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TMI Blog2009 (2) TMI 141X X X X Extracts X X X X X X X X Extracts X X X X ..... 26 to 29 of 2007. Ms. Niti P. Sheth for Mrs. Swati Soparkar for the appelleant. M. R. Bhatt with Mrs. Mauna M. Bhatt for the respondent. JUDGMENT The judgment of the court was delivered by D. A. MEHTA J.- In the light of the view that the court is inclined to adopt the petition is taken up for final hearing and disposal today. Rule. Learned counsel for the respondent-Department is directed to waive service. The tax appeals have already been admitted, vide order dated September 20, 2007, by formulating the following substantial question of law: "Whether the Appellate Tribunal is right in law and on facts in dismissing the appeal of the Revenue on the ground that approval of the Committee of Disputes was not obtained ?" 2. The petitioner in the special civil application is a public sector undertaking of the Government of Gujarat established in 1963. The appellant, in all the four appeals, is the Commissioner of Income-tax. The petition and the tax appeals are taken up for hearing together as the controversy involved in all the matters is one and the same and arises out of a common order of the Income-tax Appellate Tribunal, Ahmedabad Bench "A" (the Tribunal) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this issue one may consider the case law, more particularly, the orders made by the Supreme Court of India from time to time to appreciate the reading of the said orders by the Tribunal, the understanding thereof by the Tribunal, and the consequential approach of the Tribunal. 6. The first in point of time is an order made by the apex court in the case of ONGC v. Collector of Central Excise [1992] Supp (2) SCC 432 whereby the order made as record of proceedings has been reproduced. On a dispute between the ONGC, a public sector undertaking of the Central Government, and the Central Excise Department of the Central Government, as to whether excise duty on lean gas supplied to consumers was leviable or not, the apex court made the following interim order (page 432): "3. This court has on more than one occasion pointed out that public sector undertakings of the Central Government and the Union of India should not fight their litigations in court by spending money on fees of counsel, court fees, procedural expenses and wasting public time. The courts are maintained for appropriate litigations. The courts' time is not to be consumed by litigations which are carried on either s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommittee. Senior officers only should be nominated so that the Committee would function with status, control and discipline. 4. It shall be the obligation of every court and every tribunal where such a dispute is raised hereafter to demand a clearance from the Committee in case it has not been so pleaded and in the absence of the clearance, the proceedings would not be proceeded with. 5. The Committee shall function under the ultimate control of the Cabinet Secretary but his delegate may look after the matters. This court would expect a quarterly report about the functioning of this system to be furnished to the Registry beginning from January 1, 1992. 6. Our direction may be communicated to every High Court for information of all the courts subordinate to them." 9. The aforesaid directions in paragraph No. 3 make it clear that the directions were only to Government of India to set up a High Powered Committee (the Committee) to monitor disputes between Ministry and Ministry of Government of India, Ministry and public sector undertakings of Government of India, and public sector undertakings in between themselves. 10. Paragraph No. 4 of the judgment cannot be read to m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fferent Departments of the Union of India, or a Department and public sector undertaking of the Union of India, or public sector undertakings of the Central Government amongst themselves. 13. The fourth decision in line is in the case of Chief Conservator of Forests, Government of A. P. v. Collector [2003] 3 SCC 472 where a dispute arose as to certain lands, the State of Andhra Pradesh, through the Chief Conservator of Forests, Government of Andhra Pradesh, claiming to be in possession of those lands, and legal representatives of one Shri Raja S. V. Jagannadha Rao claiming to be the owners of the lands as pattedars. The Revenue Department, through the Collector, Mahboobnagar district, accepted the claim made by the pattedars on the basis of a report by the Commissioner of Survey, Settlement and Land Records, and the said decision was accepted by the Government of Andhra Pradesh, but the Chief Conservator of Forests was of the view that the opinion expressed by the Commissioner of Survey, Settlement and Land Records was not correct and thus filed a writ petition in the High Court of Andhra Pradesh challenging the said decision. The pattedars had also carried the matter throu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Committee and its clearance for litigation. Government may include a representative of the Ministry concerned in a specific case and one from the Ministry of Finance in the Committee. Senior officers only should be nominated so that the Committee would function with status, control and discipline. 