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2014 DIGILAW 1432 (HP)

Anand Chauhan v. Commissioner of Income Tax

2014-10-15

MANSOOR AHMAD MIR, TARLOK SINGH CHAUHAN

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JUDGMENT : Mansoor Ahmad Mir, J. In all these writ petitions, the petitioners have questioned the show cause notice, dated 25th June, 2014 and the order, dated 14th July, 2014, passed by the Commissioner of Income Tax, Shimla, H.P., whereby the cases of the petitioners have been ordered to be transferred from DCIT, Circle Shimla to ACIT/DCIT Central Circle-I, Chandigarh, on the grounds taken in the memo of Writ Petitions. 2. Precisely, the case of the petitioners is that the respondent i.e. the Commissioner of Income Tax, Shimla has, without any rhyme or reason, transferred their cases from Shimla Circle to Central Circle-I, Chandigarh, which is illegal and has affected and deprived the petitioners from effective hearing. Further, it is pleaded that they would not be in a position to contest/defend their cases. 3. Respondent has filed the reply(ies) and resisted the writ petitions on various grounds. 4. Mr.Vinay Kuthiala, learned Senior Advocate appearing for the respondent, raised a preliminary objection vis-a-vis maintainability of the writ petitions on the ground that the orders, impugned in the writ petitions, already stand implemented and therefore, he submitted that the writ petitions have become infructuous. The learned Senior Counsel further submitted that the interim direction i.e. stay order granted is adversely affecting the respondent because the respondent is not in a position to draw proceedings as per the mandate of law and by efflux of time, the said proceedings would become time barred. 5. On the other hand, Mr.N.K. Sood, learned Senior Advocate, appearing for the petitioners, argued that the petitioners have questioned the impugned show cause notices and orders on various grounds taken in the writ petitions and the Court has to determine all such issues which have been raised and in case the Court comes to the conclusion that the impugned show cause notices and the orders are illegal and bad in law, then mere execution/implementation of the said impugned orders cannot be a ground to dismiss the writ petitions. 6. Learned counsel for the parties have only addressed arguments on the above preliminary issue, without entering into the merits of the cases. 7. The moot question to be answered at this stage is – Whether the execution/implementation of the orders would be a ground for dismissing the writ petitions at the threshold stage? The answer is in the negative for the following reasons. 8. 7. The moot question to be answered at this stage is – Whether the execution/implementation of the orders would be a ground for dismissing the writ petitions at the threshold stage? The answer is in the negative for the following reasons. 8. The writ petitioners have questioned the impugned show cause notices and the orders on the ground that these are unconstitutional, illegal, bad in law and have resulted in depriving the petitioners from contesting their cases conveniently at Shimla. 9. The question - whether the show cause notices and the orders impugned are bad in law, are liable to be quashed or otherwise and whether the writ petitions would lie - is to be determined after hearing the parties on merits. 10. For determining the preliminary objection, the rival contentions of the parties have to be tested on the principles laid down by the Apex Court. 11. The Apex Court in Nagar Mahapalika (Now Municipal Corpn.) vs. State of U.P. and others, (2006) 5 SCC 127 , in paragraphs 20, 21 and 22 has observed as under: ?20. We, however, do not agree with the High Court that as by way of an interim order the award was directed to be implemented, the same should itself form the basis for dismissing the writ petition. 21. The High Court exercised its discretion in not granting an interim relief in favour of the Appellant. In view of the refusal on the part of the High Court to grant an interim relief as was prayed for by the Appellant, the Appellant implemented the award pending the appeal which can only be subject to appeal, that would not mean that the High Court would not or should not go into the merit of the matter. In fact it is the duty of the High Court to consider the appeal on merits. It is unfortunate that the writ petition filed in the year 1989 has been disposed of in 2004 but the Appellants cannot be blamed therefor. The Respondents might have continued in service for more than 14 years only because the High Court did not pass any interim order, but the same, in our opinion, should not have formed the basis for making the interim order absolute or for non-consideration of the merit of the matter. 22. In our opinion, the High Court did not adopt a correct approach in the matter.? 12. 22. In our opinion, the High Court did not adopt a correct approach in the matter.? 12. The Apex Court in Nagesh Datta Shetti & Ors. vs. State of Karnataka & ors., (2005) 10 SCC 383 also made similar observations. It is profitable to reproduce paragraphs 7 and 8 hereunder: ?7. As the factual scenario noted above goes to show specific challenge in the writ appeal was in respect of the direction given by learned Single Judge to grant occupancy rights to the respondents. That was the basic issue which was to be adjudicated by the Division Bench in the writ appeal. The basic issue, as noted above was whether the direction given by learned Single Judge could be maintained, when the matter was being remitted by learned Single Judge to the Tribunal for fresh adjudication. In a given case there can be limited remand and giving finality to an issue, may be permissible. In the present case the High Court had admitted the writ appeal to examine legality of such direction. Unfortunately, the Tribunal did not keep the proceedings pending though it was brought to its notice that the Writ Appeal had been admitted. Appellants have also contributed to the confusion to a great measure by not seeking stay of direction. In given cases the Court/Forum to which the matter is remitted can await decision in the appeal where the directions given are impugned. A copy of the order passed by the Tribunal pursuant to the direction given by learned Single Judge has been placed on record. It clearly shows that the Tribunal acted only on the basis of the direction given and on that ground alone granted occupancy rights. 