High Court Of Madhya Pradesh : Indore Bench
Gopaldas vs. Union Of India & Anr.
Sections 1998FA(No. 2) 90(2), 1998FA(No. 2) 91
Asst. Year 1993-94
S.L. Kochar, J.
Writ Petn. No. 946 of 2000
4th October, 2005
Counsel Appeared
S.C. Bagadiya with Chhabra, for the Petitioner : A.P. Patankar, for the Respondents
ORDER
S.L. Kochar, J. :
By this petition, the petitioner is claiming quashment of documents Annexs. P/9 and P/11 whereby the application of the petitioner under Kar Vivad Samadhan Scheme, 1998 (for brevity, referred as ‘KVSS’) was rejected for the asst. yr. 1993-94 by the respondent No. 2 on the ground that he did not deposit the required tax due on the basis of modified certificate issued under s. 90(1) of KVSS. He deposited the tax on 6th July, 1999 much after 30 days and by order Annex. P/11 passed by respondent No. 2, the respondent No. 2 rejected the representation Annex. P/10, dt. 31st Jan., 2000 submitted by the petitioner to respondent No. 2 for acceptance of application/declaration, since the tax was deposited within 30 days from the modified order/certificate (Annex. P/6) dt. 7th June, 1999 by respondent No. 2.
1. The factual matrix in short for deciding the dispute between the parties is that the petitioner is carrying on the business in the name and style of “Poonam Oil Industries” in Indore town. The respondent No. 1 introduced Finance Bill, No. 2 of 1998, regarding settlement of income-tax dispute called as KVSS. The petitioner, as per the provisions of KVSS, submitted declaration prior to the stipulated date, i.e., on or before 30th Dec., 1998 in respect of asst. yrs. 1988-89, 1989-90, 1990-91, 1991-92, 1992-93, 1993-94 and 1994-95 relating to his income-tax matters. The respondent No. 1 issued a certificate as per provision under s. 90(1) of KVSS, dt. 26th Feb., 1999 vide Annex. P/3. This consolidated certificate was issued for seven assessment years and the petitioner was directed to deposit the tax within 30 days from the date of this certificate.
2. After receiving the certificate (Annex. P/3) the petitioner submitted representation Annex. P/4, dt. 11th March, 1999 received by the Department on 12th March, 1999. According to him, as per s. 88 of the KVSS, rate of tax for an individual assessee was 30 per cent and the assessments were completed under s. 143(3) of the IT Act (for brevity hereinafter called as ‘the Act’), for all the seven assessment years and search was conducted on 7th Jan., 1995. Therefore, the search order was for the asst. yr. 1995-96. According to s. 88B of KVSS, the petitioner being a person other than a company or the firm would be required to pay tax @ 40 per cent of the disputed income for the asst. yr. 1995-96 in which the search was taken.
3. In reply to the said representation (Annex. P/4), the respondents issued another modified certificate under s. 90(1) of the KVSS, dt. 26th March, 1999 (Annex. P/5), and made correction for entry of tax due and the payment of tax for the asst. yrs. 1988-89, 1992-93 and 1994-95. For rest of the years i.e., 1989-90, 1990-91 and 1991-92 as also 1993-94, no change was made in this order. The petitioner was required to pay the tax as mentioned in the first certificate (Annex. P/3), dt. 26th Feb., 1999. In the second certificate (Annex. P/5) also, it was directed by the respondents to the petitioner to pay the tax within 30 days from the date of issuance of this (Annex. P/5) certificate. Thereafter, again the respondents have issued certificate (Annex. P/6) dt. 7th June, 1999 as per provision under s. 90(1) of the KVSS, and in this certificate the change was made only about amount of tax due to the tax liable to be paid by the petitioner for the asst. yr. 1988-89. Rest of the entries right from 1989 to 1995 for six assessment years remained the same. In the third certificate (Annex. P/6) also the same direction was given, i.e., deposit of the tax within 30 days from the date of certificate i.e., 7th June, 1999.
