High Court Of Gauhati
CIT vs. Williamson Tea (Assam) Ltd. (No. 2)
Section : 260A
Amitava Roy And Dr. Mrs. I. Shah, JJ.
IT Appeal No. 4 Of 2012
March 6, 2012
JUDGMENT
Amitava Roy, J. – Whereas the interim application (registered as M. C. No. 1914 of 2010) is for condonation of delay of 286 days in filing the accompanying appeal under section 260A of the Income-tax Act, 1961 (for short hereafter referred to as “the Act”), the review petition seeking recall of the order dated June 16, 2010, passed in M. C. No. 1914 of 2010, rejecting the appeal on the ground that as on the date this court had no power to condone such delay under section 5 of the Limitation Act, 1963 (for short hereafter referred to as “the Act, 1963”).
2. Register the review application.
3. We have heard Mr. S. Sarma, learned counsel for the applicant/review applicant and Dr. A. K. Saraf, senior advocate assisted by Ms. N. Hawelia, advocate for the opposite party.
4. The aforenoted appeal being barred by limitation, condonation of the delay involved was prayed for by the applicant. At the relevant point of time, i.e., on June 16, 2010, no power lay with the High Court under section 260A of the Act to condone such delay in filing any appeal thereunder. To this effect, a decision in CIT v. Williamson Tea (Assam) Ltd. [2009] 319 ITR 368 (Gauhati), was also rendered by a Division Bench of this court. The interim application was thus rejected.
5. Admittedly, thereafter, by the Finance Act, 2010, section 260A was amended by inserting sub-section (2A) therein with effect from October 1, 1998. The newly inserted sub-section (2A) reads as follows :
“(2A) The High Court may admit an appeal after the expiry of the period of one hundred and twenty days referred to in clause (a) of sub-section (2), if it is satisfied that there was sufficient cause for not filing the same within that period.”
6. By virtue of this amendment, the High Court was empowered to condone the delay in filing the appeal beyond the time prescribed in sub-section (2A) of section 260A, if it was satisfied that there was sufficient cause. Therefore, it is in this background that the instant review petition has been filed to recall the order dated June 16, 2010, and restore the interim application (registered as M. C. No. 1914 of 2010) for a fresh consideration on the merits in terms of the letter and spirit of section 260A(2A) of the Act.
7. Whereas, Mr. Sarma, has urged that in view of the retrospective amendment of section 260A occasioned by the Finance Act, 2010, empowering this court to entertain an application for condonation of delay with effect from October 1, 1998, the order dated June 16, 2010, suffers from error apparent on the face of record and is liable to be reviewed in the interest of justice, Dr. Saraf, has emphatically contended to the contrary. According to the learned senior counsel, if such a plea is entertained vis-a-vis cases finally closed, it would amount to expanding the contours of review jurisdiction on grounds inconceivable in law. Emphasizing that the power of review is not inherent and ought to be endowed by law. Dr. Saraf has urged that amendment of law with retrospective effect by no means can be brought within the purview of the grounds of review enumerated in Order 47, rule 1 of the Civil Procedure Code (hereafter referred to as “the Code”). The learned counsel has urged that though this court is bestowed with plenary jurisdiction to correct errors, in the interest of justice, the ground urged on behalf of the applicant is not one legally envisaged and thus the instant application for review ought to be rejected in limine.
8. The learned counsel for the parties have relied on the following authorities in support of their respective contentions :
“A.C. Estates v. Serajuddin and Co., AIR 1966 SC 935 ; Raja Shatrunji v. Mohammad Azmat Azim Khan [1971] 2 SCC 200 ; Surajmull Choteylal v. CIT [1978] 114 ITR 130 (Cal) ; India Carbon Ltd. v. CIT [2007] 3 GLT 339 and Review Petition No. 33 of 2010 (VIP Industries Ltd. v. CCE).
9. The factual backdrop as recited hereinabove, though in an abridged form is not in dispute. Admittedly, on June 16, 2010, in view of the unamended state of section 260A, this court hereunder had no jurisdiction to entertain any application for condonation of delay in filing an appeal beyond the period of time prescribed.
10. However, with the amendment of section 260A by the insertion of sub-clause (2A) the completion of the related statutory provision has undergone a radical change. Not only, by sub-clause (2A) as the above extract would reveal, the High court was equipped with the power to consider an application for condonation of delay, it was empowered as well to condone the same on being satisfied that there was sufficient cause, therefore. Admittedly, again, the amendment was provided a retrospective effect from October 1, 1998. By a legal fiction, therefore, the amended section 260A, as above, was on the statute book, with effect from October 1, 1998.
11. The apex court in A.C. Estates v. V. Serajuddin & Co. AIR 1966 SC 935, had disapproved the invocation of the power of review contemplated under Order 47 of rule 1 of the Code on the ground of some subsequent event.
12. That a subsequent decision by a court or a subsequent alteration of law is not a ground of review under Order 47 of the Code was enunciated by the Calcutta High Court in Surajmull Choteylal v. CIT [1978] 114 ITR 130 (Cal.) their Lordships held against the permissibility of reviewing an order by the High Court on a reference under the Income-tax Act, 1961, on the ground of a subsequent decision of the apex court overruling its earlier decision.
