FARMACOPIA HERBELS PVT LTD AHMEDNAGAR. vs. INCOME TAX SETTLEMENT COMMISSION AND ORS

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

APPELLATE SIDE, BENCH AT AURANGABAD

WRIT PETITION NO. 474 OF 2009

Farmacopia Herbels Private Limited 21, Kisan Kranti Building, Station Road, Ahmednagar ...Petitioner Through authorized signatory Versus

1 Income Tax Settlement Commission, Additional Bench, 2nd floor, Mahalaxmi Chambers, S.K. Rathod Marg, Mahalaxmi Mumbai 400 034. 2. The Commissioner of Income Tax City-II, Vardhan Building, 9th Floor, M.I.D.C. Wagle Estate, Thane (West), 400 604 3 The Income Tax Officer, Ward 3 (2) Vardhan, 9th Floor, M.I.D.C. Wagle Estate, Thane (West), 400 604 4 Union of India Aayakar Bhavan, 2nd floor, M.K. Road, Churchgate, Mumbai 400 020 ...Respondents ..... Mr. S.P. Deshmukh, advocate for the petitioner Mr. Alok Sharma, Standing counsel for respondents. ..... CORAM: A.M. KHANWILKAR & S.S. SHINDE, JJ.

2 DATED: 8TH FEBRUARY, 2010 PER COURT:- 1 Heard counsel for the parties. 2. Rule. By consent, Rule made returnable forthwith. Counsel for the respondents waives service. 3 By this petition under Article 226 of the Constitution of India, the petitioner has challenged the notice dated 9.6.2008 issued under Section 254HA of the Income Tax Act, as also further relief of reading down Sections 245D (4A) and 245HA of the Act as amended/inserted by Finance Act 2007 and be held that time limit of 31.3.2008 prescribed therein is purely directory and non passing of an order under Section 245D(4) on or before that date does not result in the settlement application being abated. 4 The issue has now been answered by the Division Bench of our High court in the case of Star Television News Limited Vs. Union of India, in writ petition No. 952 of 2008, decided on 7th August, 2009. The operative part of the said decision reads thus;-

3 “ From the above discussion having arrived at a conclusion that fixing the cut off date as 31st March, 2008 was arbitrary the provisions of Section 245HA(1)(iv) to that extent will be also arbitrary. We have also held that it is possible to read down the provisions of Section 245HA(1)(iv) in the manner set out earlier. This recourse has been taken in order to avoid holding the provisions as unconstitutional. Having so read, we would have to read Section 245HA(1)(iv) to mean that in the event the application could not be disposed of for any reasons attributable on the part of the applicant who has made an application under Section 245C. Consequently only such proceedings would abate under Section 245HA(1) (iv). Considering the above, the Settlement Commissioner to consider whether the proceedings had been delayed on account of any reasons attributable on the part of the Applicant. If it comes to the conclusion that it was not so, then to proceed with the application as if not abated. Respondent No.1 if desirous of early disposal of the pending applications, to consider the appointment of more Benches of the Settlement Commission, more so at the Benches where there is heavy pendency like Delhi and Mumbai.” 5 Applying the same principle, we set aside the impugned notice and relegate the parties before the Settlement Commissioner to consider whether the proceedings resorted to by the petitioner had

4 been delayed on account of any reasons attributable to the petitioner as such. If the Settlement Commissioner is of the view that it was not so then would be obliged to proceed with the hearing of the case further on merits and not to treat the same having abated. 6. Accordingly this petition is disposed of on the above terms. Rule is made absolute. ( S. S. SHINDE. J.) (A. M. KHANWILKAR, J.)

rlj/