International Metro Civil ... vs R.K. Verma
2005 Latest Caselaw 1560 Del

JUDGMENT

T.S. Thakur, J.

Page 2162

1. The following two precise questions arise for consideration before us :-

(i) When  the  Court  directs  a  statutory  authority  to  pass an appropriate    order   on   a  pending  application,  does  the authority  concerned   commit contempt if the order that it   passes   is,   according  to the party aggrieved of the same, legally erroneous?
 

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(ii) What  is  the  remedy available  to  a party aggrieved of any such order.  In  particular, can the validity of the order be  assailed  by it by way of a miscellaneous application filed in the  proceedings  in  which  the direction for disposal was issued?
 

2.  The questions arise in the following factual backdrop :-
 

3. The petitioner is a joint venture constituted to undertake the construction of metro corridor between Central Secretariat to ISBT Kashmere Gate awarded to it by the Delhi Metro Rail Corporation. The joint venture is registered under the Delhi Sales Tax on Works Contract Act, 1999. It was for the year 2001-02 assessed under Section 16 of the Act aforementioned in terms of an order dated 31st March, 2003. The assessment order held the petitioner entitled to a refund of over Rs.6 crores which had been deducted at source on the mobilisation and other advances made to it. The petitioner made an application seeking refund of the said amount. According to the petitioner, the application remained unattended for sometime and was eventually rejected by the assessing authority in terms of its order dated 14th August, 2003. The petitioner's further case is that the assessing authority started making various queries about the refund ostensibly with a view to correcting an alleged error in the order of assessment. The authority with that objective appears to have initiated re-assessment proceedings on 4th September, 2003. Aggrieved, the petitioner challenged not only the initiation of the re-assessment proceedings but also the rejection of its application for the grant of refund in this Court in Writ Petition No. 869/2004. The relief prayed for in the said petition was in the following words :-

"A) direct the respondents to restore the refund application and issue the refund along with interest without any further delay;

B) nullify the re-assessment proceedings by vacating the notice for re-assessment issued on erroneous basis and meant for blocking the refund and frustrating the claim of interest;

C) pass any other order as this Hon'ble Court may deem fit in the interest of justice and in favor of the petitioner."

4. The petition was opposed by the respondents on several grounds including the ground that the re-assessment proceedings had been completed and the petitioner knew about the re-assessment order dated 15th January, 2004 passed by the assessing officer whereunder the dealer was directed to deposit a further sum of Rs.2,73,18,162/-. The counter affidavit filed on behalf of the respondents inter alia stated that since a final order of re-assessment had already been made, the petitioner's remedy lay in an appeal before the prescribed Appellate Authority and not in the writ jurisdiction of this court. Reliance in support of that submission was placed upon the decisions of the Supreme Court in A.V. Venkateswaran, Collector of Customs, Bombay v. Ramchand Sobhraj Wadhwani and Anr., and Titaghur Paper Mills Co. Ltd. and Anr. v. State of Orissa and Anr., 1983 (53) STC 315.

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5. The writ petition was eventually heard and disposed of by a Division Bench of this Court in terms of its order dated 20th July, 2004. A reading of the said order makes it manifest that this Court found the rejection of the application for refund to be unjustified and accordingly quashed the same. The Court went a step further and quashed even the re-assessment proceedings and remitted the matter to the Commissioner to pass "appropriate orders" on the refund application keeping in view the mandate of Section 30 of the Delhi Sales Tax Act which applies mutates mutants to proceedings under the Delhi Sales Tax on Works Contract Act, 1999. The operative portion of the order passed by this Court reads thus :-

"In view of what is stated herein above we quash the proceedings of re-assessment and the order of rejection of the application of refund. We direct the Commissioner to pass appropriate orders on the refund application keeping in view the mandate of Section 30 within a period of 15 days."

