Rajasthan High Court - Jodhpur
M/S Gr Infraprojects Limited vs Union Of India on 17 March, 2025
Author: Pushpendra Singh Bhati
Bench: Pushpendra Singh Bhati
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
D.B. Civil Writ Petition No. 13628/2024
M/s GR Infraprojects Limited, GR House, Hiran Magri, Sector-11,
Udaipur, Rajasthan, 313001 through its Authorized Signatory
Shri Kuldeep Jain S/o Babu Lal Jain Aged 47 Years (Approx) R/o
204, I Block Hiran Magri Sector 14, Udaipur, Rajasthan - 313002
----Petitioner
Versus
1. Union Of India, through The Secretary Department Of
Revenue Ministry Of Finance Government Of India North
Block New Delhi 110 001
2. Assistant Commissioner Of Income Tax, Centralised
Processing Cell TDS, Aaykar Bhawan Sector 3 Vaishali,
Ghaziabad, Uttar Pradesh 201010
3. Assistant Commissioner Of Income Tax, Circle (TDS),
Aaykar Bhawan, Subcity Centre, Udaipur, Rajasthan -
313001
4. Central Board Of Direct Taxes, Through Its Chairmen,
CBDT (HQ), North Block, New Delhi-110001
----Respondents
For Petitioner(s) : Mr. Jatin Harjai
For Respondent(s) : Mr. K.K. Bissa
Ms. Aditi Sharma for Mr. Mukesh
Rajpurohit, Dy.S.G.
Mr. Uttam Singh Rajpurohit
HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI
HON'BLE MR. JUSTICE CHANDRA PRAKASH SHRIMALI
Order
17/03/2025
1. The present petition has been filed under Article 226/227 of
the Constitution of India with the following prayer:-
"1. Quash intimation cum demand notice dated
09.06.2024 (Annex.P/3).
2. Quash intimation cum demand notice dated
16.06.2024 (Annex.P/7).
3. To grant cost;
4. To grant such order relief as this Court may deem
fit and proper in the facts, circumstance and legal
position of the case to the petitioner."
(2 of 9) [CW-13628/2024]
2. The petitioner company - M/s. GR Infraprojects Ltd. is
having its principal place of business in Udaipur and having its TAN
JDHG01925A. The petitioner is limited company engaged in
development of highways on EPC and PPP basis.
3. Learned counsel for the petitioner submits that the
petitioner-company filed its TDS statement in Form 24Q on
31.05.2024 for the 4th quarter (January to March, 2024) and a
revised TDS statement was also filed on 14.06.2024. The
respondents thereafter issued an intimation under Section 200A
and under Section 154 through the TRACES on 09.06.2024 and
16.06.2024, raising total demand on account of alleged short
payment.
4. Learned counsel for the petitioner-company has taken this
court through Section 200A of the Income Tax Act, 1961
(hereinafter referred to as "the Act of 1961"), which reads as
follows:-
"(1) Where a statement of tax deduction at source (or
a correction statement) has been made by a person
deducting any sum (hereafter referred to in this
section as deduct or) under section 200, such
statement shall be processed in the following manner
namely:--
(a) the sums deductible under this Chapter shall be
computed after making the following adjustments,
namely;--
(i) any arithmetical error in the statement; or
(ii) an incorrect claim, apparent from any
information in the statement;
(b) the interest, if any, shall be computed on the
basis of the sums deductible as computed in the
statement;"
5. Learned counsel for the petitioner further taken this court to
Section 206AA of the Income Tax Act, 1961, which reads as
follows:-
"Section 206AA of the Act, 1961
206AA. Requirement to furnish Permanent
Account Number.
