been so held and the decision was affirmed by a Division Bench of this court and the case is reported in CJT v. Chloride India Ltd. : [1990]186ITR217(Cal) . In the judgment of Justice Sabyasachi Mukharji reported in : [1977]106ITR38(Cal) , there is a reference to the case of Kooka Sidhwa and Co. reported in : [1964]54ITR54(Cal) , where both Justice Laik in His Lordship's judgment in the portion at page 62 and Justice P. B. Mukharji in the portion of HisLordship's judgment at page 65 have held to the effect that even if the Income-tax Officer gives effect to the appellate decision, he is still continuing with the process of assessment. Section 23(3) of the old Act was referred to. In the present Act, Section 143(3) contemplates passing of an order by the Income-tax Officer after taking into account all relevant material and surely the direction of an appellate decision would be relevant material when the final assessment order is passed, which would determine the rights of the parties.
9. There is nothing contrary to this to be found in the definition of regular assessment which is at Clause (40) of Section 2 of the Act. In fact, 'regular assessment' is defined with reference to Section 143, and on the view that the assessment under section 143(3) still continues when the Income-tax Officer gives effect to the appellate decision, regular assessment would clearly also include, by the definition clause, this effect giving order.
10. The task for me is quite easy because there is a binding precedent on the basis of which I am bound to hold that, under Section 214, 'regular assessment' includes the final effect-giving assessment order.
11. I would also put down a few reasons why I think this point of view appeals to me otherwise also.
(1) If an assessment is ultimately substituted by giving effect to an appellate decision, then the later assessment is in no manner irregular. It does not matter if the first assessment is also a regular assessment within the meaning of Section 214. The assessee claims interest up to the date of the corrected order, and it would suffice if that order is a regular assessment, notwithstanding whether the first order is a regular assessment also or not.
(2) The second point is that though fiscal legislation is to be read in a technical way, yet unless the ordinary laws of interpretation are excluded, the same would apply to interpret fiscal legislation as well as the legislation on any other field. If an advance tax paying assessee is kept out of refundable money for no fault of his own because of a legal process, it would, to my mind, require an express provision in the fiscal statute to deny him interest for an interim period, which is substantially no more than compensation for his being denied use of his money for the intervening period.
(3) This view is further entrenched by the well-known rule of interpretation of laws or taxing statutes which are interpreted in favour of the assessee, and that the State shall not tax more than it has given itself an express power for. If the taxing provisions are to be interpretedagainst the taxing authorities, the refund-giving provisions must as a logical corollary be interpreted liberally also in favour of the assessee.
12. In view of the above Calcutta authorities, I do not think that the different view taken by the various other courts including Full Benches of other courts can have any effect so far as this Bench is concerned. I, therefore, think that the cases reported in [1989] 179 ITR 60, CIT v. G.B. Transports : [1985]155ITR548(Ker) ; CIT v. Carona Sahu Co. Ltd. : [1984]146ITR452(Bom) and CIT v. India Reinsurance Corporation Ltd. : [1984]146ITR477(Bom) , relied upon by Mr. Maitra appearing for the respondents, would not be of any use in this case.
13. So far as the second period for interest is concerned, that is, from the effect giving assessment order till the date of payment, Mr. Pal for the writ petitioner has relied upon a decision of the Delhi High Court reported in National Agricultural Co-operative Marketing Federation of India Ltd. v. Union of India : [1981]130ITR928(Delhi) . The case supports the contention that, under Section 214(2), interest is to be paid to the assessee up to the date of refund. Mr. Pal said that a Madras case reported in Rayon Traders P. Ltd. v. ITO : [1980]126ITR135(Mad) , supports his contention in so far as Section 214, Sub-section (2), is concerned but is against him so far Section 214, Sub-section (1), is concerned. I think that there is no reason why interest should not be obtained up to the date of refund. In the practical world of facts, the correct assessment order of the Income-tax Officer and the date of payment unfortunately will never coincide. Therefore, on that basis, the assessee can but hope for a correct assessment order allowing him interest up to the date of that order and then again hope for expeditious settlement of the admitted dues. Since I accept Mr. Pal's contention that under Section 214(2) payment of interest should be up to the date of payment, I am giving direction to this effect that the Income-tax Officer is to take into consideration the question of interest up to the date of the order that he will pass on the basis of this order of mine.
14. The writ petition, therefore, succeeds before me. I direct that the assessment order of August 4, 1978, to the extent of the computation of interest under Section 214 at Rs. 5,80,705 shall stand quashed and cancelled ; the rest of the order will remain intact, however, but the total refundable amount will have to be altered from Rs. 38,68,312 to another figure. Therefore, the figure of Rs. 38,68,312 shall also stand quashed and cancelled.
15. The Income-tax Officer shall allow interest under Section 214 to the writ petitioner-assessee at the rate of 12 per cent. or such other rate as may be prescribed under Section 214 of the Income-tax Act, 1961, or any other relevant law from April 1, 1970, until the date of the correct fresh assessment order to be passed as per my order herein on the total sum of Rs. 56,54,927. The Income-tax Officer shall, after setting down the said interest in place of the cancelled figure of Rs. 5,80,705, compute the total refundable amount and substitute the same in place of the figure of Rs. 38,68,312.
16. This exercise of correction shall be completed within a period of six weeks from date. It is expected that the payment will follow expeditiously.
17. Mr. Maitra has prayed for a stay of operation of this order in view of certain differences in judicial opinion (on the point involved) in this country. Since I have permitted a period of six weeks for the putting into operation of this order, I think there is already an inbuilt stay, and no other further stay is required. Therefore, the prayer for stay is rejected. The application succeeds to the extent indicated above.