1967 (11) TMI 16 - HC - Income Tax

Remarks were made in an IT proceedings affecting a third person who was not a party to the proceedings and the latter applied to the Court which heard the IT reference for inspection of records of the proceedings - whether the firm, represented by G, is entitled to inspect the proceedings to which proceeding the firm was not a party

Summary

Issues:
- Whether the appellant-firm is entitled to inspect the proceedings in T.C. No. 218 of 1959.
- Whether the appellant-firm can obtain copies of relevant documents from the proceedings for use in other pending cases.
- Whether the judgment in the tax case binds the appellant-firm, even though they were not a party to the original proceedings.

Analysis:

The judgment dealt with an appeal regarding the appellant-firm's request to inspect the proceedings in T.C. No. 218 of 1959, to which they were not a party. The main objection raised was that the appellant-firm was attempting to obtain material to harass the respondent, rather than for a legitimate purpose. The respondent contended that the firm could not be bound by the judgment as they were not a party to the original case. Additionally, it was argued that the nature of the proceedings was unique, falling under a special advisory jurisdiction, and therefore, the request for inspection should be refused. The court considered the arguments but ultimately found that the appellant-firm had a conceivable interest in inspecting the documents, especially to defend themselves in pending proceedings. The court allowed the appeal to the extent that the appellant-firm could inspect the documents in question.

The judgment also discussed the applicability of Rule 65 of the Appellate Side Rules and whether it could be invoked in this case. The court noted that even though the proceedings were not strictly appellate in nature, the rule could still apply to grant the appellant-firm the opportunity to inspect the records. The court emphasized that the rules were framed to provide relief in suitable cases, regardless of the specific jurisdiction involved. The court found that the petitioner-firm had a legitimate interest in examining the documents and that the rule should be interpreted broadly to facilitate this inspection.

Furthermore, the judgment addressed the issue of whether the judgment in the tax case bound the appellant-firm. The court acknowledged that the firm was not a party to the original proceedings but highlighted that certain observations from the judgment had been referenced in the ongoing litigation between the parties. The court concluded that the appellant-firm had a conceivable interest in challenging these observations and that inspecting the documents was essential for their defense in the pending cases. The court allowed the appellant-firm to inspect the documents, emphasizing that the firm's motive was not malicious but driven by a pursuit of justice regarding their rights in the alleged lease and recovery of their account books.

In summary, the court granted the appellant-firm the right to inspect the documents in T.C. No. 218 of 1959, emphasizing their legitimate interest in doing so for their defense in pending proceedings. The judgment highlighted the broad interpretation of rules to provide relief in appropriate cases, regardless of the specific jurisdiction involved, and emphasized the firm's pursuit of justice rather than malice in seeking the inspection.