(3 of 9) [CW-13628/2024]
(i) Notwithstanding anything contained in any
other provisions of this Act, any person entitled to
receive any sum or income or amount, on which
tax is deductible under Chapter XVIIB (hereafter
referred to as deductee) shall furnish his
Permanent Account Number to the person
responsible for deducting such tax (hereafter
referred to as deductor), failing which tax shall be
deducted at the higher of the following rates,
namely:--
(i)at the rate specified in the relevant provision of
this Act; or
(ii)at the rate or rates in force; or
(iii)at the rate of twenty per cent:[Provided that
where the tax is required to be deducted under
section 194-O, the provisions of clause (iii) shall
apply as if for the words "twenty per cent", the
words "five per cent" had been substituted:]
[Provided further that where the tax is required to
be deducted under section 194Q, the provisions of
clause (iii) shall apply as if for the words "twenty
per cent", the words "five per cent" had been
substituted.]
(2)No declaration under sub-section (1) or sub-
section (1A) or sub-section (1C) of section 197A
shall be valid unless the person furnishes his
Permanent Account Number in such declaration.
(3)In case any declaration becomes invalid under
sub-section (2), the deductor shall deduct the tax
at source in accordance with the provisions of sub-
section (1).
(4)No certificate under section 197 shall be
granted unless the application made under that
section contains the Permanent Account Number
of the applicant.
(5)The deductee shall furnish his Permanent
Account Number to the deductor and both shall
indicate the same in all the correspondence, bills,
vouchers and other documents which are sent to
each other.
(6)Where the Permanent Account Number
provided to the deductor is invalid or does not
belong to the deductee, it shall be deemed that
the deductee has not furnished his Permanent
Account Number to the deductor and the
provisions of sub-section (1) shall apply
accordingly.
(7)The provisions of this section shall not apply to
a non-resident, not being a company, or to a
foreign company, in respect of--
(4 of 9) [CW-13628/2024]
(i) payment of interest on long-term bonds as
referred to in section 194LC; and
(ii)any other payment subject to such conditions
as may be prescribed."
6. Learned counsel for the petitioner submits that while raising
such a demand under Section 200A of the Act of 1961, the
respondents ought to have allowed the petitioner to explain as to
in what circumstances the petitioner has already deducted the
rate of 20% on the value of the taxable income paid to the
petitioner's employees.
7. Learned counsel for the petitioner to invoke writ jurisdiction,
has drawn attention of this Court towards the judgment passed by
the Hon'ble Apex Court in the case of Godrej Sara Lee Ltd. Vs.
The Excise and Taxation Officer-cum-Assessing Authority
and Ors. : Civil Appeal No.5393/2010, decide on 01.02.2023.
The relevant paragraphs reads as follows:-
"6. At the end of the last century, this Court in
paragraph 15 of its decision reported in (1998) 8 SCC
1 (Whirlpool Corporation vs. Registrar of Trade Marks, Mumbai
and Others) carved out the exceptions on the existence
whereof a Writ Court would be justified in
entertaining a writ petition despite the party
approaching it not having availed the alternative
remedy provided by the statute. The same read as
under:
(I) where the writ petition seeks
enforcement of any of the fundamental
rights;
(ii) where there is violation of principles of
natural justice;
(iii) where the order or the proceedings are
wholly without jurisdiction; or
(iv) where the vires of an Act is challenged.
8. That apart, we may also usefully refer to the
decisions of this Court reported in (1977) 2 SCC 724
(State of Uttar Pradesh & ors. vs. Indian Hume Pipe
Co. Ltd.) and (2000) 10 SCC 482 (Union of India vs. State
of Haryana). What appears on a plain reading of the
former decision is that whether a certain item falls
within an entry in a sales tax statute, raises a pure
question of law and if investigation into facts is
unnecessary, the high court could entertain a writ
(5 of 9) [CW-13628/2024]
petition in its discretion even though the alternative
remedy was not availed of; and, unless exercise of
discretion is shown to be unreasonable or perverse,
this Court would not interfere. In the latter decision,
this Court found the issue raised by the appellant to
be pristinely legal requiring determination by the high
court without putting the appellant through the mill
of statutory appeals in the hierarchy. What follows
from the said decisions is that where the controversy
is a purely legal one and it does not involve disputed
questions of fact but only questions of law, then it
should be decided by the high court instead of
dismissing the writ petition on the ground of an
alternative remedy being available."