6. In compliance with the above directions, the Commissioner appears to have examined the record and passed a composite order dated 12th August, 2004 by which he invoked his powers under Sections 16 of the Delhi Sales Tax on Works Contract Act, 1999 readwith Section 46 of the Delhi Sales Tax Act, 1975 and issued a direction for revision of the order of assessment by the Zonal Assistant Commissioner concerned after providing adequate opportunity to the assessed to present its case. This direction of the Commissioner proceeded on a prima facie conclusion recorded by him that the petitioner assessed had suppressed the sales figures and furnished an incorrect and wrong return. The Commissioner was of the view that the petitioner dealer had suppressed its gross turnover amounting to Rs.1,48,02,00,662/- and that it had been granted exemption from tax on an amount of Rs.1,55,82,31,055/- on account of labour and the services without submitting proper documents besides other irregularities in the assessment order. The relevant portion of the order passed by the Commissioner reads as under :-

"It is, therefore, prima facie apparent that while furnishing the returns, the applicant has made suppressions of the sales and knowingly furnished incorrect and wrong returns. The dealer had filed the incorrect returns suppressing the GTO amounting to Rs. 1,48,02,00,662/- and had claimed, and also been granted the exemption from tax on the amount of Rs.1,55,82,31,055/- on account of labour and the services without submitting proper documents besides other irregularities in the assessment order. Moreover, the Assessing Authority did not even consider material on record and cross verify GTO and committed error in applying law in granting exemption from tax on amount of Rs.1,55,82,31,055/- allegedly being charges for services & labour; the assessment order passed is not only erroneous but also is prejudicial to the interest of the revenue. As such, the tax payable by the applicant has not been correctly assessed by the Assessing Authority correctly resulting in distortion of assessment of tax in the assessment order compromising the revenue of the State Government in view of the reasons explained above as also to arrive at the due claim of refund, the assessment order requires to be revised u/s 16 of the DST on Works Contract Act, 1999 read with section 46 of the DST Act, 1975."

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7. In so far as the application of the petitioner seeking refund was concerned, the Commissioner held that before the said application could be granted, the assessment order on the basis of which the same had been held itself, required revision by the Zonal Assistant Commissioner concerned. The Zonal Commissioner was accordingly directed to revise the order of assessment and thereafter take up the question of refund for consideration under Sub Rule 4 of Rule 29 of the Delhi Sales Tax Act, 1975 readwith Section 30 of the Delhi Sales Tax Act, 1975. This is evident from the operative part of the order made by the Commissioner which reads as under :-

"Therefore, in the light of the above, it is directed that the assessment order shall be revised by the concerned Zonal Assistant Commissioner who has been vested with the powers under Section 46 of the DST Act, 1975. The concerned Zonal Assistant Commissioner shall do so after providing adequate opportunity to the applicant to present his case and finalise the matter strictly within a period of one month from the date of this order. Thereafter, he shall take up the question of refund under sub-rule (4) of Rules 29 of the DST Rules, 1975 read with section 30 of the DST Act, 1975 and pass an order sanctioning the refund due, if any, to the applicant without any loss of time."

8. Aggrieved by the order aforementioned, the petitioner rushed to this Court with the present Contempt Petition and CM No. 9690/2004 filed in the disposed of Writ Petition No. 869/2004. The petitioner's case in the Contempt Petition as also in the Civil Miscellaneous Application filed by it was that the Commissioner had not complied with the order of this Court which, according to the petitioner, directed him to pass an order under Section 30 of the Delhi Sales Tax Act and to grant the refund prayed for. The petitioner found fault with the Commissioner's invoking Section 46 of the Act on the ground that the supervisory jurisdiction of the Commissioner was exercisable only in special cases to correct orders that were erroneous as well as prejudicial to the interest of the Revenue. The present was not, according to the petitioner, one such case to justify the Commissioner's act of exercising his supervisory powers and directing a revision of the assessment. Several other contentions were urged all intended to assail the finding recorded by the Commissioner that the assessment proceedings deserved to be revised.

