2017 (10) TMI 181 - SC - VAT and Sales Tax

Amnesty Scheme - Validity of orders issued by the Designated Authority i.e. Additional Commissioner of Income Tax - Delhi Tax Compliance Achievement Scheme, 2013 - power and jurisdiction of the Designated Authority to issue the notice under clause 8 of the Amnesty Scheme - whether, in the present case, there has been any delegation of the said power which is vested in the Commissioner under the aforesaid clause 8? - Held that - Clause 8(3) of the Amnesty Scheme will have no application to the present case where the initial show cause notice was issued within time and its legitimacy was not contested by the respondent-Assessee. Had such legitimacy been questioned at the stage of reply or even in the course of the adjudication proceedings, there would still have been room/ time for the revenue to correct the error that had occurred. A rectified Notice could even have been issued after the order of adjudication was passed on 11th February, 2015. The close proximity of time between the reply submitted by the assessee to the Show Cause Notice (27.01.2015) and the proceedings in adjudication Revenue on the one hand and the date of filing of the Writ Petition (4.3.2015) would permit us to infer that the conduct of the assessee in raising the issue in the writ petitions and not earlier was not entirely bonafide. Whether a fresh notice under the aforesaid clause of the scheme can still be issued by the competent authority i.e. the Commissioner or the delegatee of the Commissioner? - Held that - The respondent-Assessee, cannot be allowed to take advantage of its own wrong. The courts exercising extraordinary jurisdiction cannot be understood to be helpless but concede to the assessee an undeserved victory over the Revenue. The power of the High Court under Article 226 of the Constitution, wide and pervasive as it is, should have enabled the High Court to appropriately deal with the situation and issue consequential directions permitting initiation of fresh proceedings, if the Revenue was so inclined. The High Court having failed to so act, we now correct the error and issue directions to enable the Revenue to issue a fresh notice to the assessee under clause 8 of the Amnesty Scheme, if it so desires and is so advised. Appeal allowed - decided in favor of Revenue.

Summary

Issues Involved:
1. Jurisdiction of the Designated Authority under Clause 8 of the Amnesty Scheme.
2. Validity of fresh notice issuance under Clause 8 after the limitation period.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Designated Authority under Clause 8 of the Amnesty Scheme:

The primary contention revolves around whether the Designated Authority, specifically the Additional Commissioner, had the jurisdiction to issue a show-cause notice under Clause 8 of the Amnesty Scheme. Clause 8 explicitly vests this power in the Commissioner to issue such notices for reopening cases where the declaration is suspected to be false. The court analyzed the Government Order dated 30th April 2014, which the Revenue cited as delegating this power to the Designated Authority. The court concluded that the Government Order only empowered the Additional Commissioner to hear and decide applications under Clause 4 and did not delegate the power under Clause 8. Therefore, the Additional Commissioner lacked the jurisdiction to issue the show-cause notice, affirming the High Court's decision on this matter.

2. Validity of Fresh Notice Issuance under Clause 8 after the Limitation Period:

The second issue pertains to whether a fresh show-cause notice could be issued by the Commissioner after the limitation period prescribed in Clause 8(3) had expired. The declarations were made on 18th and 28th February 2014, and the show-cause notice was issued on 16th January 2015. The High Court ruled that since the limitation period had expired, no fresh notice could be issued. However, the Supreme Court considered the conduct of the Assessee, noting that the jurisdictional issue was not raised during the adjudication process, which could have allowed the Commissioner to correct the error within the limitation period. Citing the principle that a party should not benefit from its own wrong, the court held that the Assessee's failure to timely contest the jurisdictional issue was not bona fide. Consequently, the court exercised its powers under Article 226 to permit the Revenue to issue a fresh notice if it so desired, thereby setting aside the High Court's order.

Conclusion:

The Supreme Court allowed the Revenue's appeal, holding that the Additional Commissioner did not have the jurisdiction to issue the show-cause notice under Clause 8. However, the court permitted the Revenue to issue a fresh notice under Clause 8, despite the lapse of the limitation period, due to the Assessee's delayed challenge to the jurisdiction. The High Court's order was set aside, and directions were issued to enable the Revenue to proceed afresh if advised.