8. Learned counsel for the petitioner restricts his submissions
to the violation of principles of natural justice and submits that he
ought to have been given an opportunity of hearing to explain
deduction of tax from his employees at the rate prescribed in
tandem with Section 200A and 206AA of the Act of 1961. He
further submits that it was mandatory on the part of the
respondents to adhere to the doctrine of principles of natural
justice and as such, it is clear violation of the important rights.
Further, learned counsel for the petitioner has also relied on the
judgment of the Hon'ble Supreme Court in the case of
Dharampal Satyapal Ltd. Vs. Deputy Commissioner of
Central Excise and Ors. : Civil Appeal Nos.4458-
4459/2015(Arising out of SLP (C) No.37108-37109 of
2012), decided on 14.05.2015. The relevant paragraph of the
said judgment reads as under:-
"25. It is on the aforesaid jurisprudential
premise that the fundamental principles of
natural justice, including audi alteram partem,
have developed. It is for this reason that the
courts have consistently insisted that such
procedural fairness has to be adhered to before
a decision is made and infraction thereof has led
to the quashing of decisions taken. In many
statutes, provisions are made ensuring that a
notice is given to a person against whom an
order is likely to be passed before a decision is
made, but there may be instances where though
(6 of 9) [CW-13628/2024]
an authority is vested with the powers to pass
such orders, which affect the liberty or property
of an individual but the statute may not contain
a provision for prior hearing. But what is
important to be noted is that the applicability of
principles of natural jsutice is not dependent
upon any statutory provision. The principle has
to be mandatorily applied irrespective of the fact
as to whether there is any such statutory
provision or not.
De Smith4 captures the essence thus - "Where
a statute authorises interference with properties
or other rights and is silent on the question of
hearing, the courts would apply rule of universal
application and founded on plainest principles of
natural justice".
Wade5 also emphasizes that principles of
natural justice operate as implied mandatory
requirements, non-observance of which
invalidates the exercise of power. In Cooper v.
Sandworth Board of Works[10] the Court laid
down that:
'...although there is no positive word in the
statute requiring that the party shall be
heard, yet justice of common law would
supply the omission of
Legislature". Exhaustive commentary
explaining the varied contours of this
principle can be traced to the judgment of
this Court in Managing Director, ECIL,
Hyderabad & Ors. v. B. Karunakar & Ors.
[11], wherein the Court discussed plenty of
previous case law in restating the aforesaid
principle, a glimpse whereof can be found in
the following passages:
"20. The origins of the law can also be
traced to the principles of natural justice,
as developed in the following cases:
In A. K. Kraipak v. Union of India, (1969)
2 SCC 262 : (1970) 1 SCR 457, it was
held that the rules of natural justice
operate in areas not covered by any law.
They do not supplant the law of the land
but supplement it. They are not
embodied rules and their aim is to
secure justice or to prevent miscarriage
of justice. If that is their purpose, there
is no reason why they should not be
made applicable to administrative
proceedings also especially when it is not
easy to draw the line that demarcates
administrative enquiries from quasi-
judicial ones. An unjust decision in an
administrative inquiry may have a more
(7 of 9) [CW-13628/2024]
far reaching effect than a decision in a
quasi-judicial inquiry. It was further
observed that the concept of natural
justice has undergone a great deal of
change in recent years. What particular
rule of natural justice should apply to a
given case must depend to a great
extent on the facts and circumstances of
that case, the framework of the law
under which the inquiry is held and the
constitution of the tribunal or the body of
persons appointed for that purpose.
Whenever a complaint is made before a
Court that some principle of natural
justice has been contravened, the Court
has to decide whether the observance of
that rule was necessary for a just
decision on the facts of that case. The
rule that inquiry must be held in good
faith and without bias and not arbitrarily
or unreasonably is now included among
the principles of natural justice.
