Case: Commissioner Of Trade And Taxes Vs. Tirath Ram Ahuja Pvt. Ltd

3. The challenge by the Revenue is to an order of the High Court of Delhi by which the High Court has allowed the writ petitions filed by the respondentsAssessees challenging the orders issued by the Designated Authority i.e. Additional Commissioner of Income Tax rejecting the applications filed by the Respondent writ petitioners under the Delhi Tax Compliance Achievement Scheme, 2013 (hereinafter referred to as "the Amnesty Scheme"), details of which are noted below.4. Under Section 107 of the Delhi Value Added Tax Act, 2004 (hereinafter referred to as "the DVAT Act"), the Government of National Capital Territory of Delhi ("GNCTD" for short) is empowered to notify amnesty scheme(s) covering payment of tax, interest, penalty or any other dues under the DVAT Act relating to any period ending before 1st April, 2013.5. In exercise of powers under Section 107 of the DVAT Act, an Amnesty Scheme was notified by the GNCDT on 20th September, 2013. Clause 2(c) of the Amnesty Scheme which defines the designated authority; clause 4 which delineates the procedure for making declaration and payment of tax dues; clause 5 which deals with immunity from interest, penalty and other proceedings; and the provisions of clause 8 which deals with the failure to make true declarations would require a consideration of the Court.There is no dispute between the parties that on the basis of the declaration filed by the respondentAssessee, the Designated Authority had issued the "acknowledgement of discharge" in favour of the respondentAssessee. However, on 16th January, 2015 a show cause notice in exercise of powers under clause 8 of the Amnesty Scheme was issued by the Additional Commissioner (Spl. Zone), Department of Trade and Taxes, New Delhi to which the respondentAssessee submitted its reply on 27th January, 2015. In the reply so submitted, the respondentAssessee did not raise any question with regard to the jurisdiction of the Additional Commissioner to issue the show cause notice under clause 8. The adjudication was finalized by order dated 11th February, 2015 which was served to the Assessee. The Assessee then filed the writ petitions in question before the High Court contending, inter alia, that the show cause dated 16th January, 2015 was unauthorized and without jurisdiction inasmuch as the power to issue such notice under clause 8 is vested with the Commissioner and the same had not been delegated to the Designated Authority i.e. the concerned Additional Commissioner. The said contention found favour with the High Court. Accordingly, the writ petitions filed by the respondentsAssessees were allowed and the impugned consequential proceedings were interfered with. The High Court also took the view that as under clause 8(3) of the Amnesty Scheme show cause notice has to be issued within one year of the date of declaration which in the present case was made on 18th February, 2014 and 28th February, 2014, respectively, issuance of any further/fresh show cause notice was time barred. Aggrieved the Revenue is in appeal before this Court.

Court's reasoning:
The Government order dated 30th April, 2014 relied upon by the Revenue as a delegation of the power under clause 8, on a plain reading thereof, is only an empowerment of a particular Additional Commissioner of a particular Zone (a Zone may have several Additional Commissioners) to hear and decide applications filed under the Scheme. The said G.O dated 30th April, 2014 cannot be construed to be an exercise of delegation of powers vested in the Commissioner under Clause 8 to Designated Authority. The plain language contained in the said G.O is capable of sustaining the above conclusion. We will, therefore, have to hold that the Additional Commissioner who had issued the show cause notice under clause 8 in the present case was not competent to do so and on that basis we affirm the conclusion of the High Court on the said question.15. This will bring us to a consideration of the second issue arising in the case details of which have already been mentioned in preceding paragraphs of the present order.16. The declarations in the present case were issued to the assessee on 18th February, 2014 and 28th February, 2014 respectively. The show cause notice under Clause 8 was issued on 16th January, 2015. The reply was submitted by theon 27th January, 2015. The adjudication was completed by the Order dated 11th February, 2015 against which thefiled a writ petition before the High Court on 4th March, 2015. In the reply filed by theto the show cause notice or in the proceedings pursuant thereto, as already mentioned, no objection was taken by the assessee to the power and jurisdiction of the Additional Commissioner to issue the notice in question. The adjudication order, therefore, did not deal with the said issue. It is only after the period of one year from the date of declaration was over that the writ petition was filed wherein the question of jurisdiction of the Additional Commissioner was raised for the first time. It is in these facts that the High Court took the view that as the period of limitation prescribed by Clause 8(3) was over, fresh proceedings stood barred by time.17. While it is correct that the failure to raise the issue of jurisdiction by the assessee will not necessarily clothe the Additional Commissioner with the jurisdiction if the same is not contemplated by law, there are certain aspects of the case which need to be considered. Had the assessee raised the question of jurisdiction in its reply or in the course of the adjudication proceedings there would have been still time for the Commissioner to cure the defect and issue a valid notice. Cases under Amnesty Scheme would fall outside the arena of ordinary and routine matters and, therefore, it is possible to attribute a genuine mistake on the part of the Additional Commissioner in invoking jurisdiction under Clause 8 of the Amnesty Scheme.Having considered the matter and the manner in which this Court has approached the issue arising in Grindlays Bank Ltd. (supra) we are of the view that Clause 8(3) of the Amnesty Scheme will have no application to the present case where the initial show cause notice was issued within time and its legitimacy was not contested by theHad such legitimacy been questioned at the stage of reply or even in the course of the adjudication proceedings, there would still have been room/ time for the revenue to correct the error that had occurred. A rectified Notice could even have been issued after the order of adjudication was passed on 11th February, 2015. The close proximity of time between the reply submitted by the assessee to the Show Cause Notice (27.01.2015) and the proceedings in adjudication Revenue on the one hand and the date of filing of the Writ Petition (4.3.2015) would permit us to infer that the conduct of the assessee in raising the issue in the writ petitions and not earlier was not entirely bonafide. Thetherefore, cannot be allowed to take advantage of its own wrong. The courts exercising extraordinary jurisdiction cannot be understood to be helpless but concede to the assessee an undeserved victory over the Revenue. The power of the High Court under Article 226 of the Constitution, wide and pervasive as it is, should have enabled the High Court to appropriately deal with the situation and issue consequential directions permitting initiation of fresh proceedings, if the Revenue was so inclined. The High Court having failed to so act, we now correct the error and issue directions to enable the Revenue to issue a fresh notice to the assessee under clause 8 of the Amnesty Scheme, if it so desires and is so advised.