Page 118 - GSTL_7th May 2020_Vol 36_Part 1

76 GST LAW TIMES [ Vol. 36
claimed by the Assessee from the Revenue would be available and interest
on such statutory interest would not be available.
16. From the conjoint reading of the decision of the Apex Court in the case
of Sandvik Asia Ltd. (supra) and the latter decision of the Larger Bench in the
case of Gujarat Fluoro Chemicals (supra) it appears that the liability to pay in-
terest on interest by the Revenue is not approved and to that extent the con-
tention of the Revenue can be maintained. But the further contention of the
Revenue that no interest whatsoever would be payable if the refund of the
amount of tax or refund of the amount deposited towards tax is to be made,
no interest whatsoever would be available by way of compensatory meas-
ure.
17. In our view, the general principles for awarding compensation to the
Assessee for the delay in receiving monies properly due to it is not disap-
proved by the Larger Bench of the Apex Court in the case of Gujarat Fluoro
Chemicals (supra).
18. In view of the aforesaid observations and discussion, we find that the
petitioner-Assessee would be entitled to compensation and the interest can
be awarded by way of compensation, but would not be entitled to further
compensation by way of interest on such interest, which is awarded as
compensation.
19. Under these circumstances, we find that the Court can take a reasona-
ble approach when the interest is to be awarded by way of compensatory
measure, but with further caution that the interest on such interest cannot
be ordered as per the above referred latter decision of the Apex Court in the
case of Gujarat Fluoro Chemicals (supra).”
The Hon’ble Apex Court in this case while relying upon the decision of Commis-
sioner of Income Tax v. Narender Doshil, 254 ITR 606 (S.C.) has, however, held that
the Revenue is liable to pay compensation on the amount of interest which it
should have given to the assessee but has unjustifiably failed to do this. It be-
comes clear that inordinate delay for the grant of justified claim may entitle the
person to get compensation against that delay the power of granting compensa-
tion is an inherent power. Present being a tribunal is not vested with any such
inherent power. This Tribunal is a quasi judicial authority which is absolutely
bound by the statutory provisions. No power as that of awarding compensation
is available with the Tribunal as not being provided by the statute. Otherwise
also it has never been the prayer of the appellant. Appellant is praying for enti-
tlement of interest on the amount of delayed interest. Same cannot be called as
the claim of compensation.
7. No doubt the decision of Sandvik Asia Ltd. (supra) has not been over-
ruled by the Hon’ble Apex Court in the subsequent decision of Gujarat Fluoro
Chemicals (supra). But, perusal of that decision shows that the question to be ad-
judicated in that decision before the Supreme Court was whether an assessee is
entitled to be compensated by the Income Tax department for the delay in pay-
ing interest on the refunded amount, admittedly, due to the assessee. The ques-
tion was adjudicated in affirmative. Revenue was directed to pay compensation
for the delay in making payment after the lapse of statutory period. In that case
also Hon’ble Supreme Court has clarified that amount, specifically, is compensa-
tion and is not an interest on interest. The similar clarification has come in the
subsequent case of Gujarat Flouro Chemicals (supra) also i.e. “we clarify that it is
only that interest provided for under the statute which may be claimed by an
assessee from the Revenue and no other interest on such statutory interest”.
8. Thus, the first argument of the appellants that they are entitled for

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