Un-necessary litigation and argument to distinguish settled matter is wrong. Advocates, as responsible officers of Court must desist from such practices

[CA DEV KUMAR KOTHARI]

The Pr. Commissioner of Income Tax, Central-1 Versus M/s. JWC Logistics Park Pvt. Ltd. 2018 (4) TMI 749 - BOMBAY HIGH COURT

Settled issue: container Freight Station (CFS) unit of assesse  is eligible for deduction under Section 80IA of the Act as an infrastructure facility.

Cases referred:

1. Commissioner of Income-Tax-II, Thane Versus Continental Warehousing Corporation (Nhava Sheva) Ltd., All Cargo Global Logistics Ltd. - 2015 (5) TMI 656 - BOMBAY HIGH COURT
2. Continental Warehousing Corporation Versus The ACIT, Panvel, Dist. Raigad - 2012 (8) TMI 893 - ITAT MUMBAI
3. M/s ALL CARGO GLOBAL LOGISTICS LTD Versus DEPUTY COMMISSIONER OF INCOME TAX - 2012 (7) TMI 222 - ITAT MUMBAI(SB)

Background:

The Tribunals have held that container Freight Station (CFS) as a unit of assesse, is eligible for deduction under Section 80IA of the Act as an infrastructure facility. The judgments of Tribunal have been affirmed by the Bombay High Court. It is not a case that revenue has challenged the ruling of High Court or a stay has been obtained from the Supreme Court.

However, the Sr., Counsel of revenue made attempt to distinguish earlier judgment on a wrong basis that a Circular of the Board was not considered earlier. Whereas the Circular was already considered.

(per author: a circular, which is not in favour of assesse, is not binding on assesse , appellate authority , Tribunal or Courts and when Court has already decided a matter in favour of assesse, the counsel of revenue was not justified to make attempt to distinguish earlier judgment, which has not been challenged. Furthermore distinguishing based on wrong contention is not at all justifiable).

About duty of Advocates:

Paragraph 5 of the judgment is reproduced below, and analysed by way of highlights added:

“ We are pained to record this most unreasonable attitude on the part of the Advocate for the Revenue of seeking to reargue settled concluded issues, without having obtained any stay from the Apex Court. This results in unnecessary wastage of the scarce judicial time available in the context of the large number of the appeals awaiting consideration. We would expect Mr. Chhotaray, as an Advocate to act with responsibility as an Officer of the Court and not merely argue for the sake of arguing when an issue is clearly covered by the decision of Co- ordinate Bench of the Court and take up scarce judicial time. The Advocate must bear in mind that this is a Court of law and not an University/College debating Society, where debates are held for academic stimulation. We deal with real life disputes and decide them in accordance with the Rule of Law, of which an important limb is uniformity of application of law. This on the basis of judicial discipline and law of precedents.”

Therefore, when a matter has been settled and not disputed and there is no stay on judgment which is a binding precedence, there should not be re-argument.

Advocate is also an officer of Court and is supposed to help the Court in arriving at correct decision and without wastage of time.

Advocates must consider these aspects and perform their duty in a manner that there is no wastage of scarce time of honourable Court.

Ground reality:

However, ground reality is that most of Advocates, even very senior Counsels, as appears from history of many cases and day to day observations in Courts are interested in prolonging cases and due to this there is lot of wastage of time of Courts. In many cases frivolous arguments are made and cases are prolonged for decades.

Many litigations are due to greed of Advocates. The approach is to advise “ just file the case or dispute the contentions raised in application, and we will see …. to roll out year after years in litigation” .

For example, under West Bengal Premises Tenancy Act, after amendment in 2004,there is clear provision of revision of Rent, where tenancy subsist for twenty years. The criterion is “tenancy subsists” and not relationship between particularlandlord and tenant. The calculation aspects are also very clear. However, on advice of Advocates tenants are not revising rent and landlords have to file case for fixation of fair rent. To disputes and contest application of landlords, contentions raised are like new landlord / applicant is not owner for twenty years so revised rent law is not applicable (though undisputedly tenant is tenant of same premises at same terms and conditions for more than 20 years).

In some cases even rights of owner as owner / landlord are disputed on frivolous grounds.

Unfortunate Landlords (author himself is one) are forced to file applications for fixation of fair rent. Such applications (filed by author in 2004) are pending for about 14 years before the Rent Controller, on a simple issue of fixation of fair rent. After filing of cases, the new landlord and tenant relationship has also achieved 20 years of subsistence, still the same arguments are being advanced by advocates of tenants. Though case is fixed several times in a year but due to advocates of tenant seeking adjournments and working deliberately to prolong hearing,no meaningful results are availablebecause the process of examination of documents and witnesses are also very lengthy and advocates also try to make them time consuming so that several days are taken.

In cases where documents are relied on, documentary evidences are available there should be hearing only on disputed aspects, if any.

For example, when tenant has paid rent for many years to landlord, and has made deposits with Rent Controller on account of landlord ( because landlord was forced to refuse old rent instead of revised rent) , then there is no need to examine whether tenant is tenant and landlord is landlord. On such examination lot of processes take place causing delay in decision making and delivery of judgment.

For frivolous applications, contentions and arguments based on imaginary story which is contrary to facts, there should be penalty on the litigant as well as his representative who represent case before Court.

Tax matters are still in better position:

In case of tax matters, we find situation is comparatively better than in cases of other civil disputes and Criminal Matters before Courts. We find comparatively quick disposal of cases .Though the revenue is raising un-necessary disputes, filing un-necessary appeal, taking un-necessary processes etc.

Filing of appeals contrary to Circulars, and binding precedence’s and pressing them instead of withdrawing wrongly filed appeals must be viewed seriously to avoid wastage of scarce time of Courts and spending of public money by tax departments and forcing assesse to contest which also causes loss of money and brain drainage.