Https://Hcservices.ecourts.gov.in/Hcservices v. The Joint Commissioner Of Income Tax, Tambaram Range, Tambaram, Chennai

IN THE HIGH COURT OF JUDICATURE OF MADRAS DATED: 12.07.2019 CORAM: THE HONOURABLE MR. JUSTICE M.S. RAMESHW.P.Nos.4699, 4700, 2492 of 2007 and 6192 of 2008 andM.P.Nos.1 to 1 of 2007 Ramjee Leathers & Supplies,No.118/4, General Patters Road,Mount Road, Chennai - 600002.Rep. by its PartnerMr.R.Damodaran...Petitioner inW.P.Nos.4699 & 4700/2007M/s.JAY AR Enterprises,No.7, N.S.Krishnan Street,Easwaran Nagar,Pammal, Chennai - 600075.Rep. by its Partner,Janardhan Rao...Petitioner inW.P.No.2942/2007M/s.Hidesign,Rep. by its Partner,Mr.Dilip kapur,Odiampet Village,Villianur,Pondicherry - 605110....Petitioner inW.P.No.6192/2008 1. Union of India, Rep. by its Secretary, Ministry of Finance, North Block, New Delhi.2. The Central Board of Direct Taxes, Ministry of Finance, North Block, New Delhi.3. The Assistant Commissioner of Income Tax, Company Circle-I(1), Aayakar Bhavan, No.34, Nungambakkam High Road, Chennai - 600034....Respondents inW.P.Nos.4699 & 4700/2007 https://hcservices.ecourts.gov.in/hcservices/ Vs 1. The Joint Commissioner of Income Tax, Tambaram Range, Tambaram, Chennai - 600045.2. Union of India, Rep. by its Secretary, Ministry of Finance, Department of Revenue, Central Secretariat, North Block, New Delhi- 110001....Respondents in W.P.No.2942/20071. The Assistant Commissioner of Income Tax, Circle I, Puducherry.2. Union of India, Rep. by its Secretary, Ministry of Finance, Department of Revenue, Centrl Secretariat, North Block, New Delhi- 110001. 3. The Central Board of Direct Taxes, Rep. by its Secretary, Central Secretariat, North Block, New Delhi - 110001....Respondents inW.P.No.6192/2008 Prayer in W.P.No.4699 of 2007: Writ Petition filed underArticle 226 of the Constitution of India, for issuanceof Writ of Certiorarified Mandamus, calling for therecords comprised in the order of assessment for the yearassessment year 2004-2005 dated 29.11.2006 as made inPAN/GIR No. AAAFR523M on the file of the 3rd respondent,quash the same and consequently direct the 3rd respondentto pass fresh orders of assessment without reference tothe provisions attached to Section 4 of the Amendment Actas the same is unconstitutional and invalid. Prayer in W.P.No.4700 of 2007: Writ Petition filed underArticle 226 of the Constitution of India, for issuanceof Writ of Declaration, to declare the followingconditions and restrictions introduced vide Section 4 -Amendment of Section 80HHC(3)(i), Income Tax Act, 1961,https://hcservices.ecourts.gov.in/hcservices/introduced vide Taxation Laws Amendment Act, 2005 (Act 55of 2005) dated 28.12.2005 - "(a) he had an option to choose either the duty drawbackor the duty entitlement pass book scheme, being dutyremission scheme; and (b) the rate of drawback credit attributable to thecustoms duty was higher than the rate of credit allowableunder duty entitlement pass book scheme, being dutyremission scheme; (c) he had an option to choose either the duty drawbackor the duty free replenishment certificate, being dutyremission scheme; and (d) the rate of drawback credit attributable to thecustoms duty was higher than the rate of credit allowanceunder the duty free replenishment certificate, being dutyremission scheme." as ultra vires offending Article 14, Article 19(1)(g) andArticle 300-A of the Constitution of India and Section80HHC(3)(i) of the Income Tax Act, 1961. Prayer in W.P.No.2942 of 2007: Writ Petition filed underArticle 226 of the Constitution of India, for issuanceof Writ of declaration, declaring provisions of Section28 and 80HHC by the Taxation Law (Amendment) Act 2005ultra virus and violative of Articles 14, 19(1)(g), 246(1), 265 and 301 of the Constitution of India, insofar asit seeks to deny the deduction u/s 80HHC in respect ofprofit on sale of DEPB in case of exporter having exportturnover exceeding Rs.10 crores. as ultra vires offending Article 14, Article 19(1)(g) andArticle 300-A of the Constitution of India and Section80HHC(3)(i) of the Income Tax Act, 1961. Prayer in W.P.No.2942 of 2007: Writ Petition filed underArticle 226 of the Constitution of India, for issuanceof Writ of declaration, declaring provisions of Section28 and 80HHC by the Taxation Law (Amendment) Act 2005ultra virus and violative of Articles 14, 19(1)(g), 246(1), 265 and 301 of