8. The High Court was not justified in holding that the writ appeal had been rendered infructuous because of the subsequent decision of the Tribunal. Correctness of the order passed by learned Single Judge was being challenged in the writ appeal. Any decision taken by the Tribunal has to be per force subject to the decision in the writ appeal. Therefore, the Division Bench should have considered the matter on merits without concluding that the writ appeal had become infructuous.? 13. Correctness of the order passed by learned Single Judge was being challenged in the writ appeal. Any decision taken by the Tribunal has to be per force subject to the decision in the writ appeal. Therefore, the Division Bench should have considered the matter on merits without concluding that the writ appeal had become infructuous.? 13. The Apex Court in Union of India and others vs. Narender Singh, (2005) 6 SCC 106 , also followed the same principle and held that by implementing an order, the challenge to the validity of the order is not wiped out and the order is not rendered redundant. 14. In a recent decision of the Apex Court in case Union of India vs. Ram Kumar Thakur, 2008 AIR SCW 7638, the Apex Court, while referring to its earlier decisions (supra), restated the same principle and held that mere implementation of the order cannot be a ground to dismiss the appeal or it cannot be said that the appeal has become infructuous. It is apt to reproduce paragraphs 2 to 7 as under: ?2. Challenge in this appeal is to the judgment of a Division Bench of the Jammu and Kashmir High Court dismissing the appeal filed by the present appellants on the ground that the respondent had been reinstated in service pursuant to the judgment of the learned single Judge which was impugned in the writ appeal filed before the Division Bench. The High Court held that the appeal had therefore become infructuous. 3. Learned counsel for the appellant submitted that the impugned order of the High Court has no legal basis. Merely because the impugned order before the High Court was implemented to avoid possible contempt proceedings that did not take away the right of the appellants to prefer an appeal and question correctness of the impugned order. 4. Learned counsel for the respondent on the other hand supported the judgment. 5. It has been noted by this Court that if even in cases where interim relief is not granted in favour of the applicant and the order is implemented that does not furnish a ground for not entertaining the appeal to be heard on merits. (See : Nagar Mahapalika v. State of U.P. [ 2006 (5) SCC 127 ]. Similar view was also take in Nagesh Datta Shetti v. State of Karnataka [ 2005 (10) SCC 383 ]. 6. (See : Nagar Mahapalika v. State of U.P. [ 2006 (5) SCC 127 ]. Similar view was also take in Nagesh Datta Shetti v. State of Karnataka [ 2005 (10) SCC 383 ]. 6. In Union of India v. G.R. Prabhavalkar & Ors. [ 1973 (4) SCC 183 ] it was observed at para 23 as follows: "23. Mr Singhvi, learned counsel, then referred us to the fact that after the judgment of the High Court the State Government has passed an order on March 19, 1971, the effect of which is to equate the Sales Tax Officers of the erstwhile Madhya Pradesh State with the Sales Tax Officers, Grade III of Bombay. This order, in our opinion, has been passed by the State Government only to comply with the directions given by the High Court. It was made during a period when the appeal against the judgment was pending in this Court. The fact that the State Government took steps to comply with the directions of the High Court cannot lead to the inference that the appeal by the Union of India has become infructuous." Above position was also noted in Union of India v. Narender Singh [ 2005(6) SCC 106 ]. 7. Above being the position the impugned order of the High Court cannot be maintained and is set aside. The writ appeal shall be heard by the High Court on merits about which we express no opinion. The appeal is allowed to the aforesaid extent. No costs.? 15. Following the dictum of the Apex Court, this Court also in CMP(M) No.1121 of 2014, titled State of H.P. & ors. Vs. Prem Lal, laid down the same principle. 16. Having said so, the preliminary objection raised by the respondent fails and is rejected. 17. Coming to the second point raised by the learned Senior Counsel for the respondent that the interim direction i.e. stay order granted is adversely affecting the respondent since the actions which are to be drawn in a time bound manner would become time barred, we may observe that since the parties have not argued the cases on merits, it is not fair to return findings whether the stay is to be vacated or to be made absolute. However, it is made clear that in case any action becomes time barred in the interregnum, the period from the date of passing of the stay order shall be excluded, while computing the time limit. 18. Keeping in view the request made by the learned counsel for the respondent, we deem it proper to hear these writ petitions expeditiously. 19. List all the petitions for hearing on 18.11.2014.