2021 (9) TMI 934 - HC - Income Tax

Allegation of Evasion of tax by merging of 3 companies - Tax Informant Scheme - PIL already filed - second writ petition on the same subject matter - Seeking order or a direction directing the Chairman, Central Board of Director Taxes to take action under the Income Tax Act in respect of alleged tax evasion set out to the appellant under the Tax Informant Scheme - HELD THAT - The issue of evasion of tax under the Tax Informant Scheme has already been raised in the PIL. This Court has already dismissed the identical writ appeal 2021 (3) TMI 1258 - KARNATAKA HIGH COURT In the considered opinion of this Court, keeping in view judgment delivered in the case of in SARGUJA TRANSPORT SERVICE Vs. STATE TRANSPORT APPELLATE TRIBUNAL, M.P. GWALIOR AND OTHERS 1986 (11) TMI 377 - SUPREME COURT a second writ petition on the same subject matter is certainly not at all maintainable. Such a practice deserves to be deprecated. Therefore, this Court does not find any reason to interfere with the order passed by the learned Single Judge.

Issues Involved:
1. Maintainability of the writ petition.
2. Allegations of tax evasion under the Tax Informant Scheme.
3. Merger of three companies and its implications.
4. Previous litigation history and its impact on the current case.
5. Abuse of the judicial process and imposition of costs.

Detailed Analysis:

1. Maintainability of the Writ Petition:
The court examined whether the writ petition was maintainable given the history of the case. The appellant had previously filed a Public Interest Litigation (PIL) on the same subject matter, which was withdrawn unconditionally. The court referenced the judgment in Sarguja Transport Service, emphasizing that the unconditional withdrawal of a PIL bars subsequent proceedings on the same subject matter. The court concluded that filing multiple writ petitions on the same issue constitutes an abuse of the judicial process and is not maintainable.

2. Allegations of Tax Evasion under the Tax Informant Scheme:
The appellant, a not-for-profit company, sought a writ directing the Chairman of the Central Board of Direct Taxes to take action on alleged tax evasion cases reported under the Tax Informant Scheme. The court noted that these issues had already been raised in the earlier PIL, which had been dismissed. The court found no new grounds or evidence to justify reopening the matter, thus dismissing the appellant's claims.

3. Merger of Three Companies and Its Implications:
The genesis of the case was the merger of three companies, which the appellant claimed involved fraudulent activities. The court observed that this issue had been previously litigated and dismissed, including a ruling by the High Court of Delhi that the Government of India had no stake in the amalgamating companies. The court found no merit in the appellant's repeated claims regarding the merger and its alleged impact on government funds.

4. Previous Litigation History and Its Impact on the Current Case:
The appellant had a history of filing multiple litigations on the same subject matter, all of which had been dismissed. The court highlighted that the appellant had been unsuccessful in nearly nine previous attempts, including a dismissal by the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT). The court emphasized that the appellant's repeated filings constituted forum shopping and an abuse of the judicial process.

5. Abuse of the Judicial Process and Imposition of Costs:
The court referenced several Supreme Court judgments to underline the importance of curbing frivolous and vexatious litigation. The court noted that the appellant's actions had wasted valuable judicial time and resources, which could have been used to address genuine grievances. The court upheld the imposition of exemplary costs by the learned Single Judge, who had dismissed the writ petition with costs of ?10 lakhs. The court reiterated that such behavior amounts to criminal contempt and must be firmly dealt with to maintain the sanctity of the judicial process.

Conclusion:
The court dismissed the writ appeal, reiterating that a second writ petition on the same subject matter is not maintainable. The court found no reason to interfere with the order passed by the learned Single Judge and emphasized the need to prevent the abuse of judicial processes. The appeal was dismissed with no order as to costs.

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