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Commissioner of Trade And Taxes And Ors. Versus M/s Ahluwalia Contracts (India) Ltd.

2017 (10) TMI 181 - SUPREME COURT OF INDIA

Amnesty Scheme - Validity of orders issued by the Designated Authority i.e. Additional Commissioner of Income Tax - Delhi Tax Compliance Achievement Scheme, 2013 - power and jurisdiction of the Designated Authority to issue the notice under clause 8 of the Amnesty Scheme - whether, in the present case, there has been any delegation of the said power which is vested in the Commissioner under the aforesaid clause 8? - Held that: - Clause 8(3) of the Amnesty Scheme will have no application to the p .....

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ply submitted by the assessee to the Show Cause Notice (27.01.2015) and the proceedings in adjudication Revenue on the one hand and the date of filing of the Writ Petition (4.3.2015) would permit us to infer that the conduct of the assessee in raising the issue in the writ petitions and not earlier was not entirely bonafide. - Whether a fresh notice under the aforesaid clause of the scheme can still be issued by the competent authority i.e. the Commissioner or the delegatee of the Commission .....

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, if the Revenue was so inclined. The High Court having failed to so act, we now correct the error and issue directions to enable the Revenue to issue a fresh notice to the assessee under clause 8 of the Amnesty Scheme, if it so desires and is so advised. - Appeal allowed - decided in favor of Revenue. - Civil Appeal No(s).15605-15606 of 2017, [Arising out of Special Leave Petition (Civil) No.9631-9632 of 2017], Civil Appeal No(s). 15608 of 2017, [Arising out of Special Leave Petition (Civil .....

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Appeals arising out of Special Leave Petition (Civil) Nos.9631-9632 of 2017 alone are being made as the facts in the other connected proceedings [i.e. Civil Appeals arising out of Special Leave Petition (Civil) Nos.10485/2017 and 9633/2017] are largely similar. 3. The challenge by the Revenue is to an order of the High Court of Delhi by which the High Court has allowed the writ petitions filed by the respondents - Assessees challenging the orders issued by the Designated Authority i.e. Addition .....

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r any other dues under the DVAT Act relating to any period ending before 1st April, 2013. 5. In exercise of powers under Section 107 of the DVAT Act, an Amnesty Scheme was notified by the GNCDT on 20th September, 2013. Clause 2(c) of the Amnesty Scheme which defines the 'designated authority'; clause 4 which delineates the procedure for making declaration and payment of tax dues; clause 5 which deals with immunity from interest, penalty and other proceedings; and the provisions of clause .....

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to the designated authority on or before the 31st day of January 2014 in Form DSC-1 appended to this notification. (2) The designated authority shall acknowledge the receipt of declaration in Form DSC-2 appended to this notification, within a period of fifteen working days from the date of receipt of the declaration. (3) The declarant shall pay not less than fifty per cent of the tax dues declared under sub-clause (1) along with the declaration and submit proof of such payment to the designated .....

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re an unregistered dealer has made declaration referred to in sub-clause (1) of this clause, such dealer shall obtain registration and pay net tax for the period from 1 day of April, 2013 to the date of regisration and furnish return in Form DVAT-16 for that period along with proof of payment in Form DVAT-20 to the designated authority at the time of furnishing of declaration under this Scheme. Such a dealer shall be eligible for immunity under clause 5 ofteh Scheme for late payment of such tax .....

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dealer who has not taken registration shall obtain registration prior to filing of declaration as referred in sub-clause (1) of clause 4. Likewise, a person who is responsible for making deduction of tax under section 36A of the Act, shall obtain a Tax Deduction Account Number (TAN), if not already obtained. *** *** *** 5. Immunity from interest, penalty and other proceedings.-(1) Notwithstanding anything contained in any provision of the Scheme, the declarant, upon payment of the tax dues decl .....