4.The petitioner deposited the tax for seven assessment years as per certificates Annexs. P/3, P/5 and P/6 issued by the respondents from time-to-time as under :
Asst. yrs. Amount Deposited on 1988-89
(16,959
+5,349)
24,506
0 (18,400
+6,106)
1 2,47,160
2 3,89,824
1989-9
1990-9
1991-9
1992-
91,956 31-3-
93
1999
1993- 6-7-
94 7,59,128 1999
1994- 11,74,874 31-3-
21,396
31-3-1999 6-7-
1999
31-3-19996-7-
1999
31-3-1999
31-3-1999
95 1999
The respondents issued immunity certificates (Annexs. P/7 and P/8) for full and final settlement of tax arrears as per provisions under s. 90(2) r/w s. 91 of the Finance (No. 2) Act, 1998, in respect of KVSS. Granting immunity certificate subject to the provisions contained in the Scheme instituting any proceedings for prosecution for any offence under the IT Act, 1961, this full and final settlement tax arrears certificate was given by the respondents to the petitioner for the asst. yrs. 1988-89, 1989-90, 1990-91, 1991-92, 1992-93 and 1994-95. Immunity certificate was not issued for payment of tax for the asst. yr. 1993-94, and in this respect a letter dt. 7th Jan., 2000 (Annex. P/9) transmitted to the petitioner by the respondents, wherein the respondent No. 2 has stated that for the asst. yr. 1993-94, the petitioner did not deposit the tax as per modified order dt. 26th March, 1999 (Annex. P/5) and as per provision under s. 90(2) of KVSS, the petitioner was required to pay the tax within 30 days from the modified order Annex. P/5, dt. 26th March, 1999, but he did not deposit the same. The tax for asst. yr. 1993-94 was deposited on 6th July, 1999 much after 30 days of the period of limitation. On receipt of this intimation (Annex. P/9), dt. 7th Jan., 2000, the petitioner submitted representation (Annex. P/10) to respondents, dt. 31st Jan., 2000 which was received on the same day. In this representation, the petitioner has submitted that the first certificate/order as per provision under s. 90(1) of the KVSS, was received by him (Annex. P/3) dt. 26th Feb., 1999. Thereafter, modified certificate received by him (Annex. P/5) dt. 26th March, 1999 and third consolidated order (Annex. P/6) dt. 7th June, 1999. Therefore, as per provision under s. 90(2) of the Finance Act and KVSS, for all the seven years, he deposited the demanded tax within 30 days and he prayed for correction of the mistake which was apparent on the face of record.
1. This representation (Annex. P/10) has been dismissed by reply/order (Annex. P/11) dt. 31st March, 2000 by respondents wherein it is stated that the assertion of the petitioner was not correct that he was required to pay taxes from the order passed on 7th June, 1999 (Annex. P/6). According to the respondents for asst. yr. 1993-94, order under s. 90(1) of KVSS, had become final on 26th March, 1999 by order (Annex. P/5) and because of clerical mistake in subsequent order dt. 7th Aug., 1999 passed under s. 90(1) of the KVSS (Annex. P/6), the petitioner was not entitled for getting the benefit for depositing the tax (because of clerical mistake) overriding the legal provisions of KVSS.
2. On dismissal of the representation by Annex. P/11, the petitioner approached this High Court and filed the instant petition. The petition was admitted in presence of the counsel for the respondents Shri A.P. Patankar on 20th Nov., 2002. Thereafter, from time-to-time, the petition was listed and today it is listed for final hearing. The respondents did not file any return, though two years and ten months have already rolled by. However, he advanced his arguments without filing any return. He was heard at length.
3. Having heard learned counsel for the parties and after perusing the entire record as well as the provisions of KVSS, this Court is of the opinion that refusal to issue immunity certificate as per provision under s. 90(2) r/w s. 91 for the asst. yr. 1993-94 on the ground that tax was not deposited within thirty days, is contrary to the documents available on record. The respondents have issued first consolidated order/certificate as per provision under s. 90(1) (Annex. P/3) for seven assessment years from 1988 to 1995, dt. 26th Feb., 1999. Thereafter, the petitioner submitted Annex. P/3, dt. 11th March, 1999 about calculation of tax at the rate of 40 per cent which could be levied for the assessment year in which the proceeding was held and the declaration filed for seven assessment years as no search proceeding was undertaken by the respondents in the premises of the petitioner. Therefore, under the Scheme for all the seven years, tax should have been assessed at 30 per cent. On the basis of this representation modified order was passed (Annex. P/5) dt. 26th March, 1999. In this order, modification was made for the asst. yrs. 1988-89, 1992-93 and 1994-95. Again the second modified order was passed (Annex. P/6) on 7th June, 1999 and the modification was made for the year 1988-89. The petitioner had deposited the tax for all the seven years as mentioned hereinabove (in para 5), and in para 5.10 internal p. 6 of the petition.