the Constitution of India, insofar asit seeks to deny the deduction u/s 80HHC in respect ofprofit on sale of DEPB in case of exporter having exportturnover exceeding Rs.10 crores. Prayer in W.P.No.6192 of 2008: Writ Petition filed underArticle 226 of the Constitution of India, for issuanceof Writ of Certiorari, calling for the records inG.I.No.309-H/A.Y.2001-02 PAN dated 31.03.2007relating to the assessment year 2001-02 on the file ofthe 1st respondent and quashing the same, since theprovisions of Sections 3 & 4 of the Taxation Laws(Amendment) Act, 2005 are ultra vires Articles 14,19, 265and other provisions of the Constitution of India. COMMON ORDER The learned counsels appearing on either side do notdispute the fact that the issue involved in these WritPetitions is covered by a decision of the Hon'ble SupremeCourt, in the case of Commissioner of Income-tax Vs.Avani Exports reported in [2015] 58 Taxmann.com 100 (SC),wherein, the Hon'ble Supreme Court, considered thevalidity of the amendment to Section 80 HHC (3) of theIncome Tax Act, 1961, in which, third and fourth provisoto Section 80HHC were inserted by Taxation Laws (SecondAmendment) Act, 2005, with retrospective effect from 1-4-1998. By virtue of the said amendment, two categories ofexporters, viz., those, whose exports were less thanRupees Ten crores, and those exporters, whose exportturnover was more than Rupees Ten crores. It providedthat, deduction in respect of exporters having a turnoverof more than Rupees Ten crores would be available only ifthey had satisfied two conditions stipulated in third andfourth proviso to the said amendment. All the exporters,including assessees, contended that these conditions areseverable, and, therefore, these conditions should bedeclared as ultra vires. The High Court accepted thecontentions of the exporters/assessees and quashed theimpugned amendment only to extent that the operation ofsaid Section could be given effect from the date ofamendment, and not in respect of earlier assessmentyears. Accordingly, the Hon'ble Supreme Court confirmedthe view taken by the High Court, and held that theconditions stipulated in third and fourth proviso toSection 80HHC of the Income Tax Act, would not operateretrospectively, and cases of exporters, having aturnover below Rupees Ten crores, and those above RupeesTen crores, would be treated similarly during the periodprior to amendment. 2. It is not disputed that, in the instant cases,assessment pertains to the years 2001-02 and 2004-2005,i.e., prior to the amendment. Accordingly, by applyingthe ratio in the case of Commissioner of Income-tax Vs.Avani Exports (referred supra), the impugned orders ofassessment, dated 29.11.2006 and 31.03.2007, are quashed,insofar as it relates to the claim on deduction underSection 80HHC of the Income Tax Act. 3. In the result, the Writ Petitions are allowed. Nocosts. Consequently, connected Miscellaneous Petitionsare closed. Sd/- Assistant Registrar(C0) //True Copy// https://hcservices.ecourts.gov.in/hcservices/ Sub Assistant Registrar hvk 2. It is not disputed that, in the instant cases,assessment pertains to the years 2001-02 and 2004-2005,i.e., prior to the amendment. Accordingly, by applyingthe ratio in the case of Commissioner of Income-tax Vs.Avani Exports (referred supra), the impugned orders ofassessment, dated 29.11.2006 and 31.03.2007, are quashed,insofar as it relates to the claim on deduction underSection 80HHC of the Income Tax Act. 3. In the result, the Writ Petitions are allowed. Nocosts. Consequently, connected Miscellaneous Petitionsare closed. Sd/- Assistant Registrar(C0) //True Copy// https://hcservices.ecourts.gov.in/hcservices/ Sub Assistant Registrar hvk To1. The Secretary, Union of India, Ministry of Finance, North Block, New Delhi.2. The Central Board of Direct Taxes, Ministry of Finance, North Block, New Delhi.3. The Assistant Commissioner of Income Tax, Company Circle-I(1), Aayakar Bhavan, No.34, Nungambakkam High Road, Chennai - 600034.4. The Joint Commissioner of Income Tax, Tambaram Range, Tambaram, Chennai - 600045.5. The Assistant Commissioner of Income Tax, Circle I, Puducherry.+4ccs to Mrs.Hema Muralikrishnan , Advocate SR.No.59548,59549,59547,59560+2ccs to M/s.Mallika Srinivasan , Advocate SR.No.59421,59423 W.P.Nos.4699, 4700, 2492 of 2007and 6192 of 2008andM.P.Nos.1 to 1 of 2007A.SK(22/08/2019)