Sociedade De Fomentoindustrial Pvt. Ltd v. The Assistant Commissionerof Income-Tax And Ors

1 MCA No.882/19 in WP No.178/15-04.12.19 IN THE HIGH COURT OF BOMBAY AT GOA MISC.CIVIL APPLICATION NO. 882 OF 2019IN WRIT PETITION NO. 178 OF 2015 SOCIEDADE DE FOMENTOINDUSTRIAL PVT. LTD., ... Applicant Versus THE ASSISTANT COMMISSIONEROF INCOME-TAX AND ORS., ... Respondents Mr. N. Thakkar, Mr. P. Rao and Ms. J. Amalsadvala, Advocates for the Applicant. Ms. S. Linhares, Advocate for Respondents No.1 and 2. Coram:- M.S. SONAK & C. V. BHADANG, JJ. thDate:- 4 December, 2019 P.C.: Heard learned counsel for the parties. 2. By this civil application, the applicants seek the following reliefs: a) This Honourable Court be pleased to direct the release of theBank Guarantee of a sum of `105,95,04,390/- furnishedpursuant to order dated 08.05.2015 read with order dated14.02.2019, by modifying the said orders. 2 MCA No.882/19 in WP No.178/15-04.12.19 b) Pass such other and further Orders, as this Honourable Courtdeems fit and proper. 3. The bank guarantee of which the applicants seek release was furnished in terms of our order dated 08.05.2015, which reads asfollows: “Rule. Returnable forthwith. 2.Mrs. Asha Desai, learned counsel for theRespondent/Revenue waives service. 3. At the request of the learned counsel the petition is taken upfor final disposal. 4. All these three petitions assail three orders dated 19/12/2014issued under Section 281B of the Income Tax Act, 1961. Thefirst of the three impugned orders dated 19/12/2014 seeks toattach a refund of Rs.29,01,56,762/- due to the petitioner forthe Assessment year 2007-2008. The second of these impugnedorder dated 19/12/2014 seeks to attach a refund ofRs.51,30,88,859/- due to the petitioner for the year 2008-09and the third of the impugned order dated 19/12/2014 seeks toattach refund of Rs.25,62,58,769 due to the petitioner for theAssessment year 2009-2010. 5. We have heard Mr. Pardiwalla, learned Senior Counsel for thepetitioner at some length yesterday in respect of the above threepetitions. The petitioner had made a grievance of the manner inwhich the respondent has dealt with the petitioner in theseproceedings and particularly the fact that the Affidavits whichwere filed on 24/12/2014 in response of the petitioner’s writpetition being Nos.679/2014 and 680/2014 seeking direction 3 MCA No.882/19 in WP No.178/15-04.12.19 that the respondent gave effect to the order of the Tribunal. Atthat time the respondent/revenue filed an affidavit and assuredthe Court that effect is being given to the order of the tribunal.However, proceedings for attachment had already commencedand sanction on 12/12/2014 also obtained, from theCommissioner to the attachment of refunds due to thepetitioner, yet the same was not pointed out either to thepetitioner or to the Court. This issue could have otherwise beenresolved at that time itself. 6. We find that the petitioner is justified in making a grievancewith regard to the Respondents/Revenue's failure to disclose allfacts in its affidavit filed on 24/12/2014. We expect theRespondents/Revenue to be fair in its dealing with the Assesseeand also to this Court. This attitude is not expected of the State.At this stage except for making the aforesaid observations whichwe trust that the Revenue would bear in mind and ensure thisdoes not happen in future, we let the matter rest for the present. 6. We find that the petitioner is justified in making a grievancewith regard to the Respondents/Revenue's failure to disclose allfacts in its affidavit filed on 24/12/2014. We expect theRespondents/Revenue to be fair in its dealing with the Assesseeand also to this Court. This attitude is not expected of the State.At this stage except for making the aforesaid observations whichwe trust that the Revenue would bear in mind and ensure thisdoes not happen in future, we let the matter rest for the present. 7. The petitioner's grievance is that the total refund which has tobe adjusted for the assessment years 2007-08 to 2009-10amounts to Rs.1059504390/-. They are undergoing graveliquidity problems and are therefore in need of the funds whichare legitimately due to them today. However, to allay the fearsof the Respondent/Revenue being without any security asand when the orders on reassessment proceedings for theassessment year 2008-09 to 2011 -2012 are passed, theywere to the available willing replace security by makingimmovable properties free from encumbrances forattachment by the Revenue. However, thereafter thepetitioner submitted that they would secure the Revenue bya Bank Guarantee for 100% of the refund attached i.e.Rs.105,95,04,390/-. 8.Mrs. Asha Desai, learned counsel for the 4 MCA No.882/19 in WP No.178/15-04.12.19 Respondent/Revenue on instructions states that she has noobjection to the Revenue being secured by a BankGuarantee. 9. In view of the above, as the petitioner is furnishing a BankGuarantee of a Nationalized Bank for an amount ofRs.105,95,04,390/- to the satisfaction of the Commissioner ofIncome Tax, the respondents would vacate the attachment of therefund of Rs.105,95,04,390/- done under Section 281B of theAct. The Bank Guarantee furnished by the petitioner will bekept alive till the final disposal of the reassessment notices forthe Assessment year 2008-2009 to 2011-2012 and for eightweeks thereafter. Once the Bank Guarantee in the above terms isfurnished to the satisfaction of the Commissioner of IncomeTax, Panaji, the Respondents/Revenue will hand over the threerefund amounts aggregating to Rs.105,95,04,390/- to thepetitioner within one week thereafter. 10. Rule made absolute in the above terms. 11. Parties to act on an authenticated copy of this order.” (Emphasis supplied) 4. The applicants, took out Misc. Civil Application No.171/2019 inWrit Petition No.178/2015 seeking to replace the bank guarantee froma nationalized bank with a bank guarantee from a scheduled bank.Since the same was not opposed, necessary modification was made toour order dated 08.05.2015 and the bank guarantee from thenationalized bank was permitted to be replaced by a bank guarantee ofa scheduled bank. What is important is that even this modification waswith the consent of the parties. 