1. All the taxes were deposited in two dates i.e., 31st March, 1999 and 6th July, 1999. If period of limitation is computed from the last modified order dt. 7th June, 1999 (Annex. P/6), the taxes were deposited well within 30 days. But, the respondents, without assigning any cogent and valid reason, did not issue immunity certificate for the asst. yr. 1993-94 and according to them for this year, the final order (Annex. P/5) was passed on 26th March, 1999 and the tax was paid. In the order/letter (Annex. P/9) conveyed to the petitioner by the respondents as to how Annex. P/5, dt. 26th March, 1999 was final order for the asst. yr. 1993-94 whereas this order was a consolidated order for seven years from 1988 to 1995 was not shown.
2. On representation made by the petitioner (Annex. P/10), the respondents have dismissed it saying that inclusion of entry of tax for the asst. yr. 1993-94 in second modified order dt. 7th June, 1999 (Annex. P/6) was merely a clerical mistake. This Court is not able to understand as to how it can be considered as a clerical mistake. For the asst. yr. 1993-94, if it was a clerical mistake and the first modified order (Annex. P/5) dt. 26th March, 1999 was the final order for this year, then how for the year 1989-90 (Annex. P/5), it was not the final order in which the tax assessed and directed to be paid by the petitioner within 30 days from 26th March, 1999 of Rs. 24,506 and the same was the tax mentioned in the second modified order (Annex. P/6) for this year 1989-90 and tax was also paid by the petitioner on 6th July, 1999 in two instalments, i.e., 31st March, 1999 and 6th July, 1999 was not a final order and for this year 1989-90, the second modified order (Annex. P/6) dt. 7th June, 1999 was considered as a final order, whereas the tax assessed and required to be paid by the petitioner for this year 1989-90 was the same in all the three orders (Annexs. P/3, P/5 and P/6) amounting to Rs. 24,506 and the same is the position for the asst. yr. 1993-94 for which the issuance of immunity certificate has been refused by the respondents.
3. After issuance of certificate (Annex. P/3) under the provisions of the Scheme, each amended certificate has superseded the earlier certificate. Consequently the computation of period of 30 days shall be reckoned from the last certificate (Annex. P/6) dt. 7th June, 1999 and the petitioner has deposited the tax according to certificate within 30 days.
4. In the instant case, the respondents, after issuing certificate Annex. P/6 for seven assessment years, dt. 7th June, 1999, while issuing the immunity certificates Annexs. P/7 and P/8, also passed the order (Annex. P/9) under challenge whereby dismissed the declaration of the petitioner for the year 1993-94 without issuing show cause or affording opportunity of hearing to the petitioner which is contrary to the principles of law of natural justice and in this order (Annex. P/9), no reason has been assigned for not accepting the declaration for the year 1993-94 for which the modified order was already issued on 7th June, 1999 containing direction for depositing of the tax within 30 days and the same was also deposited by the petitioner. Therefore, this order is a nonspeaking order. The order (Annex. P/6) was issued for all the seven assessment years and as to how the only entry for asst. yr. 1993-94 was considered separately, is not defined in the order (Annex. P/9). The respondents are performing quasi-judicial function. Therefore, they are obliged to afford opportunity of hearing to the petitioner before passing the order of refusal of issuance of immunity certificate for the year 1993-94 and thereafter, should have passed a reasoned order. Observance of principle of audi alteram partem (hear the other side) and passing a reasoned order is the linchpin of administration of justice. [Also see : S.L. Kapoor vs. Jagmohan & Ors. AIR 1981 SC 136].
5. Learned counsel for the respondents, Shri Patankar has submitted that after receiving the notice of this petition and the date of admission of this petition i.e., 20th Nov., 2002, he met personally the CIT-I and II also and also supplied the copy of the petition and the Annexures annexed therewith by the petitioner and requested to contact him for preparing the return, but with no result and as such he could not file the return in the petition. Shri Patankar even without filing the return argued the matter at length and submitted vehemently that on perusal of all the three orders issued by respondents (Annexs. P/3, P/5 and P/6) the entry made for the year 199394 regarding payment of tax in the second modified order (Annex. P/6) dt. 7th June, 1999 was because of clerical mistake and all the three years appear to be written by the concerned person in handwriting in prescribed printed proforma. Therefore, the possibility of committing mistake cannot be ruled out.