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the Delhi Tax on Entry of Motor Vehicles into Local areas Act, 1994 (Delhi Act 4 of 1995), in relation to the tax dues declared by the declarant; and from penalty and prosecution for non-registration and non-furnishing of returns in time. Explanation.- For the purpose of this sub-clause, the term declarant shall include- (i) in relation to the declarant being a contractee, who has awarded the works contract under section 36A(1) of the Act, his immediate contractor to whom he has awarded the wor .....

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lause (1) of clause 4 shall become conclusive upon issuance of acknowledgement of discharge under sub-clause (7) of clause 4 and no matter shall be reopened/ reassessed/ reviewed thereafter in any proceedings under this Scheme or under the Act before any authority or court relating to the period covered by such declaration to the extent of tax dues declared by the declarant. (3) All statutory appeals/ revisions pending before quasi-judcial forums upto the stage of Tribunal shall be deemed to hav .....

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vide a declaration under the scheme shall be kept confidential and shall not be used except under the Scheme and the same shall not be shared with any other person/ government department/agency. *** *** *** 8. Failure to make true declaration.- (1) Notwithstanding anything contained in clause 5 of the Scheme, where the Commissioner has, for a period beginning from 1st April, 2009, reasons to believe that the declaration was false in material particulars, he may, for reasons to be recorded in wr .....

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if that dealer had never made declaration under this Scheme. However, the dealer shall be entitled to the credit of tax paid by him under this Scheme; and (ii) such dealer may be proceeded under sub-section (2) of section 89 of the Act for furnishing of false declaration. (3) No notice shall be issued under sub-clause (1) of this clause after the expiry of one year from the date of declaration. 6. There is no dispute between the parties that on the basis of the declaration filed by the responde .....

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o the jurisdiction of the Additional Commissioner to issue the show cause notice under clause 8. The adjudication was finalized by order dated 11th February, 2015 which was served to the Assessee. The Assessee then filed the writ petitions in question before the High Court contending, inter alia, that the show cause dated 16th January, 2015 was unauthorized and without jurisdiction inasmuch as the power to issue such notice under clause 8 is vested with the Commissioner and the same had not been .....

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4 and 28th February, 2014, respectively, issuance of any further/fresh show cause notice was time barred. Aggrieved the Revenue is in appeal before this Court. 7. Shri Maninder Singh, learned Additional Solicitor General appearing for the Revenue has vehemently contended that the Government Order dated 30th April, 2014 contains a clear delegation of the power under clause 8 of the Amnesty Scheme by the Commissioner to the Designated Authority. The power of disposal of the application received un .....

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ll times. 8. The above contentions are contested by Shri S. Ganesh, learned Senior Counsel appearing for the respondents - Assessees who has urged that keeping in mind the necessity of finality of decisions under the Amnesty Scheme, the power of reopening the concluded cases by issuing show cause notices has been conferred on a higher authority i.e. the Commissioner. The said power has to be distinguished from the power to decide an application filed, which is vested in the designated authority .....

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d issue is primarily a question of law which goes to the root of the matter the question could always have been raised before the High Court. The same having been so raised and answered by the High Court, the answer provided needs to be dealt with by this Court on merits and ought not to be foreclosed merely on the ground that the respondents - Assessees had not raised the same in the course of the adjudication of the show cause notice. Learned Senior Counsel has referred to the provisions of cl .....

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t the question of issuance of any fresh/revised notice does not arise. 9. On the rival contentions, two issues arise for consideration in the present appeal. 10. The first relates to the power and jurisdiction of the Designated Authority to issue the notice under clause 8 of the Amnesty Scheme. Related, is whether, in the present case, there has been any delegation of the said power which is vested in the Commissioner under the aforesaid clause 8. 11. The second issue arising would depend on an .....

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issioner as may be notified by the Commissioner would be a designated authority under the Scheme. 13. Clause 4 of the Scheme requires a declaration of the tax due to be made to the designated authority and, thereafter, following the procedure prescribed by the various sub-clauses of clause 4, the Designated Authority is empowered to issue the acknowledgment of discharge of dues under clause 4 (7) of the Scheme. 14. Under clause 8 of the aforesaid scheme, the Commissioner is vested with the power .....

