Chief Justice M B Shah directed MSRTC to make an application to the Income Tax department for the refund after clearly stating that the amount was deducted at source by mistake on its part. Mukund Govind Joshi is a clerk in the accounts department of the MSRTC's Vahatuk Bhavan office (Mumbai Central). He underwent open heart surgery at Jaslok Hospital last September.

His wife being an employee with Jaslok, his medical bill was reduced from Rs 3 lakh to Rs 70,000, an amount reimbursed by the corporation. But in January this year, Joshi was told that the reimbursed amount would be treated as perquisites to be added to his gross taxable salary.

Joshi claimed that as per the IT Act provisions, surgery charges in an approved hospital are not taxable. He relied on a 1997 circular of the Central Board of Direct Taxes.However, MSRTC sought the opinion of their chartered accountants, the firm Chitale and Company. The CA firm relied on an outdated CBDT circular and ill-advised the corporation to add the medical reimbursement amount as part of gross salary. As he earned less than 6,000 a month, Joshi said he could not bear the tax liability.

He requested that the corporation should at least not deposit the taxable amount in the IT department. Since the company has shown the reimbursement as perquisites, he would not be able to claim any amount while filing returns, he stated. Joshi attended the Janata Durbar of Chief Minister Manohar Joshi and even participated in TV shows dealing with public grievances. He then wrote to Chief Justice Shah to intervene.

The High Court's public grievances cell scrutinised Joshi's letter and sought an explanation from the MSRTC. Dissatisfied with the reply, Shah ordered a refund.