9. On 20th August, 2004, when CM No. 9690/2004 came up before the Division Bench, the respondent was directed to deposit the amount of refund within a period of ten days which amount was then to be invested by the Registry in a short-term deposit till further orders. By another order passed on 20th September, 2004, the interest part of the entire amount was also directed to be deposited and the operation of the order passed by the Commissioner of Sales Tax dated 12th August, 2004 stayed.

10. In the accompanying contempt petition, a notice was issued to the respondent Commissioner in response to which the Commissioner has filed a short affidavit denying the averments made in the contempt petition and asserting that the order passed by him was in accordance with the provisions in the scheme of the Delhi Sales Tax Act and the rules framed there under. The affidavit further states that the direction of this Court was limited to Page 2166 passing an appropriate order on the refund application filed by the petition which order the Commissioner has passed. It is asserted that it was open to the Commissioner to scrutinise the accounts and make enquiries considered necessary before sanctioning the refund and that since irregularities and improprieties were noticed by the Commissioner in the assessment order itself, it was incumbent upon him to initiate action under Section 46 of the Act for correction of such errors and irregularities. Pending finalisation of the proceedings in revision, the refund application could not be heard and disposed of for the question as to what, if any, is the amount refundable to petitioner could arise for consideration only after re-assessment.

11. Appearing for the petitioner, Mr. Neeraj Kaul strenuously argued that the order passed by the Commissioner was mala fide and intended to derail the process which would have entitled the petitioner to a refund of the excess amount recovered from it. He argued that the invocation of the revisional powers under Section 46 of the Act by the Commissioner was only intended to somehow defeat the directions issued to him by this Court.

12. The Court had, according to the learned counsel, given a limited brief to the Commissioner, the scope of which the latter could not enlarge by invoking supervisory revisional powers under Section 46 of the Act. It was, therefore, a case in which the Commissioner was not only in contempt but the order passed by him could be quashed by this Court by entertaining the miscellaneous application filed for that purpose.

13. On behalf of the respondent, Mr. Arora, on the other hand, argued that the direction issued by this court was fully complied with and that the Commissioner had passed an order the correctness whereof could not be examined either in contempt proceedings or by way of CM filed in a disposed of matter. He submitted that while examining the application for refund, the Commissioner was entitled to look into the record and if in the course of such examination he came to the conclusion that the assessment order itself was suffering from any legal or procedural infirmities causing prejudice to the Exchequer, it was incumbent upon him to direct correction of such errors within the four corners of law. In as much as the Commissioner had done so, he committed no illegality nor was there an element of deliberate defiance of the order of this Court constituting any contempt.

14. We have given our anxious consideration to the submissions made before us. We shall deal with the two questions ad seratium.

15. There are two distinct facets that need to be satisfactorily established before an action in civil contempt can succeed. The first is that the direction which is alleged to have been violated is clear and unequivocal capable of no interpretation other than the one which the party complaining of contempt places upon it. The second aspect is that there must be a deliberate and contumacious defiance of such a direction. Action in contempt, it is fairly well-settled, does not follow as a matter of course or just for the asking. The power to punish is very wide but wider the power the greater the circumspection needed for exercise of the same. The Court has, therefore, in Page 2167 every case where contempt is alleged, to take an objective view of the matter constantly bearing in mind that the power to punish for the contempt is not intended to feed the ego of any litigant or be used as a lever to coerce a party into submission contrary to the law.

16. In Anil Ratan Sarkar and Ors. v. Hirak Ghosh and Ors. , the Supreme Court sounded a note of caution against the use of the power to punish for contempt in the following words :-

"Powers under the Act should be exercised with utmost care and caution and that too rather sparingly and in the larger interest of the society and for proper administration of the justice delivery system in the country. Exercise of power within the meaning of the Act of 1971 shall thus be a rarity and that too in a matter on which there exists, no doubt, as regards the initiation of the action being bona fide."