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f discharge on due satisfaction. The said power to hear and decide applications, by no means, would include the power to reopen a decided matter which is what clause 8 specifically contemplates. The Government order dated 30th April, 2014 relied upon by the Revenue as a delegation of the power under clause 8, on a plain reading thereof, is only an empowerment of a particular Additional Commissioner of a particular Zone (a Zone may have several Additional Commissioners) to hear and decide applica .....

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e High Court on the said question. 15. This will bring us to a consideration of the second issue arising in the case details of which have already been mentioned in preceding paragraphs of the present order. 16. The declarations in the present case were issued to the assessee on 18th February, 2014 and 28th February, 2014 respectively. The show cause notice under Clause 8 was issued on 16th January, 2015. The reply was submitted by the respondent-assessee on 27th January, 2015. The adjudication .....

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after the period of one year from the date of declaration was over that the writ petition was filed wherein the question of jurisdiction of the Additional Commissioner was raised for the first time. It is in these facts that the High Court took the view that as the period of limitation prescribed by Clause 8(3) was over, fresh proceedings stood barred by time. 17. While it is correct that the failure to raise the issue of jurisdiction by the assessee will not necessarily clothe the Additional C .....

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take on the part of the Additional Commissioner in invoking jurisdiction under Clause 8 of the Amnesty Scheme. The question that looms large before the Court is that whether in such a situation the assessee should be allowed to raise the question of limitation and defeat the claim of the revenue to proceed afresh in the matter on that basis. 18. Dealing with a somewhat similar situation that arose before this Court in Grindlays Bank Ltd. vs. Income Tax Officer, Calcutta and Ors. (1980) 2 SCC 191 .....

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o obtain the quashing of the assessment order also. The character of an assessment proceeding, of which the impugned notice and the assessment order formed part, being quasi-judicial, the certiorari jurisdiction of the High Court under Article 226 was attracted. Ordinarily, where the High Court exercises such jurisdiction it merely quashes the offending order and the consequential legal effect is that but for the offending order the remaining part of the proceeding stands automatically revived b .....

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ugh in the former kind of case the High Court, after quashing the offending order, does not substitute its own order it has power nonetheless to pass such further orders as the justice of the case requires. When passing such orders the High Court draws on its inherent power to make all such orders as are necessary for doing complete justice between the parties. The interests of justice require that any undeserved or unfair advantage gained by a party invoking the jurisdiction of the court, by th .....

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registering his protest before the Income Tax Officer, and allowed an assessment order to be made in the normal course. In an application under Section 146 against the assessment order, it would have been open to him to urge that the notice was unreasonable and invalid and he was prevented by sufficient cause from complying with it and therefore the assessment order should be cancelled. In that event, the fresh assessment made under Section 146 would not be fettered by the bar of limitation. Se .....

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otice was a procedural lapse at best and one that could be readily corrected by serving an appropriate notice. It was not a defect affecting the fundamental jurisdiction of the Income Tax Officer to make the assessment. In our opinion, the High Court was plainly right in making the direction which it did. The observations of this Court in Director of Inspection of Income Tax (Investigation) New Delhi v. Pooran Mall & Sons (1975) 4 SCC 568 are relevant. It said: The Court in exercising its po .....

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ition because otherwise the party would get an unfair advantage. The power to quash an order under Article 226 can be exercised not merely when the order sought to be quashed is one made without jurisdiction in which case there can be no room for the same authority to be directed to deal with it. But in the circumstances of a case the court might take the view that another authority has the jurisdiction to deal with the matter and may direct that authority to deal with it or where the order of t .....

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uthority to deal with it again irrespective of the merits of the case. The point was considered by the Calcutta High Court in Cachar Plywood Ltd. v. ITO (1978) 114 ITR 379 (Cal) and the High Court, after considering the provisions of Section 153 of the Income Tax Act, considered it appropriate. while deposing of the writ petition, to issue a direction to the Income Tax Officer to complete the assessment which, but for the direction of the High Court, would have been barred by limitation. 19. Hav .....

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