15. The facts of this appeal, noticed above, make out a strong case that there is a felt need of setting up of similar committees by the State Government also to resolve the controversy arising between various departments of the State or the State and any of its undertakings. It would be appropriate for the State. Governments to set up a committee consisting of the Chief Secretary of the State, the Secretaries of the departments concerned, the Secretary of Law and where financial commitments are involved, the Secretary of Finance. The decision taken by such a committee shall be binding on all the departments concerned and shall be the stand of the Government". 14. Thereafter, the apex court held that the Chief Conservator of Forests, independent of the State of Andhra Pradesh, had no authority or locus standi to approach the court by initiating legal proceedings in his own name. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnment, or a State Government undertaking on the other hand. 17. Thus, the position as obtaining on a reading of all the five cases wherein the apex court has made orders or delivered judgment, makes it clear that in four matters the dispute was relatable to a public sector undertaking of the Central Government and a department of the Central Government, while in the fifth matter the dispute was between two departments of the State Government of Andhra Pradesh. The directions made by the apex court and the observations in the four orders and the judgment have to be read in the context and in the backdrop of the controversy before the apex court including the litigants who were before the apex court. There is not a single order made by the apex court which relates to a dispute between the Union of India and a State, or a department of the Union of India and a State, or a public sector undertaking of the Union of India and a State, or between two States inter Se, the term "State" here to mean and include the State Government, a department of the State Government or an undertaking of the State Government. 18. Hence, it is not possible to expand the scope of directions made by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appeal is not admitted, is an order which is not even in consonance with the view finally taken by the Rajasthan High Court. The court has already recorded hereinbefore that the court does not agree with the view expressed by the Rajasthan High Court. 21. However, apart from the aforestated position in law emerging on a reading of various orders and judgments of the apex court, there is one more fundamental aspect of the matter which requires to be stated. The Tribunal is a creature of statute as can be seen from the provisions of section 252(1) of the Act. The said provision mandates that the Central Government shall constitute an Appellate Tribunal comprising of as many judicial and accountant members as the Central Government may think fit for the purpose of exercising the powers and discharge the functions conferred on the Appellate Tribunal by the Act. In other words, the Tribunal is constituted under the provisions of section 252(1) of the Act by the Central Government. Such a constituted Tribunal is required to exercise powers and discharge the functions conferred on the Tribunal by the Act. The Tribunal, therefore, cannot exercise powers or discharge functions which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rm "thereon" in the said provision has come up for consideration a number of times before the apex court and various High Courts. To put it simply, the law on the subject is to the effect that the term "thereon" denotes the subject-matter of appeal and circumscribes powers and jurisdiction of the Tribunal to deal with the subject-matter of appeal. The Tribunal does not have powers to record any finding/direction in case of any other person not before the Tribunal, nor does the Tribunal have powers to lay down anything in relation to an assessment year which is not before the Tribunal. The Tribunal cannot issue any directions to any party beyond the subject-matter of appeal. Therefore, this provision cannot be read to mean that the Tribunal has powers to hold that an appeal is not admitted. 25. Section 255 of the Act deals with the procedure of the Tribunal and under sub-section (1) thereof it is provided that the powers and functions of the Tribunal may be exercised and discharged by Benches constituted by the President of the Tribunal. Namely, it is the President of the Tribunal, who has the prerogative to constitute a Bench and such a Bench is required to exercise the powers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an appeal is not to be admitted. 29. Rules 23, 24 and 25 of the Income-tax (Appellate Tribunal) Rules deal with hearing of the appeal and when one reads all the three Rules together it becomes clear that the Tribunal has to hear the appeal on the merits and only in stipulated circumstances can the Tribunal dispose of the appeal exparte. 30. At the end of the Income-tax (Appellate Tribunal) Rules, vide Circular bearing F. No.114-AD(AT)/69, dated April 13, 1970, various guidelines titled as notes are laid down. Even the said guidelines do not indicate anywhere that there are any powers available with the Tribunal to dismiss an appeal by holding that it is not admitted. To the contrary on reading of the said guidelines it becomes clear that fifing of an appeal is automatic once the statutory requirements are complied with. 31. A conjoint reading of the provisions of the Act noted hereinbefore and the Income-tax (Appellate Tribunal) Rules referred to hereinabove, it becomes clear that the Tribunal being a creature of the statute, having been constituted under the provisions of the Act cannot exercise any powers beyond the powers available under the Act and cannot discharge ..... X X X X Extracts X X X X X X X X Extracts X X X X
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