Madhya Pradesh High Court Judgments — 2021

The High Court held that the impugned order passed by the ITAT, Indore Bench, was non-speaking and therefore unlawful. The Court found that while the ITAT's order mentioned the grounds of appeal and the stages of the case, paragraph 7, which was supposed to contain the reasoning, merely stated that the Tribunal had given thoughtful consideration to the CIT(A)'s findings. However, it failed to record specific reasons for dismissing the appeal, concluding cryptically that there was no infirmity in the CIT(A)'s order. The Court emphasized that reasons are crucial for judicial orders to disclose the decision-maker's mind, ensure transparency, facilitate judicial review, and uphold the principle of natural justice, citing the Apex Court's decision in Kranti Associates Private Limited. The ratio decidendi is that a quasi-judicial authority must provide cogent, clear, and succinct reasons to support its conclusions, and a mere assertion of consideration without elaboration is insufficient. Consequently, the High Court set aside the ITAT's order and directed the ITAT to decide ITA No.164/Ind/2018 afresh by passing a speaking order, ensuring a hearing if the Tribunal's composition had changed. The Court explicitly stated it had not commented on the merits of the claim.

The High Court held that while the proviso to Section 142(2A) mandates a reasonable opportunity of being heard, which was admittedly afforded to the petitioner, the contention that the order directing the special audit needs to be a speaking order with detailed reasons was not accepted. The Court reasoned that the proviso, added consequent to the Supreme Court's decision in Rajesh Kumar, primarily ensures that the assessee is given an adequate opportunity to present their objections. The Court found that the material on record indicated that substantial opportunity was given, and the petitioner's objections were considered, implying an application of mind by the respondents. Therefore, the argument of non-application of mind or absence of reasons for passing the order was deemed unsustainable. Consequently, the Court found no grounds to interfere with the impugned order.

The High Court held that there was no explanation for the petitioner's failure to avail the statutory remedies of appeal within the prescribed periods for both the assessment order and the order rejecting the remission application. The Court noted that the petitioner had attempted to club two independent causes of action, both of which were appealable under the Central Excise Act. The Court found that challenging the assessment order under Article 226, under the pretext of challenging the remission rejection order, was not permissible. Furthermore, the Court observed that the contentions advanced by the petitioner were factual in nature, requiring adjudication by the appropriate adjudicating authority rather than by the High Court in its extraordinary constitutional jurisdiction. The Court concluded that the petitioner's course of action amounted to a misuse of the process of law, disentitling them from invoking the equitable jurisdiction under Article 226. Consequently, the writ petition was dismissed as lacking merit.

The High Court dismissed the review petitions. The Court noted that the power of review is limited and can only be exercised for an error apparent on the record or other ingredients consistent with Order 47 Rule 1 of the Code of Civil Procedure. The Court repeatedly questioned the learned counsel for the review petitioners regarding the preparation of the scrutiny report and whether it fell within the ambit of Clause 10(e) of the Circular. However, no response was received, and no argument was advanced to bring the matter within the principles of review jurisdiction. Consequently, the Court found no basis to exercise its review powers and dismissed the petitions.

The High Court dismissed the bail applications. The Court noted that the investigation was pending and no challan had been filed. Having regard to the nature of the material on record, the Court was of the opinion that releasing the applicants during the pendency of the investigation would not be proper, as the prosecution was in the process of collecting further evidence. The Court did not decide the legal arguments regarding the bailability of the offence or the admissibility of statements under Section 108 of the Customs Act, as the primary reason for dismissal was the ongoing investigation. The applicants were granted liberty to renew their prayer after the investigation is complete and the challan is filed. No specific finding was made on the arguments concerning the GST invoices or the impact of the 2013 amendment on the bailability of the offence.

The High Court enhanced the compensation, reassessing the deceased's notional income as a housewife and awarding amounts for loss of consortium and estate. The court directed the Insurance Company to deposit the enhanced compensation.

The High Court allowed the application for condonation of delay (I.A. No. 177/2021) and, consequently, allowed the review petition, recalling the order dated 25.11.2019. The Court acknowledged that the appeal was withdrawn pursuant to a policy where appeals with a tax effect below Rs. 1 Crore were to be withdrawn, but it was not disputed that the tax effect in this case was more than Rs. 1 Crore. While the Revenue was found to be lethargic, the Court recognized that liberty to seek revival was consciously reserved. To compensate the Assessee for the inconvenience caused by the delay, the Revenue was directed to pay Rs. 5,000/- as costs within four weeks. The Court also noted that the Revenue could recover this cost from negligent officers. The Court did not explicitly decide on the Assessee's argument regarding the inapplicability of COVID-19 relaxation to the original order date, but implicitly extended it by allowing the condonation.

The High Court allowed the application for condonation of delay and, consequently, allowed the review petition, recalling the order dated 25.11.2019. The Court acknowledged that the Revenue had been lethargic in filing the review petition and the condonation application. However, it was persuaded by the fact that the original appeal was withdrawn pursuant to a policy circular (Circular No.17/2019) which had a condition based on tax effect. It was not disputed that the tax effect in this case exceeded Rs.1 Crore, making the withdrawal potentially erroneous. The Court also noted that liberty to revive the appeal was consciously reserved. To compensate the assessee for the inconvenience caused by the delay, the Revenue was directed to pay Rs.5000/- as costs within four weeks, with the liberty to recover this amount from negligent departmental officers. The review petition was disposed of with these directions.

The High Court of Madhya Pradesh held that the writ petition had become infructuous. The reasoning was based on the undisputed fact, conceded by the petitioner's counsel, that the payment of interest, which formed the basis of the petition, had since been made. Since the underlying issue was resolved by the subsequent action of the petitioner, there was no longer a live controversy for the court to adjudicate. Consequently, the petition was dismissed as infructuous. The ratio decidendi is that a writ petition seeking a specific relief that has subsequently been granted or rendered moot by the actions of the petitioner will be dismissed as infructuous. No specific operative directions were issued other than the dismissal of the petition. No issues were expressly left undecided.