COMMISSIONER OF TRADE AND TAXES, DELHI vs. JAYCON INFRASTRUCTURE PVT. LTD

C.A. No.-015608-015608 - 2017Supreme Court2017 INSC 99604 October 2017Bench: HON'BLE THE CHIEF JUSTICE RANJAN GOGOI HON'BLE MR. JUSTICE ABHAY MANOHAR SAPRE HON'BLE MR. JUSTICE NAVIN SINHAAuthor: HON'BLE THE CHIEF JUSTICE RANJAN GOGOI28 pages
For Petitioner: B. KRISHNA PRASADFor Respondent: MOHINDER JIT SINGH
AI SummaryAllowed

What were the facts?

The Revenue is challenging an order of the High Court of Delhi which allowed writ petitions filed by the Assessees. The Assessees had challenged orders from the Designated Authority (Additional Commissioner of Income Tax) rejecting their applications under the Delhi Tax Compliance Achievement Scheme, 2013 (Amnesty Scheme). The Scheme, notified under Section 107 of the Delhi Value Added Tax Act, 2004, aimed to provide immunity from interest, penalty, and other proceedings upon payment of declared tax dues for periods ending before April 1, 2013. The Assessees' applications were rejected by the Designated Authority, leading to the High Court's intervention.

What did the Supreme Court hold?

The Supreme Court held that Clause 8(3) of the Amnesty Scheme, mandating the withdrawal of pending appeals/revisions, would not apply to the present case. The Court reasoned that the initial show cause notice was issued within the prescribed time, and its legitimacy was not contested by the Assessee at the appropriate stage. The Assessee's delay in raising the issue until the writ petition stage indicated a lack of bonafide, preventing them from gaining an undeserved advantage. The Court found that the High Court, in exercising its extraordinary jurisdiction under Article 226, should have permitted the Revenue to issue a fresh notice under Clause 8 of the Scheme if it was so advised, rather than quashing the order. The Supreme Court allowed the appeals, setting aside the High Court's order and directing that the Revenue may issue a fresh notice to the Assessee under Clause 8 of the Amnesty Scheme if it chooses to do so.

What were the issues?

1. Whether Clause 8(3) of the Delhi Tax Compliance Achievement Scheme, 2013, which mandates withdrawal of pending statutory appeals/revisions upon opting for the Scheme, applies to the present case where the initial show cause notice was issued within time and its legitimacy was not contested by the Assessee until the writ petition stage. (Mixed question of law and fact, turning on Clause 8(3) of the Amnesty Scheme and the conduct of the Assessee). Assessee's Contention: The Assessee argued that the rejection of their applications under the Amnesty Scheme by the Designated Authority was erroneous, implying that the Scheme's provisions, including immunity, should have been applied. Revenue's Contention: The Revenue contended that the Assessee's conduct in raising the issue of the show cause notice's legitimacy only at the writ petition stage, after the adjudication proceedings, was not bonafide. They argued that the Assessee should not be allowed to take advantage of their own delay and that the High Court should have permitted the Revenue to issue a fresh notice under Clause 8 of the Scheme.

Which sections of the Income-tax Act were involved?

Section 107,Section 36A

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
1 REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO(S).15605-15606 OF 2017 [Arising out of Special Leave Petition (Civil) No.9631-9632 of 2017] COMMISSIONER OF TRADE AND TAXES AND ORS. ...APPELLANTS VERSUS M/S AHLUWALIA CONTRACTS (INDIA) LTD. ...RESPONDENT WITH CIVIL APPEAL NO(S). 15608 OF 2017 [Arising out of Special Leave Petition (Civil) No.10485 of 2017] CIVIL APPEAL NO(S). 15607 OF 2017 [Arising out of Special Leave Petition (Civil) No.9633 of 2017]

JUDGMENT RANJAN GOGOI, J.

1.

Leave granted.

2.

A recital of the facts of the Civil Appeals arising out of Special Leave Petition (Civil) Nos.9631-9632 of 2017 alone are being made as the facts in the other connected proceedings [i.e. Civil Appeals arising out of Special Leave 2 Petition (Civil) Nos.10485/2017 and 9633/2017] are largely similar.

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 respondents – Assessees challenging the orders issued by the

The order continues below.

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