Skip to main content

No deductions allowed from a judgment-debt/arbitral award

Cause Title : M/s. Neo Built Corporation Vs. Union of India, EC 272 of 2022, Calcutta High Court

Date of Judgment/Order : 10.07.2023

Corum : Moushumi Bhattacharya, J.

Citied: 

  1. All India Reporter Ltd. vs. Ramchandra D. Datar; AIR 1961 SC 943
  2. S.S. Miranda Ltd. vs. Shyam Bahadur Singh; 1984 SCC OnLine Cal 161
  3. Voith Hydro Ltd. vs. NTPC Limited; 2021 SCC OnLine Del 1325

Background

An award of Rs. 3.88 cr was decreed against the Metro Railway which was reaffirmed on appeal by the Division Bench of the High Court. However, the grievance of the award-holder is that instead of Rs. 3.88 crores which was recorded in the order dated 4th May, 2023, the award-holder received an amount of only Rs. 3.5 crores. The difference of about Rs. 38 lacs was a result of the award-debtor deducting TDS on the said amount. The Metro Railway argued that the deduction has been done as per the rules set by the Railway Board, Ministry of Railways.

Judgment

The question before the HC was whether TDS can be deducted from an awarded/decretal amount.

Referring to the judgments above, the HC observed that the Supreme Court held that the judgment-debtor cannot satisfy the claim of a third party against the judgment-creditor and pay only the balance to the latter in the absence of a direction in the decree to that effect and it has been further decided by the various courts that the judgment-debtor who had deducted TDS, - would be at liberty to take steps for recovery of the amount from Income Tax Authority in accordance with law.

The HC held that the position in law is that the decretal amount is a “judgment-debt” and must be paid in its entirety to the decree-holder. No amount can be deducted as tax at source from the decretal sum and that the judgment-debtor is not entitled to pay only the balance amount to the decree-holder.

Comments

Post a Comment

Most viewed this month

Appellate authorities under Special Statutes cannot be asked to condone delay

Madras High Court in R.Gowrishankar vs. The Commissioner of Service Tax has held that Appellate authorities cannot be asked to condone the delay, beyond the extended period of limitation A Division Bench comprising of Justices S. Manikumar and D. Krishnakumar, made this observation while considering an appeal filed against Single Bench order declining to set aside the order made in the condone delay petition filed by the petitioner to condone 223 days in filing the appeal before the Commissioner of Service Tax (Appeals). Article referred: http://www.livelaw.in/appellate-authorities-special-statutes-cannot-asked-condone-delay-beyond-extended-period-limitation-madras-hc/
Post a Comment
Read more

'Seize assets to pay damages to accident victim'

Her story might be an inspiration for the physically challenged but justice has remained elusive for her. In 2008, a bus accident left research engineer S Thenmozhi, 30, paraplegic. In April 2013, the motor accident claims tribunal directed the Tamil Nadu State Transport Corporation (TNSTC) to provide her a compensation of 57.9 lakh. However, TNSTC refused to budge and on Tuesday a city court ordered attaching of movable assets of the transport corporation. Thenmozhi was employed in C-DOT, a telecom technology development centre in Bangalore. On July 21, 2008, she was coming to Chennai in a private bus. Around 2am, the bus had a flat tyre and the driver parked it on the left side of the road near Pallikonda in Vellore district on the Bangalore-Chennai highway. While the tyre was being changed, a TNSTC bus of Dharmapuri division hit the stationary bus. The rear part of the bus was smashed and passengers were injured. Thenmozhi who had a seat at the back of the bus suffered...
Post a Comment
Read more

Mumbai ITAT rules income of offshore discretionary trust is subject to tax in India

The Mumbai Income Tax Appellate Tribunal (ITAT) has recently determined the following issue in the affirmative in the case of Manoj Dhupelia: Should the income of an offshore discretionary trust be subject to tax in India, if no distributions have been made to beneficiaries in India? The question arose from appeals filed by individual beneficiaries in relation to a Lichtenstein-based trust, the Ambrunova Trust and Merlyn Management SA (the Trust) with the ITAT. It is important to note that the individuals in this case were amongst those first identified by the Government of India (GOI) as holding undeclared bank accounts in Lichtenstein. The ITAT ruling raises the following issues: Taxation of Trust Corpus: ITAT classified the corpus of the trust as "undisclosed income" and declared it taxable in the hands of the beneficiaries. Taxation of Undistributed Income: ITAT refused to draw a distinction between the corpus and undistributed income from the trust and declared i...
Post a Comment
Read more