The Commissioner Income Tax vs M/S Mmtc Of India
2009 Latest Caselaw 4293 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

                              Judgment reserved on: 18.09.2009
                              Judgment delivered on: 23.10.2009

+      CM NO. 11880/2008 in ITR 23/1989


THE COMMISSIONER INCOME TAX       ..... Petitioner
                 Through: Ms Rashmi Chopra, Advocate


                  versus

M/S MMTC OF INDIA                           ..... Respondent

Through: Mr Ajay Vohra, Ms Kavita Jha & Mr Amit Sachdeva, Advocates

CORAM:

HON'BLE MR. JUSTICE BADAR DURREZ AHMED HON'BLE MR. JUSTICE RAJIV SHAKDHER

1. Whether the Reporters of local papers may be allowed to see the Judgment? No

2. To be referred to Reporters or not ? Yes

3. Whether the Judgment should be reported in the Digest ? Yes

RAJIV SHAKDHER, J

1. The upshot of the present application is to seek a review of

our order dated 14.07.2008, on the sole ground that the applicant/

assessee is a public sector undertaking and hence, no order could

have been passed in the reference, preferred by the department, as

the prior approval of the „Committee on Disputes‟ was not taken,

apropos the judgment of the Supreme Court in the case of Oil &

Natural Gas Commission vs Collector of Central Excise:

(2004) 6 SCC 437.

2. We are of the view that the application is without merit, for

more than one reason: First, the right to file a reference is

conferred by the statute, the judgment of the Supreme Court does

not seek to take away this right. A careful analysis of Oil &

Natural Gas Commission (supra) and those which preceded and

followed it, would show that they injunct the prosecution of an

action where two entities of the State are involved. If a reference is

filed without an approval it cannot be held, as not being

maintainable. In somewhat similar circumstances where an issue

arose with respect to interpretation of Section 171 of the Indian

Companies Act, 1913 as regards as to what would be the position in

respect of a suit or proceeding which is instituted by an official

liquidator without the leave of the court, as mandated by the said

provision. The Supreme Court held that a suit or a proceeding

instituted without the leave of the court may be ineffective until

leave is obtained, but once leave is obtained the proceedings "will

be deemed instituted on the date granting leave". [See: Bansidhar

Shankarlal vs Mohd. Ibrahim: (1971) 41 Com Cases 21 (SC)].

Second, in view of the fact that it is not disputed that the judgment

of a Division Bench of this Court in CIT vs National Agricultural

Co-operative Marketing Federation of India Ltd: (1999) 236

ITR 766 covered the issue raised in the reference, the Committee

on Disputes could have either prevailed upon the assessee to

comply, or in the alternative, give permission to the department to

file a reference. There was no third alternative available with the

Committee on Disputes. Third, we are of the view that the

reference to the Committee on Disputes is mandated only if a

dispute exists. In the absence of such a circumstance, there was no

occasion to approach the Committee on Disputes for approval; as

the issue raised was not res integra. Lastly, the entire purpose of

routing matters through the Committee on Disputes is that, the

State and/or its instrumentalities do not fritter away valuable funds,

and clog the courts with disputes which perhaps can be resolved

inter-departmentally. In the instant situation, where the court has

already provided the answer, to the issues raised in the reference;

an approval for filing the reference was not a pre-requisite - since

all that the reference sought to achieve was to bring the impugned

judgment in line with an earlier decision of this court. If we are to

take a strict view of the matter, the institution of the instant review

application ought to have had the approval of the Committee on

Disputes. Which, it does not have.

3. In view of the discussion above, the application is dismissed.

4. This, however, will not come in the way of the review

petitioner in approaching the Committee on Disputes for assuaging

the burden of recovery of dues, if any, pursuant to our judgment.

RAJIV SHAKDHER, J

BADAR DURREZ AHMED, J

OCTOBER 23, 2009 mb