5 MCA No.882/19 in WP No.178/15-04.12.19 5. From the perusal of our order dated 08.05.2015, it is very clearthat the same was a consent order. The applicant desired the raising ofattachment and for that purpose, had instituted Writ PetitionNo.178/2015 with which we are presently concerned. The applicants,as is clear from paragraph 7 of our order dated 08.05.2015, had offereda security by making available immovable properties free fromencumbrances from the attachment by the Revenue to begin with.However, thereafter, the applicants submitted that they would securerevenue by a bank guarantee in an amount of `105,95,04,390/-.Paragraph 8 of our order dated 08.05.2015 thereafter records thestatement made by Ms. Asha Desai, the learned counsel for theRevenue on instructions, that she has no objection to revenue beingsecured by a bank guarantee. From all this, as also, subsequent orderdated 14.02.2019, it is very clear that an order dated 08.05.2015 was aconsent order. The order was made simply because the applicantsoffered to secure the amount by furnishing a bank guarantee and thisoffer, was accepted by the revenue. 6. Mr. Thakkar however submits that our order dated 08.05.2015was not a consent order but a direction to furnish a bank guarantee interms of the statute. If that be so, unless it is pointed out that therehas been some change in the statutory provisions, then again,there isno question of varying our order dated 08.05.2015. In any case, fromthe tenor of our order dated 08.05.2015, we are satisfied that the same 6 MCA No.882/19 in WP No.178/15-04.12.19 was indeed a consent order. 7. The orders which are made by consent of the parties, cannot,ordinarily, be varied on the basis of a unilateral plea of one of theparties. Ms. Linhares has relied upon the ruling in RameshRaghunath Joshi and another vs. Mrs. Aruna Preet Mohan SinghMalik and others - 2013 (0) Supreme (Mah) 1943 in support ofthis proposition. 8. Despite grant of opportunity, the applicants, have not been ableto cite any decisions on the issue as to whether consent orders madecan be varied on the basis of unilateral plea of one of the parties. 9. Besides, we note that the only varied circumstances referred to bythe applicants are the following:- (a) The Writ Petitions No.1015/2015, 15/2016 and 16/2016which dealt with the assessment years 2009-10, 2010-11 and2011-12 have already been disposed of in favour of theapplicants;which dealt with the assessment years 2009-10, 2010-11 and2011-12 have already been disposed of in favour of theapplicants; (b) The circulars dated 29.02.2016 and 31.07.2017 issued byCBDT.CBDT. 10. Mr. Dada, the learned Senior Advocate who had appeared forthe applicants pointed out that since almost three writ petitions whichwere in fact clubbed along with the pending Writ Petition 7 MCA No.882/19 in WP No.178/15-04.12.19 No.233/2015 have already been decided in favour of the applicants,this, should be regarded as a substantial variation of circumstance. Mr.Dada further submitted that the CBDT circulars referred to above,inter alia, provide that when the assessee deposits about 20% of thedemanded amount, the appellate authority, should either grant a stayor the assessing authority should refrain from enforcing the demand. 11. When the connected writ petitions were disposed of, this Court,specifically, de-tagged Writ Petition No.233/2015 which pertains tothe assessment year 2008-09 by observing that certain additional issuesarise in the said petition. The subject matter of demand in WritPetition No.233/2015 is `117.15 crores according to the applicantsand the same is `120 crores or thereabouts according to the revenue.The bank guarantee, which is provided by the applicants, is in anamount of approximately `105 crores or thereabouts. Accordingly, itcannot be said that the disposal of the connected writ petitions reallyconstitutes some substantial variation. 12. The circulars referred to by the applicants really apply at thestage of appeals. In Writ Petition No.178/2015, we were concernedwith the lifting of attachment consequent upon the offer of security bythe applicants. This security was offered by the applicants on theirown and this offer was accepted by the Revenue. Based upon theconsent order, the applicants were permitted to and have in fact 8 MCA No.882/19 in WP No.178/15-04.12.19 withdrawn the amount of `105.95 crores. From the tenor of our orderdated 08.05.2015, it is very apparent that the order was based uponthe consent of the parties. Now, on the basis of unilateral withdrawalof consent or rather, on the basis of unilateral plea of the parties, theorder dated 08.05.2015 cannot be varied. 13. Besides, it was pointed out by Ms. Linhares, learned counsel forthe Revenue that the bank guarantee has to continue until the disposalof Writ Petition No.233/2015. She points out that Writ PetitionNo.233/2015 is already on the Board for Final Hearing. This,according to us, is an additional reason as to why, this application forvariation need not be allowed. 8 MCA No.882/19 in WP No.178/15-04.12.19 withdrawn the amount of `105.95 crores. From the tenor of our orderdated 08.05.2015, it is very apparent that the order was based uponthe consent of the parties. Now, on the basis of unilateral withdrawalof consent or rather, on the basis of unilateral plea of the parties, theorder dated 08.05.2015 cannot be varied. 13. Besides, it was pointed out by Ms. Linhares, learned counsel forthe Revenue that the bank guarantee has to continue until the disposalof Writ Petition No.233/2015. She points out that Writ PetitionNo.233/2015 is already on the Board for Final Hearing. This,according to us, is an additional reason as to why, this application forvariation need not be allowed. 14. For the aforesaid reasons, we dismiss this MiscellaneousApplication No.882/2019. 15.There shall be no order for costs. C.V. BHADANG, J. M. S. SONAK, J. ss