21. In Chairman, Board of Mining
Examination v. Ramjee, (1977) 2 SCC
256, the Court has observed that natural
justice is not an unruly horse, no lurking
landmine, nor a judicial cure-all. If
fairness is shown by the decision-maker
to the man proceeded against, the form,
features and the fundamentals of such
essential processual propriety being
conditioned by the facts and
circumstances of each situation, no
breach of natural justice can be
complained of. Unnatural expansion of
natural justice, without reference to the
administrative realities and other factors
of a given case, can be exasperating.
The Courts cannot look at law in the
abstract or natural justice as mere
artifact. Nor can they fit into a rigid
mould the concept of reasonable
opportunity. If the totality of
circumstances satisfies the Court that
the party visited with adverse order has
not suffered from denial of reasonable
opportunity, the Court will decline to be
punctilious or fanatical as if the rules of
natural justice were sacred scriptures.
22. In Institute of Chartered
Accountants of India v. L.K. Ratna,
(1986) 4 SCC 537, Charan Lal Sahu v.
Union of India, (1990) 1 SCC 613
(Bhopal Gas Leak Disaster Case) and C.
B. Gautam v. Union of India, (1993) 1
SCC 78, the doctrine that the principles
(8 of 9) [CW-13628/2024]
of natural justice must be applied in the
unoccupied interstices of the statute
unless there is a clear mandate to the
contrary, is reiterated."
In his separate opinion, concurring on this
fundamental issue, Justice K. Ramaswamy
echoed the aforesaid sentiments in the
following words:
"61. It is now settled law that the
proceedings must be just, fair and
reasonable and negation thereof
offends Articles 14 and 21. It is well
settled law that principles of natural
justice are integral part of Article 14. No
decision prejudicial to a party should be
taken without affording an opportunity
or supplying the material which is the
basis for the decision. The enquiry
report constitutes fresh material which
has great persuasive force or effect on
the mind of the disciplinary authority.
The supply of the report along with the
final order is like a post mortem
certificate with putrefying odour. The
failure to supply copy thereof to the
delinquent would be unfair procedure
offending not only Arts. 14, 21 and
311(2) of the Constitution, but also, the
principles of natural justice."
9. Mr. K.K. Bissa, learned counsel for the respondents is unable
to point out from the record as to whether any opportunity of
hearing was given to the petitioner or not, but rather fairly
submits that no such opportunity was given. Although, he tried to
impress upon the Court that in the given parameters, the
opportunity of hearing was not required to be given.
10. We have heard learned counsel for the petitioner as well as
learned counsel for the respondents.
11. This Court, while delving with the limited proposition raised
and submitted by both the counsels that is opportunity of hearing,
finds that Section 200A of the Act of 1961, incorrect claim
proposition was based upon certain act of the petitioner-company
(9 of 9) [CW-13628/2024]
and in case it was given an opportunity to explain the incorrect
claim, there are all the chances that it would be in a position to
explain that it has adhered to Sections 200A as well as 206AAA.
12. The judgments relied upon by the learned counsel,
particularly the judgment of the Hon'ble Supreme Court, rendered
in the case of Dharampal Satyapal (supra) clearly apply.
13. In light of the aforesaid judgment of the Hon'ble Apex Court
and considering the limited proposition raised, this Court is of the
firm opinion that even when the audi alteram partem was not
prescribed in statute itself, the principal should be mandatorily
applied in the given facts and circumstances as held by the
hon'ble Apex Court.
14. In the given proposition of factual matrix, where the
incorrect claim has been dealt with, an opportunity of hearing was
mandated, as the incorrect claim can be explained only by the
petitioner as to whether it can be justified or not, has to be heard
by the respondents themselves and considered on its own merits,
strictly in accordance with law.
15. Thus, the impugned orders - intimation-cum-demand notice
dated 09.06.2024(Annex.-P/3) and intimation-cum-demand notice
dated 16.06.2024 (Annex.-P/7) are hereby quash and set aside
and matter is remanded back to the respondent-authority to
provide an opportunity of hearing to the petitioner and pass fresh
orders strictly in accordance with law.
(CHANDRA PRAKASH SHRIMALI),J (DR.PUSHPENDRA SINGH BHATI),J
68-minki/-
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