Zydus Wellness Ltd v. Chief Commissioner Of Income Tax - Ii & 1

C/SCA/4690/2014 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION NO. 4690 of 2014 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER ================================================================ 1 Whether Reporters of Local Papers may be allowed to see the judgment ?the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ?judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any order made thereunder ?to the interpretation of the Constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ================================================================ ZYDUS WELLNESS LTD....Petitioner(s) Versus CHIEF COMMISSIONER OF INCOME TAX - II & 1....Respondent(s) ================================================================ Appearance: MR RK PATEL, ADVOCATE for the Petitioner(s) No. 1MR NITIN K MEHTA, ADVOCATE for the Respondent(s) No. 1 - 2 ================================================================ CORAM: HONOURABLE MR.JUSTICE KS JHAVERIandHONOURABLE MR.JUSTICE K.J.THAKERDate : 25/11/2014ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1.By way of this petition, the petitioner-ssessee has prayed to quash and set aside the order passed by Respondent No.1, herein, Dated : C/SCA/4690/2014 JUDGMENT 27.02.2014, and thereby to restore the matter, i.e. the application of the petitioner-assessee dated 26.07.2011 for waiver of interest under Section 234-C of the Income Tax Act, 1961 (for short, ‘the Act’), for the A.Y. 2009-10 and to grant an opportunity of hearing to the petitioner. 2.The brief facts of the case are that the petitioner is a company registered under the provisions of the Companies Act, 1956. It appears that on 26.07.2011, the petitioner made an application for waiver of interest imposed on it under Section 234C of the Act to Respondent No.1. However, there was no response to the application made by the petitioner. Hence, the petitioner sent several reminders to the respondents. On 10.07.2013, respondent No.2 asked the petitioner to submit certain details, which were duly supplied by the petitioner. Then, on 12.08.2013, respondent No.2 again asked the petitioner to submit certain details, which were again supplied by the petitioner. Pursuant thereto, the respondents passed the impugned order, rejecting the application of the petition. Hence, the present petition. 3.Mr. Patel, learned Advocate for the petitioner, submitted that the petitioner had filed the application for waiver of interest as back as on 26.07.2011 and had pursued the matter by sending reminders to the respondents from time to time, and therefore, the action of the respondents of dismissing the application of the petitioner, without affording an opportunity of hearing is unjust and arbitrary. He, further, submitted that the order passed by the respondents, which is without affording an opportunity of hearing to the petitioner, is in violation of the fundamental rights granted to the petitioner under the Constitution of India. He, therefore, prayed that the present petition be allowed. 4.On the other hand, Mr. Mehta, learned 3.Mr. Patel, learned Advocate for the petitioner, submitted that the petitioner had filed the application for waiver of interest as back as on 26.07.2011 and had pursued the matter by sending reminders to the respondents from time to time, and therefore, the action of the respondents of dismissing the application of the petitioner, without affording an opportunity of hearing is unjust and arbitrary. He, further, submitted that the order passed by the respondents, which is without affording an opportunity of hearing to the petitioner, is in violation of the fundamental rights granted to the petitioner under the Constitution of India. He, therefore, prayed that the present petition be allowed. 4.On the other hand, Mr. Mehta, learned Advocate, strongly opposed the petition and supported the order passed by the respondents and submitted that there being no merits in the matter, same be dismissed. In support of his submission, Mr. Mehta placed reliance on a decision of the Apex Court in “CARBORUNDUM UNIVERSAL LTD. VS. CENTRAL BOARD OF DIRECT TAXES, NEW DELHI”, (1989) 181 ITR 171, wherein, the Apex Court held that since the power of Board under section 220(2A) to waive interest was discretionary, the petitioner had an opportunity to represent its case in writing and the Board had taken into consideration the report of the C/SCA/4690/2014 JUDGMENT Commissioner and it was not the case of the petitionerthattheCommissioner’s recommendations were different; the petitioner was not entitled to the right of being personally heard by the Board before its petition under section 220(2A) was disposed of by the Board. 5.Heard, learned Counsel for the parties and perused the material on record. Now, coming to the facts of the present case, it clearly transpires that after the petitioner made an application for waiver of interest under Section 119(2)(a) of the Act, since, there was no response from the respondents, the petitioner sent several reminders. From the record, it also transpires that, though, the application was made by the petitioner in the year 2011, it was only in the year 2013 that respondent No.2 for the first time sent a communication to the petitioner, requesting him to supply certain details, which were duly supplied by the petitioner. It is, here, penitent to note that despite the petitioner had supplied required details, no decision on his application for waiver of interest was taken by the respondents. It appears that thereafter, again on 12.08.2013, respondent No.2 asked the petitioner to supply further details, which were again supplied by the petitioner. It is subsequent thereto that the C/SCA/4690/2014 JUDGMENT respondents passed the impugned order, rejecting the application of the petitioner. Mr. Mehta, learned Advocate for the respondents, is not in a position to show that before passing the impugned order the petitioner was given an opportunity of hearing or for that matter the material supplied by the petitioner was considered by the respondents, at the time of passing the impugned order. We are, therefore, of the opinion that decision relied on by Mr. Mehta in “CARBORUNDUM UNIVERSAL LTD.” (Supra) shall not apply to the facts of the case on hand and the opinion that the ends of justice would be met, if, the matter is remanded to respondent No.1 by quashing and setting aside the impugned order dated 27.02.2014. respondents passed the impugned order, rejecting the application of the petitioner. Mr. Mehta, learned Advocate for the respondents, is not in a position to show that before passing the impugned order the petitioner was given an opportunity of hearing or for that matter the material supplied by the petitioner was considered by the respondents, at the time of passing the impugned order. We are, therefore, of the opinion that decision relied on by Mr. Mehta in “CARBORUNDUM UNIVERSAL LTD.” (Supra) shall not apply to the facts of the case on hand and the opinion that the ends of justice would be met, if, the matter is remanded to respondent No.1 by quashing and setting aside the impugned order dated 27.02.2014. 6.In the result, this petition is PARTLY ALLOWED. The impugned order dated 27.02.2014 is QUASHED and set aside and the matter is remanded to respondent No.1, who shall consider and decide the same afresh on merits and in accordance with law, within a period of four weeks from today. Rule is made absolute to the aforesaid extent. No order as to costs. (K.S.JHAVERI, J.) (K.J.THAKER, J)