Appellant:commissioner Of Income Tax, Bhopal v. Respondent:m.p. Rajya Van Vikas Nigam, Bhopal

THE HIGH COURT OF MADHYA PRADESH: JABALPUR(Division Bench) ITA No. 22/2010 APPELLANT:Commissioner of Income Tax, Bhopal VersusRESPONDENT:M/s M.P. Rajya Van Vikas Nigam, Bhopal With ITA No. 24/2010 APPELLANT:Commissioner of Income Tax, Bhopal Versus RESPONDENT:M.P. Rajya Van Vikas Nigam, Bhopal ------------------------------------------------------------------------------------------- Coram: Hon’ble Shri Justice Ajay Kumar Mittal, Chief JusticeHon’ble Shri Justice Vijay Kumar Shukla, Judge ------------------------------------------------------------------------------------------- Appearance: Shri Ajay Yadav, Advocate on behalf of Shri Sanjay Lal, Advocate for the appellant. Shri Abhijeet Shrivastava, Advocate for the respondent. ------------------------------------------------------------------------------------------- O R D E R (Oral)[04.02.2020] Per: Ajay Kumar Mittal, Chief Justice: Both the present appeals preferred by the Revenue under Section260A of the Income Tax Act, 1961 (in short “the Act”) are involvingidentical substantial questions of law framed vide order dated 03.03.2014and therefore, are disposed of by this common order. 2.ITA No.22/2010 has arisen out of an order dated 22.07.2009 passed bythe Income Tax Appellate Tribunal, Indore (for brevity “the Tribunal”) inITA No.03/IND/2000 (assessment year 2005-06) whereas ITA No. 24/2010 has arisen out of an order dated 17.07.2009 passed by the Tribunal in ITANo.130/Ind/2009 and ITA No.269/Ind/2009 (Assessment Year 2006-07). 3.For the sake of brevity, the facts are taken from ITA No.22/2010. Theappeal was admitted on 03.03.2014 for determination of the two substantialquestions of law, which read as under:- “1.Whether the Income Tax Appellate Tribunal was right indismissing the appeal filed by the Revenue only on theground that approval of the committee on disputeconstituted by the Central Govt. has not been obtained?dismissing the appeal filed by the Revenue only on theground that approval of the committee on disputeconstituted by the Central Govt. has not been obtained? 2.The question further as to whether this finding can beupheld or can be termed as good in view of thesubsequent judgment of the Supreme Court in the case ofElectronics Corporation of India Ltd. vs. Union ofIndia (2011) 332 ITR 0058?” upheld or can be termed as good in view of thesubsequent judgment of the Supreme Court in the case ofElectronics Corporation of India Ltd. vs. Union ofIndia (2011) 332 ITR 0058?” 4.The learned Tribunal dismissed the appeal of the Revenue vide orderdated 22.07.2009 as not maintainable, however, with a liberty to revive theappeal upon obtaining the clearance of the CoD (Committee on Dispute) orwith the evidence that such a committee does not exist or is in the process. 5.A similar question had come up for consideration before this Court inMAIT No.90/2006 (Commissioner of Income Tax, Jabalpur vs. NorthernCoal Fields Limited) decided on 06.01.2020 wherein, the Bench consideredthe law laid down by the Supreme Court in Electronics Corporation ofIndia Limited vs. Union of India and others (2011) 3 SCC 404 in which itwas held that approval of the CoD in terms of its earlier judgment was notrequired.The relevant extract of the Division Bench decision reads asunder:- 7.Undoubtedly, the Constitution Bench of the Supreme Court inElectronics Corporation (supra) has reversed its earlier decision in ONGC’s case (supra) and held that approval of the COD in terms of itsearlier judgment was not required. The relevant extract of the said decisionreads as under:- 5.A similar question had come up for consideration before this Court inMAIT No.90/2006 (Commissioner of Income Tax, Jabalpur vs. NorthernCoal Fields Limited) decided on 06.01.2020 wherein, the Bench consideredthe law laid down by the Supreme Court in Electronics Corporation ofIndia Limited vs. Union of India and others (2011) 3 SCC 404 in which itwas held that approval of the CoD in terms of its earlier judgment was notrequired.The relevant extract of the Division Bench decision reads asunder:- 7.Undoubtedly, the Constitution Bench of the Supreme Court inElectronics Corporation (supra) has reversed its earlier decision in ONGC’s case (supra) and held that approval of the COD in terms of itsearlier judgment was not required. The relevant extract of the said decisionreads as under:- “12. By order dated 11-9-1991, reported in Oil and Natural GasCommission v. CCE, 1992 Supp (2) SCC 432, this Court noted that“public sector undertakings of the Central Government and theUnion of India should not fight their litigations in court” (SCC p.432, para 3). Consequently, the Cabinet Secretary, Government ofIndia was “called upon to handle the matter personally”. 