TMI Blog2011 (9) TMI 159X X X X Extracts X X X X X X X X Extracts X X X X ..... ot mean that the issues long closed, rights foregone years or decades back can be reopened, re-agitated or reclaimed on the basis of such decisions of the Apex Court. After more than four and half years of the order of the Settlement Commission, which the petitioners never challenged in the interregnum must be held to be belated. - Decided against the assessee. - 14055 of 2011, 14056 of 2011, 14066 of 2011, 14324 of 2011 - - - Dated:- 27-9-2011 - MR.JUSTICE AKIL KURESHI, MS JUSTICE SONIA GOKANI, JJ. MR MANISH J SHAH for Petitioner(s) COMMON ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE AKIL KURESHI) These writ petitions arise out of similar factual background. Having been heard together they would stand disposed of by this common judgment. 2. For the purpose of this judgement facts arising in Special Civil Application No.14055 of 2011 may be noticed. The petitioner is an income tax assessee having permanent account number. He is being assessed in status as an individual. On 16th June 1995 the petitioner preferred an application before the Settlement Commission for the assessment years, including assessment years 1992-93 to 1994-95. The same was registere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out any protest or murmur. 6. The petitioner not only accepted the order of the Settlement Commission, also paid the principal amount with interest as provided by the Settlement Commission in the said order and as calculated and worked out by the Assessing Officer while giving effect to the order of the Settlement Commission. 7. For a long time thereafter the petitioner raised no issue or dispute with respect to the order of the Settlement Commission or the demand of interest contained in such order. However, for the first time by filing the present petition on or around 14th September 2011 the petitioner has prayed that direction for payment of interest u/Sec.234B and 234C of the Act upto the date of order u/Sec.245D(4) contained in the order passed by the Settlement Commission be quashed. As a consequence thereof, the order passed by the Assessing Officer charging interest for the period between 14th May 1996 to 16th March 2007 be also set aside. 8. The prayer of the petitioner is based primarily on the decision of the Apex Court in the case of Brijlal and others reported in (2010) 328 ITR 477 in which it is held that such interest can be charged only upto the date en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench, the benefit thereof must flow to the petitioner. To our query as to upto what extent such issues could be reopened once not having pursued by individuals, counsel submitted that there should no time limit or in other words such issues can be and should be permitted to be reopened after without any reference to time and even decades together. It is this bold assertion of the counsel for the petitioner which worries us. We have examined the case law presented before us. We have also taken into consideration several other authorities on the point. 11. On behalf of the petitioner counsel relied on the following judgments: 12. In the case of Brijlal and others (supra) wherein five Judge Bench of the Apex Court held that in settlement cases interest u/Sec.234B of the Act can be charged only upto the order u/Sec.245D(1) of the Act and not upto the date of order of settlement u/Sec.245D(4). The Apex Court also concluded that the Settlement Commission cannot reopen its concluded proceedings by invoking Sec.154 of the Act to levy interest u/Sec.234B. We may notice that the Apex Court distinguished the decision in the case of Ghaswala (supra) observing that the said decision w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge Ltd. (305 ITR 227) wherein the Apex Court once again in the background of the application for rectification of mistakes observed that a patent, manifest and self-evident error which does not require elaborate discussion of evidence or arguments to establish it can be said to be an error apparent on the face of the record and can be corrected by exercising certiorari jurisdiction. 17. Reliance was also placed on the decision of the Apex Court in the case of Syed Yakoob v. K.S. Radhakrishnan [(1964) 5 SCR 64] which pertain to the jurisdiction of the High Court in issuing writ of certiorari for correcting errors of jurisdiction committed by inferior courts or Tribunals. 18. Reliance was also placed on the decision in the case of Thanthi Trust v. Income-Tax Officer (177 ITR 307) of the Madras High Court. Entertaining the writ petition challenging the reopening of the assessment the Bench held that the writ was maintainable for the limited purpose of deciding jurisdictional issue. In the facts of the case, it was also observed that the assessee could not be denied relief on the ground of delay. 19. Reliance was also placed on the decision in the case of Skycell Communicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plication for rectification is still not maintainable, levy of interest is declared illegal and excess amount recovered must be refunded. 24. We have already noticed that the orders were passed by the Settlement Commission more than four and half years back. The Assessing Officer had also passed orders giving effect to such order of Settlement Commission shortly thereafter. The petitioner had paid not only the principal, but also the interest as directed by the Settlement Commission and as calculated by the Assessing Officer without protest. All this happened nearly more than four and half years before filing of the petition. 