Home Case Index All Cases Indian Laws Indian Laws + HC Indian Laws - 2016 (7) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (7) TMI 1680 - HC - Indian LawsSuit for recovery of principal amount together with interest for the period prior to the institution of the suit together with future interest - guilty of acts of misappropriation or not - pleading is that assets of the defendant company alleged to have been sold fraudulently were sold in the lifetime of Shri Sudhir Sareen. HELD THAT:- If the defences which are in violation of laws and amount to defrauding the taxation authorities cannot be permitted to be taken. A litigant cannot be permitted to take a stand in the Court diametrically opposite to the stand taken by it before Taxation Authorities. If the courts permit such stand to be taken in the course of judicial proceedings and should the courts come to the rescue of such a litigant, in this case for avoiding the recovery of dues which the litigant elsewhere has represented to be due from her, I am afraid the courts would be becoming privy to abuse of their own process. In Ram Sewak Vs. Ram Charan [1981 (11) TMI 190 - ALLAHABAD HIGH COURT] the parties had been keeping double set of accounts for evading payment of income-tax and sales tax; the trial court reported the matter to the Taxation Authorities; the High Court held that the court should have refused to entertain the suit on the ground of public policy as it involved directing the recovery of an amount found to be due to either party as a share of the profits which had been deliberately concealed by the parties from the books of account in order to evade the payment of taxes. It was further held that no court can countenance a deliberate evasion of the tax laws of the country and to lend the aid of the Court for recovering an amount which had been deliberately kept concealed by the parties in order to evade payment of the taxes due thereon. It was yet further held that if the court was to do so, it would amount to aiding and abetting of the evasion of the laws by the Court itself. It is not open to the defendant to before this Court contend that the monies which the defendant in its books of accounts and balance sheet has shown as loan from the plaintiff and repayable to the plaintiff (and on the basis whereof the defendant has been assessed for tax) are not a loan from the plaintiff but "in the nature of gift" from the plaintiff and not repayable to the plaintiff. Supreme Court, in Karam Chand Thapar & Bros. (P) Ltd. Vs. Commissioner of Income Tax, Calcutta [1971 (8) TMI 29 - SUPREME COURT] held the circumstance that the assessee was showing the shares as investment shares in its books of accounts as well as in the balance sheet, though not conclusive, but is relevant circumstance on which reliance could be placed upon and necessary inference drawn. It was further held that the explanation, that the Company had to do so because of provisions of the Company Law, was unfounded. It is not the case of the defendant in the present case that the plaintiff Company was authorised to make gift or that the defendant Company was authorised to receive gift. For this reason, the defence of the amount being by way of gift or in the nature of gift cannot be entertained - there are no basis in law to put the present suit to trial insofar as the claim of the plaintiff company for recovery of principal amount of Rs. 1.48 crores is concerned. In the entirety of the facts and circumstances, it is deemed appropriate to award interest to the plaintiff company on the said sum of Rs. 1.48 crores w.e.f. 1st April, 2015, at the rate of 8% per annum till the date of this decree and for a period of three months from the date of this decree within which time the defendant company is expected to discharge its debt under the decree. However if the decretal amount is not paid within three months herefrom, with effect from the expiry of three months, the principal amount of Rs. 1.48 crores shall incur interest @ 15% per annum. Further, if the payment of the entire decretal amount is made within three months, the plaintiff company shall not be entitled to any costs of the suit; however if no such payment is made, the plaintiff company shall also be entitled to costs of this suit. Counsel's fee assessed at Rs. 55,000/-. Application disposed off.
|