Delhi High Court
Pawan Kumar Jain vs Uoi & Ors on 29 May, 2014
Author: Badar Durrez Ahmed
IN THE HIGH COURT OF DELHI AT NEW DELHI
Judgment delivered on: 29.05.2014
W.P.(C) 1797/2008
PAWAN KUMAR JAIN ..... Petitioner
versus
UOI & ORS ..... Respondents
Advocates who appeared in this case:
For the Petitioner : Dr Rakesh Gupta, Advocate with Ms Poonam Ahuja and Mr Rishabh
Kapoor, Advocates
For the Respondents : Ms Sonia Mathur, Advocate for UOI
Mr Rohit Madan, Advocate for CIT
CORAM:
HON'BLE MR JUSTICE BADAR DURREZ AHMED
HON'BLE MR JUSTICE SIDDHARTH MRIDUL
JUDGMENT
BADAR DURREZ AHMED, J (ORAL)
1. In this writ petition the petitioner has made the following prayers:-
(a) Declare the provisions of the Taxation Laws
(Amendment Act, 2005 insofar as it relates to
the retrospective amendments of section 28 and
80 HHC of the Income Tax Act, (Annexure
No.1) as ultra vires the Constitution and liable
to be struck down; and
(b) Declare that the CBDT circular No.2 of 2002
dated 17.01.2006 as ultra vires and
unauthorised by insofar it relates to the levy of
tax retrospectively on taxpayers by denying the
legitimate deductions otherwise admissible.
(c) Restrain the respondents from giving effect to
the retrospective amendments and CBDT
circular against the petitioner by issuing a writ
of prohibition for the purpose coupled with a
writ of mandamus directing the respondents not
to press for the recovery of the outstanding
demand which has been created as a result of
the order dated 28.12.2007 u/s 143(3)/148 of
the Act passed by the respondent No.3 in
respect assessment year 2000-01.
(d) Issue a writ in the nature of certiorari or an
order, quashing the impugned notice of demand
dated 28.12.2007 u/s 156 of the Act as well as
the impugned order dated 28.12.2007 u/s
143(3)/147 of the Act in respect assessment
year 2000-01.
(e) To issue a writ of prohibition or an order or a
writ of mandamus directing the respondents not
to initiate proceedings to recover the
outstanding demand of Rs.30,51,886/- in
respect assessment year 2000-01.
(f) Pass any other order(s) as this Hon‟ble Court
may deem to be fit and more appropriate in
order to grant interim relief to the petitioner.
2. It would be evident from prayer (a) itself that essentially the petitioner
is challenging the retrospectivity of the amendments to Section 80 HHC
brought about by the Taxation Laws (Amendment) Act, 2005 (hereinafter
referred to as „the said Act‟). This issue was considered by the Gujarat High
Court in the case of Avani Exports & Ors. v. CIT: 348 ITR 391 which set
aside the retrospectivity. The Gujarat High Court held as under:-
"26. On consideration of the entire materials on record,
we, therefore, find substance in the contention of the
learned counsel for the petitioners that the impugned
amendment is violative for its retrospective operation in
order to overcome the decision of the Tribunal, and at the
same time, for depriving the benefit earlier granted to a
class of the assessees whose assessments were still
pending although such benefit will be available to the
assessees whose assessments have already been
concluded. In other words, in this type of substantive
amendment, retrospective operation can be given only if it
is for the benefit of the assessee but not in a case where it
affects even a fewer section of the assesses.
27. We, accordingly, quash the impugned amendment
only to this extent that the operation of the said section
could be given effect from the date of amendment and not
in respect of earlier assessment years of the assessees
whose export turnover is above Rs.10 crore. In other
words, the retrospective amendment should not be
detrimental to any of the assessees."
3. The said decision of the Gujarat High Court in Avani Exports (supra)
has already been recognized and accepted by a Division Bench of this Court
in the case of CIT vs. Jayanita : ITA No.48/2014 decided on 31.01.2014.
Consequently, agreeing with the views expressed by the other Division
Bench of this Court as also the views expressed by the Gujarat High Court,
prayer (a) of the writ petition has to be allowed.
4. It is ordered accordingly.
5. In view of the fact that we have allowed prayer (a) to the extent that
the amendment brought about by introducing the 2nd, 3rd and 4th proviso to
Section 80 HHC (3) (c) is to operate only prospectively and not
retrospectively, the other prayers which are in the nature of consequential
reliefs also stand allowed.
6. With these directions the writ petition is allowed to the aforesaid
extent.
BADAR DURREZ AHMED, J.
SIDDHARTH MRIDUL, J.
MAY 29, 2014
dn