25. It is well known that a writ petition under Article 226 of the Constitution of India is not governed by any rigid law of limitation. It is, however, equally well settled that the writ petition cannot be filed after indefinite period of cause of action arising without any explanation for delay. In other words, delay and laches would be the grounds on which the Courts would ordinarily refuse to exercise writ jurisdiction. 26. As noted earlier, the only ground stated in the petition to explain the delay was that the law with respect to the chargea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a person who approaches the writ court under Article 226 of the Constitution is now well settled. They are: (1) there is no inviolable rule of law that whenever there is a delay, the court must necessarily refuse to entertain the petition; it is a rule of practice based on sound and proper exercise of discretion, and each case must be dealt with on its own facts. (2) The principle on which the court refuses relief on the ground of laches or delay is that the rights accrued to others by the delay in filing the petition should not be disturbed, unless there is a reasonable explanation for the delay, because court should not harm innocent parties if their rights had emerged by the delay on the part of the petitioners. (3) The satisfactory way of explaining delay in making an application under Article 226 is for the petitioner to show that he had been seeking relief elsewhere in a manner provided by law. If he runs after a remedy not provided in the Statute or the statutory rules, it is not desirable for the High Court to condone the delay. It is immaterial what the petitioner chooses to believe in regard to the remedy. (4) No hard and fast rule, can be laid down in this regard. Every ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made must repay it and in that respect High Court had the power in exercise of writ jurisdiction to enforce such rights and to other consequential reliefs by ordering repayment of money realized by the Government without authority of law. The Apex Court, however, was of the opinion that at the same time proceedings under Article 226 of the Constitution was not intended to supersede completely the modes of obtaining relief by an action in a civil court or to deny defence legitimately open in such actions. It was observed that relief under Article 226 was discretionary in nature. The Apex Court was of the opinion that though the Limitation Act do not apply to the writ proceedings under Article 226, however, the maximum period fixed by the Legislature as a time within which the relief by a suit in a civil court must be brought may ordinarily be taken to be a reasonable standard by which delay in seeking remedy under Article 226 can be measured. The Apex Court held and observed as under:- 21. The learned Judges appear to have failed to notice that the delay in these petitions was more than the delay in the petition made in Bhailal Bhai's case out of which Civil Appeal No. 362 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial Leave Petitions in the cases of M/s. Ripal Kumar Co., and M/s. H. Patel Co., could by itself, be construed as the imprimatur of this Court on the correctness of the decisions sought to be appealed against--there is one more ground which basically sets the present case apart. Petitioners are re-agitating claims which they had not pursued for several years. Petitioners were not vigilant but were content to be dormant and chose to sit on the fence till somebody else's case came to be decided. There case cannot be consideration on the analogy of one where a law had been declared unconstitutional and void by a Court, so as to enable persons to recover monies paid under the compulsion of a law later so declared void. There is also an unexplained, inordinate delay in preferring this writ petition which is brought after almost an year after the first rejection. From the orders in M/s. Ripal Kumar Co. 's case and M/s H. Patel Co. 's case it is seen that in the former case the application for revalidation and endorsement was made on 12.3.1984 within four months of the date of the redemption certificate dated 16.11. 1983 and in the latter case the application for revalidation was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of a number of years. The petitioner's contention that the ground on which a statute was struck down was not within his knowledge and therefore he could not pursue it before the Apex Court would not stand. It was observed by Hidayatullah, J. concurring with the view of Sikri, J. and Hegde, J. (which found the majority view) that it was the duty of the petitioner to have brought the matter before the Supreme Court for consideration. In any event, having set the machinery of law in motion, he could not abandon it to resume it after a number of years. 39. In the case of Rafeeqan (dead) by LR v. Hussan Bano reported in (2010) 9 SCC 23 the Apex Court was of the opinion that the view of the High Court was erroneous in view of subsequent Constitution Bench judgement in the case of Nathi Devi reported in (2005) 2 SCC 271. It was a case where the decision of the Delhi High Court which held the view different from what the Supreme Court propounded in the case of Nathi Devi was not challenged by the person aggrieved of such decision. However, the Apex Court was of the opinion that by virtue of the decision of the Constitution Bench in the case of Nathi Devi and in view of the mandate o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 17(1)(c) of the Limitation Act, 1963, the period of limitation for making such a claim for refund, whether by way o fa suit or by way of a writ petition, is three years from the date of discovery of such mistake of law? Kanhaiya Lal is understood as saying that such a course is permissible. Later decisions commencing from Bhailal Bhai have held that the period of limitation in such cases is three years from the date of