17. The Court further held that if two interpretations are possible and the action of the alleged contemnor pertained to one such interpretation, the act could not be treated as contumacious to call for action in contempt. The Court observed :

"Mere disobedience of an order may not be sufficient to amount to a "civil contempt" within the meaning of Section 2(b) of the Act of 1971 "the element of willingness is an indispensable requirement to bring home the charge within the meaning of the Act and lastly, in the event two interpretations are possible and the action of the alleged contemnor pertains to one such interpretation" the act or acts cannot be ascribed to be otherwise contumacious in nature. A doubt in the matter as regards the willful nature of the conduct if raised, question of success in a contempt petition would not arise."

18. To the same effect is the decision of the Supreme Court in Chhotu Ram v. Urvashi Gulati and Anr., , where the contempt alleged against the respondents was in the nature of disobedience of an order directing consideration of the case of the petitioner. The Court held that since no mandate had been issued to the respondents to promote the petitioner, the mere fact that upon consideration, the respondent could not be promoted, did not constitute contempt. Their Lordships quoted with approval the following observations made by Lord Denning in Bramblevale Ltd., Re, (1969) 3 All ER 1062 on the question of burden of proof in contempt cases :-

"A contempt of court is an offence of a criminal character. A man may be sent to prison for it. It must be satisfactorily proved. To use the time-honoured phrase, it must be proved beyond reasonable doubt. It is not proved by showing that, when the man was asked about it, he told lies. There must be some further evidence to incriminate him. Once some evidence is given, then his lies can be thrown into the scale against him. Page 2168 But there must be some other evidence ...... Where there are two equally consistent possibilities open to the court, it is not right to hold that the offence is proved beyond reasonable doubt."

19. Let us now examine the direction issued by this Court to the Commissioner. As noticed earlier, this Court had quashed the re-assessment proceedings and directed the Commissioner to dispose of the petitioner's application for refund by passing an appropriate order on the same in accordance with Section 30 of the Act. It is nobody's case that the order of this Court directed the Commissioner to simply refund the amount for if that was the intention, there was no question of directing the Commissioner to pass an appropriate order under Section 30. The direction in that event could as well be that the Commissioner shall refund the amount recovered in excess from the petitioner. It follows that the Commissioner was entitled to apply his mind to the application, scrutinise the record produced before him, to determine as to what, if any, is the correct amount to be refunded and to pass appropriate orders, if satisfied that such a refund was in law due to the assessed. The Commissioner accordingly summoned the relevant record and in his wisdom came to the conclusion that there were grave irregularities and improprieties in the assessment concluded by the assessing officer prejudicial to the interest of the Revenue. He, therefore, felt that far from granting a refund straightway, it was a case where the assessment itself deserved to be revised appropriately. Invoking his powers under Section 16 and Section 46 of the Delhi Sales Tax Act, he directed revision of the assessment order and held that since the assessment itself was under the process of revision, the question whether and if so what amount would be refundable to the petitioner can be decided only after the re-assessment proceedings are concluded. Even Section 30(6) of the Delhi Sales Tax Act envisages a situation where in the light of the pending appeal or further proceedings against the order giving rise to a refund, the Commissioner is of the opinion that grant of the refund was likely to adversely affect the Revenue. The Commissioner can in such a situation withhold the refund till such time he may determine. Sub-section 6 of Section 30 reads thus :-

"Where an order giving rise to a refund is the subject matter of an appeal or further proceeding or where any other proceeding under this Act is pending and the Commissioner is of opinion that the grant of the refund is likely to adversely affect the revenue, the Commissioner may withhold the refund till such time as the Commissioner may determine."