1. Learned counsel for the petitioner has submitted that if according to respondents, the tax was deposited beyond the period of limitation, the petitioner should have afforded an opportunity of considering his case for condonation of delay in making payment under the Scheme. The learned counsel has placed reliance on the judgments rendered by the learned single Judge of the Principal Seat of Madhya Pradesh High Court in the case of Sardar Machhi Singh vs. CIT & Anr. (2000) 164 CTR (MP) 220 : (2000) 245 ITR 58 (MP). This judgment has been affirmed by the apex Court by order dt. 17th July, 2000 [245 ITR (St) 70] KVSS, and the judgment rendered by the Division Bench of Bombay High Court, Nagpur Bench, in the case of Vijay Om Prakash Bansal vs. CIT (2003) 179 CTR (Bom) 348 : (2002) 257 ITR 649 (Bom).
2. On going through the aforesaid decisions regarding condonation of delay, the same are not going to help the petitioner in the facts and circumstances of the present case because, if contention of the respondents is accepted regarding deposit of payment of tax within 30 days, from the first modified order/certificate (Annex. P/5) dt. 26th March, 1999 the tax was deposited on 6th July, 1999 which was after more than 90 days whereas the limitation was of 30 days. In the aforesaid judgments, in the case of Sardar Machhi Singh (supra) and Vijay Om Prakash (supra) the delay was only of one or two days and in the case of Sardar Machhi Singh (supra) on Saturday 25th March, 1999 was a bank holiday. 26th was Sunday and on 27th March, 1999, he deposited the payment in the bank. In this factual matrix, it could be said that the question involved in the case of Machhi Singh (supra) was the question of computation of period of 30 days as per provision under s. 10 regarding computation of time prescribed in the General Clauses Act, 1897, because, in the KVSS, no provision is available for computation of period of 30 days. 25th March was the 30th day and 26th was 31st day. Both were holidays. Therefore, the tax deposited on 27th could be considered well within the period of limitation and for this purpose, circular issued by the Government of India, dt. 3rd Sept., 1998, was also considered in the case of Smt. Laxmi Mittal vs. CIT (2000) 158 CTR (P&H) 41 : (1999) 238 ITR 97 (P&H) referred to in the case of Sardar Machhi Singh (supra).
3. In the case of Vijay Om Prakash Bansal (supra) on Saturday the petitioner went to deposit the tax in the Income-tax Office under the impression that because of special scheme, payment might be done to the Department but, it could not be deposited there. Thereafter, Sunday was holiday. Immediately on Monday, payment was made in the bank. Saturday was the last day of limitation and Sunday was holiday. Learned single Judge of this High Court in the case of Sardar Machhi Singh (supra) has considered that the provision of s. 90 will have to be read flexibly in the interest of assessee to furnish genuine explanation for the purposes of condonation of delay of one or two days in making payment.
4. I have given my anxious consideration to the submission made by Shri Patankar as well as the reasons assigned in the order (Annex. P/11) rejecting the representation of the petitioner for issuance of immunity certificates for the asst. yr. 1993-94 and I am of the view that in the second modified order dt. 7th Aug., 1999, if entry of payment of required tax for the asst. yr. 1993-94 appeared because of clerical mistake then how the entry of same amount of tax was made for the year 1989-90 showing payment of tax of Rs. 24,506 not only in the second revised order (Annex. P/6), dt. 7th June, 1999, but, in the first revised order dt. 26th March, 1999 (Annex. P/5) as well as in the first initial order (Annex. P/3) dt. 26th Feb., 1999 and the taxes were also paid in response to these three orders on 31st March, 1999 and 6th July, 1999.
1. The respondents have considered payment of tax within time on 6th July, 1999 for the asst. yr. 1989-90 and refused for the year 1993-94 without assigning any cogent and valid reason. Therefore, the orders (Annexs. P/9 and P/11) are hereby quashed and the respondents are directed to issue immunity certificate for the asst. yr. 1993-94 as per provision under ss. 90(2) and 91 of the KVSS.
2. There shall be no orders as to costs.
[Citation : 285 ITR 393]
