Madras HC directs I-T dept to refund over Rs 10 cr to Panasonic

Court also asks the department to hear matter afresh

The Madras High Court has directed the Income Tax department to refund the entire amount it had attached from Japanese electronics major Panasonic’s Indian arm.

L Maithili, who represented Panasonic India at Madras High court, has confirmed the order, which was passed by Justice S Vaidyanathan last week. The order was passed in a reply to a writ petition filed by Panasonic India Pvt Ltd, which sought the court to quash the Income Tax department’s order and had asked the court to direct the department not to enforce the demand for the assessment year 2010-11, for which a demand notice was passed in March 2014.

The department had sent a show cause notice to the company directing it to pay Rs 10,74,60,450. However, the company had challenged the assessment order, against which an appeal has been preferred before the Commissioner of Income Tax (appeals) and the company also had sought an interim order of stay and a request for personal hearing.

In the petition, Panasonic India had said the authority should have waited for the court hearing and added they should not have attached the entire amount of over Rs 10 crore.

The counsel appearing for Panasonic also contented no opportunity had been given to the company before making the attachment.

The counsel, who represented the department, contented the original order was passed in March 2014 and the assessment year was 2010-11, and the petitioner was bound to pay the demanded amount.

After hearing both sides, the court has ordered, “Without going into the merits of the case, I am of the view the authority should have considered the legal submissions raised by the petitioner before passing the impugned order”.

“I am of the view the impugned order has to be set aside and the matter has to be remanded to the Appellate Authority to consider the case afresh on merits and in accordance with the law,” stated the order.

While explaining the authority was empowered to pass an interim order, the Justice also said a detailed order had to be passed after considering the points raised by the company.

“The impugned order is set aside and the matter is remanded to the Authority to pass orders afresh within a period of two weeks from the date of receipt of a copy of this order. Before passing any order, the entire amount should be refunded to the petitioner (Panasonic India Pvt Ltd),” said in the order.