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TMI Blog2009 (11) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... he Income Tax Department/R-3. JUDGMENT SANJAY KISHAN KAUL, J. (Oral) - The present petition under Article 226 of the Constitution styled as a Public Interest Litigation has been filed seeking multifarious reliefs including of declaration arising from the grievance of the petitioner about the mode and manner in which the governance of international treaties are sought to be made applicable to the citizens of India. It is the case of the petitioner, who appears in person, that the powers and authority of the Central Government are being abused and are sought to be exercised in violation of the constitutional mandate by entering into Double Taxation Avoidance Agreements (more specifically in relation to the provisions relating to Mutual Agreement Procedure), ratification and adoption of Uruguay Round Final Act (WTO Treaty) and the provisions relating to the MAP set forth in the CBDT's Instruction as also under the Income Tax Rules 1962. 2. The petitioner took us through the pleadings and the various synopsis filed by him to firstly contend that in matters of taxation the mode adopted by the Central Government was impermissible. The petitioner is, however, conscious of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd sub-section (2) was inserted by the Finance Act, 1991 with retrospective effect from 1-4-1972. CBDT Circular No. 621 dated 19-12-1991 explains its purpose as follows "43. Taxation of foreign companies and other non-resident taxpayers.— Tax treaties generally contain a provision to the effect that the laws of the two contracting States will govern the taxation of income in the respective State except when express provision to the contrary is made in the treaty. It may so happen that the tax treaty with a foreign country may contain a provision giving concessional treatment to any income as compared to the position under the Indian law existing at that point of time. However, the Indian law may subsequently be amended, reducing the incidence of tax to a level lower than what has been provided in the tax treaty. 43.1. Since the tax treaties are intended to grant tax relief and not put residents of a contracting country at a disadvantage vis-à-vis other taxpayers, Section 90 of the Income Tax Act has been amended to clarify that any beneficial provision in the law will not be denied to a resident of a contracting country merely because the corresponding provision in the tax t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Central Excise Act and Sales Tax Act, there are provisions for exemption from the levy of tax. Therefore, we are unable to accept the contention that the delegatee of a legislative power cannot exercise the power of exemption in a fiscal statute." 3. The petitioner, thus, fairly states that though the aspect sought to be urged by him is covered by these observations his grievance is that the enunciation of law in this behalf is not correct. The petitioner informs us that his endeavour to seek review of this judgement and then file a curative petition has been unsuccessful. We have put to the petitioner that once the aspect of mode and manner of implementation of treaties relating to double taxation forms subject matter of the aforesaid adjudication, it is not permissible for us to go into this question and the hierarchy of courts must be respected where the enunciation of law by the highest court is binding on us. The petitioner states that these are in the nature of observations which are obiter and does not reflect the ratio. We are unable to accept this plea on a bare reading of the judgement. 4. The second aspect urged by the petitioner arises from the plea relating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Once again, we are unable to persuade ourselves to agree with the petitioner that the observations can be categorized as stray observations. 6. We may note that learned counsels for the respondents both in the counter affidavit and only before us have sought to canvas a case of gross delay and laches on the part of the petitioner in approaching the Court and thus the petitioner being disentitled to the adjudication of his grievance. The answer to this on behalf of the petitioner is that this is continuing cause of action and especially where no bar of limitation arises nothing precludes the Court from examining the same. This aspect we are not required to analyze in view of our opinion that by and large the matters sought to be raised by the petitioner are covered by observations of the Supreme Court albeit not reflecting the correct legal position as per the petitioner. 7. One of the serious challenges sought to be raised by the petitioner is that the system of governance in our country has to be satisfied on the touchstone of the Constitution. The Parliament, the Executive and the Judiciary are all creations of the Constitution which is supreme. It is, thus, the submissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or requiring its approval is a matter to be left to the Government and the Parliament. It would not be within the domain of exercise of writ jurisdiction under Article 226 of the Constitution of India of this Court to issue any direction in that behalf. However, insofar as the fundamental question of any act of the Government in pursuance to an international treaty resulting in violation of any provision of the Constitution or not satisfying the test of being in compliance with the doctrine of basic structure is concerned, the respondents do not even dispute the said position and have drawn our attention to their counter affidavit where while dealing with the treaty making power of the Union executive and the Parliament it has been stated in para 1 "it is humbly submitted that the Government of India can only enter into a treaty in conformity with the constitutional provisions laid down in the Constitution of India". 10. The submission of learned counsels for the respondents is that the petition is predicated on a hypothetical exercise seeking declaration in respect of various aspects for which no declaration is required. It is their contention that this Court is not required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Legislature of any State 1 also, have power to make laws with respect to any of the matters enumerated in List III in the Seventh Schedule (in this Constitution referred to as the "Concurrent List"). (3) Subject to clauses (1) and (2), the Legislature of any State 1 has exclusive power to make laws for such State or any part thereof with respect to any of the matters enumerated in List II in the Seventh Schedule (in this Constitution referred to as the "State List"). (4) Parliament has power to make laws with respect to any matter for any part of the territory of India not included 2[in a State] notwithstanding that such matter is a matter enumerated in the State List." 12. It is, thus, submitted that the executive power of the Union extends to matters to exercise of rights by virtue of any treaty or agreement with by virtue of Article 73 (1) (b) of the Constitution of India but that is "subject of course to constitutional limitations". 13. In our considered view, the aforesaid correctly set out the legal position as enunciated by the Supreme Court with which we are bound. The respondents have correctly admitted the legal position, the petitioner canvassing the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X
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