13. This was followed by the order dated 11-10-1991 in ONGC-IIcase (1995 Supp (4) SCC 541, Oil and Natural Gas Commission v. CCE), where this Court directed the Government of India to“set up a Committee consisting of representatives from theMinistry of Industry, the Bureau of Public Enterprises and theMinistry of Law, to monitor disputes between Ministry andMinistry of Government of India, Ministry and public sectorundertakings in between themselves, to ensure that no litigationcomes to court or to a tribunal without the matter having beenfirst examined by the Committee and its clearance for litigation”(SCC pp. 541-42, para 3). *** *** *** 15. By another order dated 20-7-2007 (Oil and Natural GasCommission v. City & Industrial Development Corpn. MaharashtraLtd. - (2007) 7 SCC 39 case) this Court extended the concept ofdispute resolution by High-Powered Committee to amicably resolvethe disputes involving the State Governments and theirInstrumentalities. The idea behind the setting up of this Committee,initially, called a "High-Powered Committee" (HPC), later on calledas "Committee of Secretaries" (CoS) and finally termed as"Committee on Disputes" (CoD) was to ensure that resources of theState are not frittered away in inter se litigations between entities ofthe State, which could be best resolved, by an empowered CoD. Themachinery contemplated was only to ensure that no litigation comesto court without the parties having had an opportunity ofconciliation before an in-house committee. [See SCC paras 3-4 ofthe order dated 7-1-1994 in (2004) 6 SCC 437, Oil and Natural GasCommission v. CCE case]. 16. Whilst the principle and the object behind the aforestated ordersis unexceptionable and laudatory, experience has shown that despitebest efforts of the CoD, the mechanism has not achieved the resultsfor which it was constituted and has in fact led to delays in litigation. We have already given two examples hereinabove. Theyindicate that on same set of facts, clearance is given in one case andrefused in the other. This has led a PSU to institute a SLP in thisCourt on the ground of discrimination. We need not multiply suchillustrations. 16. Whilst the principle and the object behind the aforestated ordersis unexceptionable and laudatory, experience has shown that despitebest efforts of the CoD, the mechanism has not achieved the resultsfor which it was constituted and has in fact led to delays in litigation. We have already given two examples hereinabove. Theyindicate that on same set of facts, clearance is given in one case andrefused in the other. This has led a PSU to institute a SLP in thisCourt on the ground of discrimination. We need not multiply suchillustrations. 17. The mechanism was set up with a laudatory object. However,the mechanism has led to delay in filing of civil appeals causing lossof revenue. For example, in many cases of exemptions, the IndustryDepartment gives exemption, while the same is denied by theRevenue Department. Similarly, with the enactment of regulatorylaws in several cases there could be overlapping of jurisdictionsbetween, let us say, SEBI and insurance regulators. Civil appeals lieto this Court. Stakes in such cases are huge. One cannot possiblyexpect timely clearance by CoD. In such cases, grant of clearance toone and not to the other may result in generation of more and morelitigation. The mechanism has outlived its utility. 18. In the changed scenario indicated above, we are of the viewthat time has come under the above circumstances to recall thedirections of this Court in its various Orders reported as (i) 1995Supp (4) SCC 541, Oil and Natural Gas Commission v. CCE dated11.10.1991, (ii) (2004) 6 SCC 437, Oil and Natural Gas Commissionv. CCE, dated 7.1.1994 and (iii) (2007) 7 SCC 39, ONGC-IV dated20.7.2007.” 8. Since the Supreme Court in Electronics Corporation (supra) hasrecalled its all earlier judgments whereby following the decision inONGC’s case (supra) reported in 1992 Supp (2) SCC 432, direction wasissued to resort to mechanism of settlement of inter/intra governmentdisputes by referring matter to Committee on disputes and the saidcommittee was set up, therefore, the judgment in ONGC’s case (supra)no longer holds the field and it would be deemed that there was norequirement of COD approval for filing the appeal. The substantialquestion of law framed is thus, answered accordingly. 6.In view of the above, both the substantial questions of law areanswered in favour of the appellant. The impugned orders passed by theTribunal dismissing the appeals only on the ground that there was noclearance of the CoD, are unsustainable and the same are hereby set aside. The matters are remanded to the learned Tribunal to re-decide the appeals onmerit in accordance with law. 7.Accordingly, both the present appeal stand allowed and disposed of. Let a copy of this order be retained in the record of ITA No.24/2010. (Ajay Kumar Mittal) (Vijay Kumar Shukla)Chief Justice Judge S/ Digitally signed by SACHIN CHAUDHARY Date: 2020.02.19 12:05:31 +05'30'