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2019 Supreme(Guj) 639
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
G.R. UDHWANI, J.
The New India Assurance Company Limited - Appellant
Versus
Govindlal Hiralal Mandora - Respondent
R/Special Civil Application No. 16883 of 2019
Decided On : 03-10-2019
Advocate Appeared:
For the Appellant : Vibhuti Nanavati
Headnote:
Motor Accident Act -Income-tax Act,1961- Section194A(3)(ix) – Petition was lodged claiming compensation on account of death due to rash and negligent driving of driver of vehicle bearing registration - Petitioner-Insurance Company inter alia has prayed may be pleased to call for Record and Proceedings of MAC Petition from Motor Accident Claims Tribunal and after perusing same be pleased to quash and set aside orders - Insurance Company deposited a sum of towards award with interest and cost with Tribunal by account payee cheque - It appears calculation was made by the Insurance Company in absence of Pan Cards of claimants - Subsequently, when they provided Pan Cards TDS was deducted at rate of two cheques being in sum deduction case for refund exists obligation would be cast upon insurer to procure refund for him and not upon claimant – Held, Court is inclined to accept submissions from counsel for petitioner – Court appears that directions contained in relation to TDS are for smooth discharge of liability under of Income-tax Act as also convenience of claimant to apply for refund if necessary - Permission in terms of seems to be of a formal nature and not adjudicatory adjudication can be done only by income-tax department when refund is claimed – Court is therefore needless to say that unless computation of interest liable to tax is questioned normally permission said directions should be given as a matter of course - It is therefore directed that Tribunal will consider permission within days of the receipt of application accompanied with statement as indicated – Petition allowed (Para 12)
ORDER :
G.R. UDHWANI, J.
1. The petitioner-Insurance Company inter alia has prayed for following reliefs:
"17(B) Your Lordships may be pleased to call for Record and Proceedings of MAC Petition No. 220 of 2007 from the learned Motor Accident Claims Tribunal, Anand and after perusing the same be pleased to quash and set aside the orders of the learned Tribunal rendered on 12.04.2019 (Annexure-B) and 20.06.2019 (Annexure-C) and further be pleased to direct the learned Motor Accident Claims Tribunal to follow the guidelines of TDS issued by honourable Division Bench of the honourable High Court of Gujarat in the case of Prafulchandra Narberam Ladhani vs. Oriental Insurance Company Limited reported in 2007(2) GLR 1484 : 2007 ACJ 1897 (Guj.)."
2. Brief facts relevant for the purpose of this petition are thus:
2.1 M.A.C. Petition No. 220 of 2007 was lodged claiming the compensation on account of death due to rash and negligent driving of driver of the vehicle bearing registration No. GJ.6.V.8924. The claim petition was partly allowed on 09.02.2018 awarding a sum of Rs. 14,90,088/- with interest at the rate of 9% per annum.
2.2 On 07.03.2019, the Insurance Company deposited a sum of Rs. 25,83,808 towards the award with interest and cost with the Tribunal by account payee cheque dated 05.03.2019. An application, therefore, was made in the light of Prafulchandra Narbheram Ladhani v. Oriental Insurance Company Limited [2007(2) GLR 1484], which inter alia laid down certain directions to be followed by the Tribunal for deposit of the TDS amount. By order dated 12.04.2019, the Tribunal refused to accept the cheque which was towards Tax Deduction at Source being in sum of Rs. 2,20,110/- holding that Prafulchandra (supra) did not issue any direction to the Tribunal to accept the TDS amount.
3. It appears that the aforesaid calculation of Rs. 2,20,110/- was made by the Insurance Company in absence of the Pan Cards of the claimants. Subsequently, when they provided the Pan Cards, the TDS was deducted at the rate of 10% and on 20.06.2019 two cheques being in the sum of Rs. 1,01,702/- (without TDS deduction) and another in the sum of Rs. 1,01,700/- (after deduction of TDS) in terms of direction issued in Prafulchandra (supra) were sought to be deposited with the Tribunal. The Tribunal again on 20.06.2019 refused to accept the cheques of TDS amount principally on the four grounds (1) Hansagauri Prafulchandra Ladhani v. Oriental Insurance Company Limited [2007 ACJ 1897 (Gujarat)], New India Insurance Company Limited v. Bhoyabhai Haribhai Bharvad [2017 ACJ 1727 (Gujarat)] and Iffco Tokio General Insurance Company Limited v. Kirshnakumar Munshiram Agrawal [2019 ACJ 736] did not issue any direction to Tribunal to accept the cheque of TDS deducted by the Insurance Company, (2) the Insurance Company was not justified deducting the TDS, (3) the exercise of splitting the interest amount over the relevant financial year was not carried out by the Insurance Company, and (4) deduction of the tax at source was the legal obligation imposed upon the insurer in the facts of the present case, and therefore, if, after such deduction, the case for refund exists, the obligation would be cast upon the insurer to procure the refund for him and not upon the claimant.
4. Upon hearing the learned counsel for the petitioner and taking into consideration the cases referred to by the Tribunal in Para 3 of its impugned orders, this Court passes the following order:
4.1 In Hansagauri which is also referred to as Prafulchandra Narbheram Ladhani (Deceased) as also P.N. Ladhani; following directions in Para 14 were issued by this Court:
"14. It is necessary to obviate such a situation in future for other claimants who may be awarded compensation with interest thereon, and the amount of interest being deposited exceeds Rs. 50,000/-, but who may not be liable to have any tax deducted at source as per the interpretation placed by us on the provisions of Section 194A of the Act.
We, therefor