20. Having invoked his powers under Section 46 of the Act, the Commissioner could defer the consideration of the application till such time the revisional proceedings concluded. It is difficult to see how the issue of such a direction could be said to be tantamount to committing contempt, especially when the order of this Court did not foreclose the legal options available to the Commissioner whether such options were by way of exercise of power of revision under Section 46 or an order under Section 30(6) deferring the refund till such time the revisional proceedings were concluded. So long as the direction issued by this Court that the Commissioner shall pass an appropriate order has been complied with and an order considered Page 2169 appropriate by the Commissioner issued, there is no element of deliberate or contumacious disobedience constituting contempt even assuming that the order that the Commissioner made pursuant to such a direction is, on scrutiny and challenge in appropriate proceedings, found to be erroneous. The essence of the direction issued by this Court simply required the Commissioner to pass an order which direction has been satisfied for an order has in fact been passed, thereby complying with and discharging the direction of the Court. It is after the said direction open to the party aggrieved of the same to seek redress in accordance with law in appropriate proceedings instituted for that purpose. Question No. 1 is, therefore, answered in the negative.

21. An order passed by a subordinate authority pursuant to a direction issued by competent court gives rise to a fresh cause of action for the party to agitate the matter in appropriate proceedings. Such an order may be assailable in appeal under the relevant enactment in which event the validity of the same can be questioned before the appropriate appellate forum. If the order is so palpably without jurisdiction or has been made in violation of the principles of natural justice, even a writ court may intervene without forcing the party concerned to resort to the appellate remedy. Suffice it to say that whatever may be the forum before whom the remedy lies, an order made by the subordinate authority cannot be assailed in a disposed of writ petition. The disposal of a petition puts an end to the proceedings before the Court. The Court becomes functus officio in relation to such proceedings except in cases where the aggrieved party brings a review petition or seeks extension of time for compliance with the directions issued by the Court or correction of any typographical or arithmetical mistake in the same. Except in those situations, there is no other legally recognised mode of invoking the jurisdiction of the Court that passed the order for any further or alternate relief. The proceedings, in the lis, must conclude with the final judgment delivered by the Court for otherwise there will be no finality to such proceedings and the matter can be kept alive and perennially green at the instance of one or the other party. The doctrine of finality of proceedings, therefore, requires that proceedings once concluded do not admit of any further directions except to the limited extent provided for in law.

22. I am supported in this regard by the decision of the Supreme Court in State of U.P. v. Brahm Datt Sharma, where their Lordships have summarised the legal position thus :-

"When proceedings stand terminated by final disposal of writ petition it is not open to the court to reopen the proceedings by means of a miscellaneous application in respect of a matter which provided a fresh cause of action. If this principle is not followed there would be confusion and chaos and the finality of proceedings would cease to have any meaning."

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23. Learned counsel for the petitioner, however, placed reliance upon the subsequent decision of the Apex Court in Delhi High Court and Another v. Atul Kumar Sharma, . The fact situation in the said case was totally different. After noting the decision in B.D. Sharma's case (supra), the Court observed :-

"When a very limited relief has been granted, we do not think any grave injustice would be caused to any party and, on the other hand, heartburn, if any, to a member of the staff would be assuaged. Hence, we do not think the order of the High Court in appeal before us calls for interference."

24. It is, therefore, evident that their Lordships did not strike a discordant note with the ratio of the decision in B.D. Sharma's case (supra). All that the Court said was that since a very limited relief had been granted by the High Court in the miscellaneous application filed before it causing no injustice to any party, there was no room for interference by the Supreme Court. The principle of law that a final disposal of the writ petition leaves nothing pending before the High Court and no miscellaneous application can be filed to revive the said proceedings remains unaltered by the decision in Atul Sharma's case (supra). Any attempt to reignite the proceedings in the disposed of writ petition would on that principle be legally impermissible. If the petitioner is aggrieved of either the invocation of the revisional powers or deferment of the refund, it has to seek an appropriate remedy against the same in accordance with law in separate proceedings. It cannot agitate the question of validity of the order, howsoever erroneous the same may appear to be, in the disposed of proceedings. Question No. 2 is answered accordingly.

25. In the result, Contempt Petition No. 381/2005 and CM No.7194/2005 are dismissed but in the circumstances without any orders as to costs. The amount deposited by the respondents pursuant to the orders passed by this Court on 20.8.2004 and 20.9.2004 shall stand refunded to the respondent in terms of the order separately passed by us on CM No. 9690/2004 and connected applications.