Wp(C)/21301/2018 Of N.sheela v. The Assistant Commissioner Of Income Tax

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU WEDNESDAY, THE 27TH DAY OF JUNE 2018 / 6TH ASHADHA, 1940 WP(C).No. 21301 of 2018 PETITIONER(S) : N.SHEELA, MUNDAKKAL, KOLLAM. PROPRIETRIX, SWATHI EXPORTS, BY ADV.SRI.N.D.PREMACHANDRAN RESPONDENT(S): 1. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1, KOLLAM- 691 001. 2. THE JOINT COMMISSIONER OF INCOME TAX, OFFICE OF THE JOINT COMMISSIONER, KARBALA JUNCTION, KOLLAM- 691 001. BY SRI.CHRISTOPHER ABRAHAM THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 27-06-2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: APPENDIX PETITIONER(S)' EXHIBITS : EXT P1 COPY OF THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2003-04 DATED 31.03.06.EXT P2 COPY OF THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2004-05 DATED 27.12.06.EXT P3 A COPY OF THE ORDER OF THE HON'BLE SUPREME COURT.EXT P4 COPY OF THE APPLICATION SUBMITTED BY THE PETITIONER DATED 30/03/16.EXT P5 A COPY OF THE LETTER DATED 22.02.18.EXT P6 A COPY OF THE APPLICATION DATED 08.03.18.EXT P7 COPY OF THE JUDGMENT OF THIS HON'BLE COURT IN WP(C) NO.15227 OF 2016 DATED 15.04.16.EXT P8 COPY OF THE JUDGMENT IN WP(C) NO.19601 OF 2016 DATED 08.06.2016. RESPONDENT(S)' EXHIBITS:NIL //TRUE COPY// PA TO JUDGE DAMA SESHADRI NAIDU, J. =========================== W.P (C) No.21301 of 2018 =========================== Dated this the 27[th] day of June 2018 JUDGMENT The petitioner, an exporter, deals in cashew kernels. As an assessee, sheclaimed deduction of income under section 80 HHC of the Income TaxAct 1961. But the Assessing Officer assessed her income for 2003-2004 and 2004-2005 without providing for any deduction under section80 HHC of the Act. 2. The petitioner, then, challenged the retrospective amendmentof 80 HHC (3) taxation loss (Second Amendment Act 2005). Whensimilar writ petitions had been filed in many other States, the SupremeCourt consolidated all the matters and allowed the Gujarat High courtto dispose of the writ petitions. 3. The Gujarat High Court nullified the amendment. Later, thejudgment taken to Supreme Court, it refused to interfere. 4. Now, the petitioner complains that despite the highest courtnullifying the amendment, still the Assessing Officer refuses to allow the petitioner to have the advantage of deduction. So, in this writpetition, she seeks a direction to the Assistant Commissioner of Income W.P (C) No.21301 of 2018 2 Tax to allow her the statutory deduction and refund the tax collected inexcess. 5. The petitioner’s counsel submits that, rather than comply with the Supreme Court judgment, the Assessing Officer has treated thepetitioner's application as one for correction and rejected it. 6. In contrast, the Standing Counsel for the IT Department hascontended that the Assessing Officer has correctly treated thepetitioner’s application only as one for correction. He also contendsthat it is barred by limitation. 7. Heard Sri N.D.Premachandran, the learned counsel for the petitioner and Sri Christopher Abraham, the learned Standing Counselfor the respondent, besides perusing the records. 8. Indeed, once a statutory provision, original or amended, isdeclared ultra vires the Constitution, the legal fiction comes into play:the nullified provision is said to have never existed. An authority mayhave decided based on a provision later nullified. An aggrieved personmay challenge a provision or proceeding and, eventually, emergesuccessful. Then, she can approach the authority to correct hisproceedings according to the judicial verdict. As the verdict binds theauthority, it does not lie in the authority to say that the aggrieved personaims to correct a concluded finding. Such an approach is 3 impermissible. petitioner and Sri Christopher Abraham, the learned Standing Counselfor the respondent, besides perusing the records. 8. Indeed, once a statutory provision, original or amended, isdeclared ultra vires the Constitution, the legal fiction comes into play:the nullified provision is said to have never existed. An authority mayhave decided based on a provision later nullified. An aggrieved personmay challenge a provision or proceeding and, eventually, emergesuccessful. Then, she can approach the authority to correct hisproceedings according to the judicial verdict. As the verdict binds theauthority, it does not lie in the authority to say that the aggrieved personaims to correct a concluded finding. Such an approach is 3 impermissible. 9. It is the constitutional obligation of every administrativeagency to follow the precedents of the Supreme Court and consider thesuitor’s claim. It is inescapable if that authority was a party to thosejudicial proceedings. So I set aside Ext.P5. I also direct the Assistant Commissioner ofIncome Tax to consider the petitioner's Ext.P4 application, keeping inview the statutory nullification, and pass appropriate orders, afterhearing the parties on either side. The authority will conclude theproceedings, preferably, in one month. Sd/- DAMA SESHADRI NAIDU, JUDGE ACM W.P (C) No.21301 of 2018 4