Gujarat High Court
Dayaldas vs Union on 21 July, 2008
Bench: K.A.Puj, Rajesh H.Shukla
SCA/8657/2008 5/ 6 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 8657 of 2008 With SPECIAL CIVIL APPLICATION No. 8658 of 2008 With SPECIAL CIVIL APPLICATION No. 8660 of 2008 ========================================================= DAYALDAS DIYALDAS - Petitioner(s) Versus UNION OF INDIA & 2 - Respondent(s) ========================================================= Appearance : MR RK PATEL for Petitioner(s) : 1, DS AFF.NOT FILED (N) for Respondent(s) : 1 - 2. MRS MAUNA M BHATT for Respondent(s) : 3, MR MANISH R BHATT for Respondent(s) : 3, ========================================================= CORAM : HONOURABLE MR.JUSTICE K.A.PUJ and HONOURABLE MR.JUSTICE R.H.SHUKLA Date : 21/07/2008 ORAL ORDER
(Per : HONOURABLE MR.JUSTICE K.A.PUJ) The present petitions have been filed under Art. 226 of the Constitution of India for the prayers, inter alia, declaring the provisions of Sec. 245HA of the Income-tax Act, 1961 ('the Act' for short) ultra vires of the Constitution and also for declaration that the applications filed by the petitioners before the Settlement Commission are not abated. In the alternative, it is also prayed that the provisions of Sec. 245HA may be read down or watered down so that the settlement application of the assessee to whom no fault can be attributed for non disposal of such application before 31.3.2008 (the amendment made by the Finance Act, 2007) is abated. The interim prayers are also prayed that the respondents may be restrained from commencing any proceedings in relation to the assessment years in respect of which the settlement applications have been made by the petitioners and pending for final disposal.
Facts
2. The facts in a nutshell are that the aforesaid petitions have been filed under Art. 226 of the Constitution of India for the aforesaid prayers for declaring the provisions of Sec. 245HA of the Income-tax Act, 1961 ultra vires inasmuch as the provision mandates the abatement of the application made under sec. 245 of the Act in respect of which the order under sub-sec. (4A) of sec. 245 has not been passed within the prescribed time specified under sec. 245D of the Act.
3. The case of the petitioners, briefly stated, are that the Income-tax Department had carried out search and seizure operation in pursuance of which, ultimately, the settlement application before the Settlement Commission has been filed at Annexure-A and also offered for payment of the tax before the Settlement Commission for which details have been stated in the petition. Therefore, pursuant to the settlement application filed by the petitioners, the petitioners were under bona fide impression that as all formalities have been complied with and were awaiting the settlement applications to be taken up for final hearing.
4. However, pursuant to the amendment brought about by Finance Act, 2007 by which Sec. 245HA of the Act has been inserted which provide for abatement of the application under sec. 245C in respect of which the order is not made under sec. 245D(4) within the specified period. Therefore, pursuant to the amendment brought about by Finance Act, 2007 in Sec. 245, the Settlement Commission has not disposed of the settlement applications by final order as required under the law on or before 31.3.2008. It is in these circumstances, pursuant to the amendment in the Finance Act, 2007, the proceedings before the Settlement Commission would stand abated, which is unfair.
5. Therefore, it is contended that the petitioners are entitled to have the application disposed of on merits once the settlement applications are admitted by the Settlement Commission. It has also been contended that pursuant to the amendment brought about by the Finance Act, 2007 in Sec. 245D(4) r/w sec. 245HA of the Act which deals with, ýSabatement of proceedings before the Settlement Commissionýý and in light of the amended provision with effect from 1.6.2007, the proceedings are abated which is the bone of contention and therefor the present petitions have been filed. It has also been contended that once the settlement application has been filed after complying with all the formalities including payment of income-tax, the Settlement Commission as an authority responsible for settlement of cases under the Act, is bound to dispose it of on merits and therefore the amendment brought about for the abatement of the pending proceedings before the Settlement Commission is unconstitutional and bad in law.
6. Learned Counsel Mr. R.K. Patel appearing for the petitioners has submitted that the issue involved in the present petitions is identical as in the case of Comed Laboratories Ltd. & ors. v. Union of India. He has further submitted that the subject-matter of the present petition is pending before the Hon'ble Apex Court and the petitioners are agreeable to abide by the outcome of the petition which is pending before the Hon'ble Apex Court.
7. In view of this statement made by learned counsel Mr. R.K. Patel on instructions and as the Hon'ble Apex Court is seized of the matter involving the same issue and when the petitioners as well as the learned Standing Sr. Counsel for the Revenue Mr. M.R. Bhatt are agreeable to abide by the outcome of the decision of the Hon'ble Apex Court, we are of the view that no useful purpose would be served by keeping the petitions pending inasmuch as the decision/law declared by the Hon'ble Apex Court shall apply to the present case also.
8. Therefore, the present petitions deserve to be disposed of with a direction that the petitioner as well as the respondents shall abide by the outcome of the writ petition (Civil) No. 113 of 2008 and other matters pending before the Hon'ble Apex Court.
9. It is further directed that till the Hon'ble Apex Court decides the issue which is raised in the present petition, the assessing authorities and the appellate authorities under the Income-tax Act, 1961 shall not take up the matters which are to be treated as pending before the Settlement Commission and disposal of this petition on the above ground shall not come in the way of the Settlement Commission in disposing of the matters before it in accordance with law.
10. It is also required to be mentioned that this Court has also taken the similar view in Special Civil Application Nos. 5079, 5082 and 5083 of 2008 decided on 23.6.2008 as well as Special Civil Application Nos. 4941 and 5057 of 2008.
11. Accordingly, the present petitions stand disposed of. Liberty to revive the petitions in case of necessity by filing a note before the Registry.
(K.A. Puj, J.) (R.H. Shukla, J.) (hn)