discovery of the mistake of law. With the greatest respect tot he learned Judges who said so, we find ourselves unable to agree with the said proposition. Acceptance of the said proposition would do violence to several well accepted concepts of law. One of the important principles of law, based upon public policy, is the sanctity attaching to the finality of any proceeding, be it a suit or any other proceeding. Where a duty has been collected under a particular order which has become final, the refund of that duty cannot be claimed unless the order (whether it is an order of assessment, adjudication or any other order under which the duty is paid) is set aside according to law. So long as that order stands, the duty cannot be recovered back nor can any claim for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udge Bench in Kamala Mills following the principles enunciated in Firm Illuri Subbayya Chetty the words any assessment made under this Act are wide enough to cover all assessments made by the appropriate authorities under the Act whether the assessments are correct or not and that the words an assessment made cannot mean an assessment properly and correctly made. It was also pointed out in the said decision that the provisions of the Bombay Sales Act clearly indicate that all questions pertaining to the liability of the dealer to pay assessment in respect of their transactions are expressly left to be decided by the appropriate authorities under the Act as matters falling within their jurisdiction. Whether or not a return is correct and whether a transaction is exigible to tax or not are all matters to be determined by the authorities under the Act. The argument that the finding of the authority that a particular transaction is taxable under the Act is a finding on a collateral fact and, therefore, resort to civil court is open, was expressly rejected and it was affirmed that the whole activity of assessment beginning with the filing of the return and ending with the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where else in the world. Article 265 surely could not have been meant to provide for this. We are, therefore, of the clear and considered opinion that the theory of mistake of law and the consequent period of limitation of three years from the date of discovery of such mistake of law cannot be invoked by an assessee taking advantage of the decision in another assessee's case. All claims for refund ought to be,l and ought to have been, filed only under and in accordance with Rule 11/Section 11-B and under no other provision and in no other forum. An assessee must succeed or fail in his own proceedings and the finality of the proceedings in his own case cannot be ignored and refund ordered in his favour just because in another assessee's case, a similar point is decided in favour of the manufacturer/assessee. (See the pertinent observations of Hidayatullah, C.J. In Tilokchand Motichand extracted in para 46.) The decisions of this Court saying to the contrary must be held to have been decided wrongly and are accordingly overruled herewith. 108(iv) It is not open to any person to make a refund claim on the basis of a decision of a court or tribunal rendered in the case of another ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd others v. State of Punjab and others reported in AIR 1967 SC 1643. It was thereafter sparingly but on some occasions applied in subsequent cases. When the decision in the case of Mohammad Ramjankhan (AIR 1991 SC 471) was rendered, the Apex Court was of the opinion that till the time of requirement of supply of a copy of the enquiry report to a delinquent Government servant facing departmental enquiry was settled by the Larger Bench, the issue was not free from doubt. In this background the Apex Court made the decision in case of Mohammad Ramjankhan applicable prospectively observing: Therefore, the conclusion to the contrary reached by any two-Judge Bench in this Court will also no longer be taken to be laying down good law, but this shall have prospective application and no punishment imposed shall be open to challenge on this ground. 44. The decision in case of Mohammad Ramzankhan and the effect of its prospective application came up for consideration before the Supreme Court in the case of Managing Director ECIL v. B. Karunakar (AIR 1994 SC 1074). Majority opinion was expressed in following terms: However, it cannot be gainsaid that while Mohd. Ramzan Khan's case ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecomes law of the land and is applicable to all pending cases or the cases which may arise thereafter. However, judgement or a decision not made applicable prospectively would not mean that the issues long closed, rights foregone years or decades back can be reopened, re-agitated or reclaimed on the basis of such decisions of the Apex Court. 45. Majority of the decisions brought to our notice by the counsel for the petitioners arose in the background of rectification applications filed before various authorities or the Tribunal by the assessees concerned. Such rectification applications have a time limit, beyond which, the orders cannot be sought to be corrected. Under the Income Tax Act as is well known the period of four years is prescribed for permitting rectification of an order passed by the Assessing Officer or C.I.T. (Appeal) or that of the Tribunal. It was in this background, Courts have held that any pronouncement of law unequivocally made by the jurisdictional High Court or Apex Court would permit the assessee to seek rectification of an order which may be in conflict with such a decision. Thus, the terminal point for going backwards is provided in the provisions of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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