13. A Division Bench of this court in India Carbon Ltd. v. CIT [2007] 3 GLT 339 while dwelling on the distinction between the inherent power of the court and the power of review held that the former was an inbuilt reserve power and not an yield of an express conferment. It was observed that a court while exercising its inherent power cannot extend the same to cover other areas of corrective jurisdiction, e.g., appeal, revision, review, etc. Observing that such power is more circumscribed than the one for review, it was underlined that an order, in addition to being apparently erroneous must also be contrary to some fundamental principle of law or jurisprudential value in order to be amenable to correction in exercise of the inherent power. That an order passed in inadvertent departure from a core judicial procedure would also be amenable to such a jurisdiction was also high-lighted. Their Lordships held that failure of justice per se would not be the sole touchstone for the exercise of inherent power of correction as every judicial order was capable of being so perceived by an aggrieved party. The law was summed up by enuncing that self-evident erroneous order passed contrary to a fundamental judicial principle occasioning failure of justice would only be rectified by the exercise of the corrective jurisdiction inherent in court.
14. In Raja Shatrunji v. Mohammed Azmat Azim Khan [1971] 2 SCC 200, the apex court was seized with a fact situation strikingly identical to the one as obtains herein. The appellant therein had obtained a decree on October 4, 1939, under the U. P. Encumbered Estates Act, 1934, for a sum of Rs. 1,31,040-10 with cost and future interest. The heirs and legal representatives of the judgment debtor thereafter applied for reduction of the decretal amount under section 4 of the U.P. Zamindars’ Debt Reduction Act, 1952 (Act XV of 1953), which was rejected. An appeal was preferred against the same, which was heard on November 27, 1962 (XX of 1962), by the Full Bench of the Allahabad High Court, which sustained the dismissal. Soon thereafter, the U. P. Zamindars’ Debt Reduction Act, 1952, was amended by the U. P. Zamindars’ Debt Reduction (Amendment) Act, 1962, with effect from November 27, 1962, which incidentally, was the date on which the High Court had dismissed the appeal as above. It is, in this background that the judgment debtor (heirs of the original defendant), on February 20, 1963, filed an application for view of the order of the Full Bench of the High Court passed on November 27, 1962.
15. One of the questions raised before the apex court was whether, in the attendant facts and circumstances review of the judgment and order dated November 27, 1962, of the Full Bench of the Allahabad High Court was permissible, the amendment of the U. P. Zamindars’ Debt Reduction Act, 1952, with effect from the same date notwithstanding. Incidentally, the aforementioned amendment after receiving the assent of the President had been published in the Gazette dated December 4, 1962.
16. Their Lordships of the apex court on an analysis of the textual facts observed that on November 27, 1962, when the matter was heard by the Full Bench of the High Court, the amendment had not come into the statute book. It was, however, observed by noticing the nature of the amendment that the amended Act mandated that the amendments had taken effect as if the amendment Act had been in force on all material dates. The following excerpts from the decision of the apex court in State of Bombay v. Pandurang Vinayak, AIR 1953 SC 244, was relied upon :
“When a statute enacts that something shall be deemed to have been done, which in fact and truth was not done, the court is entitled and bound to ascertain for what purposes and between what persons the statutory fiction is to be resorted to and full effect must be given to the statutory fiction and it should be carried to its logical conclusion.”
17. The observations of Lord Asquith in East End Dwellings Co. Ltd. v. Finsbury Borough Council [1952] AC 109 to the following effect was also recalled :
“If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative, state of affairs had in fact existed, must inevitably have flowed from or accompanied it . . . The statute says that you must imagine a certain state of affairs ; it does not say that having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs.”
18. In the above backdrop, having regard to the facts and circumstances of the case, more particularly, the retrospective amendment to the law involved, their Lordships held that the Full Bench of the High Court ought to apply the legal fiction as it always stood. It was concluded that the rejection of the appeal in view of the amended law suffer from an error apparent on the face of the record, inasmuch as the law that was applied to render the decision sought to be reviewed was not the one, which was applicable. That the amendment was to confer benefit on the judgment debtor of the type of the appellant was also noticed.
19. Incidentally, the above view was relied upon by the High Court of Judicature of Bombay in R. P. A. No. 33 of 2010 in VIP Industries Ltd. v. CCE
20. In the above legal premises, we are constrained to hold that the observations made by the hon’ble Calcutta High Court disapproving the review under Order 47 of the Code on the basis of a subsequent judicial decision or an alteration of law lacks persuasion. This decision, though, rendered in the year 1978, was per incuriam, qua the one delivered by the apex court in Raja Shatrunji (supra). Having regard to the state of law as propounded in Raja Shatrunji (supra) we are of the view that the application for review has merit. The amended section 260A being, by virtue of a legal fiction on the statute book with effect from October 1, 1998, the order dated June 16, 2010, cannot be allowed to continue. In that view of the matter, the order dated June 16, 2010, referred to hereinabove is hereby recalled.
21. In view of this determination, M. C. No. 1914 of 2010 is restored. Having regard to the decision rendered by this court in CIT v. Williamson Tea (Assam) Ltd. [2012] 346 ITR 428 (Gauhati) the delay of 286 days in preferring the accompanying appeal is condoned. We may record that there is no wrangle at the Bar that the facts and circumstances constituting the explanation on behalf of the review applicant for condonation of delay in the instant case are absolutely identical to the one as existed in the reported decision. As a result, the review petition as well as the miscellaneous applications are allowed.
[Citation : 346 ITR 436]
