Sri Srinivas V vs. Union Of INDIA
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Cause title — parties, addresses and appearances
O R D E R
The petitioner in Writ Petition No.11190/2020 has filed this petition for the review of this Court’s order dated 14.12.2020 in such petition. The petitioner, in Writ Petition No.11190/2020, has challenged the
3 rejection of is declaration for Tax Relief under the provisions of Sabka Vikas [Legacy Dispute Resolution) Scheme, 2019 [for short, ‘the Scheme’] by the order dated 09.09.2020. This Court by the order dated 14.12.2020 has repelled the petitioner’s challenge in dismissing the petition on the ground that the petitioner would not be entitled for Tax Relief as its Tax liability, as required under Section 124(1)(d) of the Scheme, was not quantified as of 30.06.2019. 2. A brief statement of the facts leading to the Writ Petition No. 11190/2020 would be as follows. The petitioner filed belated service tax returns in Form ST-3 and also paid certain amounts after the respondents called upon the petitioner to produce records such as balance-sheet, P and L Account and other details. On 12.09.2018, the respondents registered an offence case against the petitioner in OS No. 31/2018-2019 approximating the petitioner’s liability in a sum of
4 Rs.99,00,000/-, and they also issued a final reminder on 15.11.2018 to the petitioner calling for its reply. The respondents issued notice dated 09.12.2019 to the petitioner under section 73 of the Finance Act, 1994 read with section 174 of the Central Goods and Services Tax Act, 2017 to show cause as to why a sum of Rs.6,53,93,365/- should not be taken as the taxable value for the period from April 2015 to June 2017 and an amount of Rs. 95,94,517/- should not be demanded and recovered as service tax, education cess and secondary and higher education cess payable on the tax value. There are also further demands in this notice towards ineligible credits.
The petitioner filed his declaration for Tax Relief under the Scheme on 12.12.2019. The third respondent by the order dated 09.09.2020, which is impugned in Writ Petition No. 11190/2020, rejected such declaration holding that the petitioner would be
5 ineligible for Tax Relief under the Scheme because the investigation was not complete and there was no quantification when the final reminder was issued on 15.11.2018. This Court rejected the writ petition observing that the petitioner filed its declaration for Tax relief relying upon the show cause notice dated 09.12.2019, which is much after 30.6.2019 – the date prescribed under Section 123(1)(a) of the Scheme for Tax relief thereunder.
The present review petition is filed urging the following two submissions:
1 The Petitioner’s liability was quantified as of 30.06.2019: This Court has opined that the petitioner’s liability is quantified only with the show cause notice dated 09.12.2019. However, the significance of the expression “quantification” as contemplated under the Scheme must be construed in the light of the provisions
6 of Section 73(1B) of the Finance Act, 2019 and Section 121(r) of the Scheme. When so construed, the computation in the Service Tax Returns filed in Form ST-3 much before 30.06.2019 would be "quantification" as required for the Scheme. In which event, the petitioner would be entitled for tax relief even under the “enquiry/ investigation/ audit category”.
2 The petitioner’s eligibility for Tax Relief under the Scheme in the ‘arrears category’: The Tax Relief for the “enquiry or investigation or audit” category would be under section 124(1)(d) of the Scheme, and Tax relief for the “arrears” category would be under section 124(1)(c) of the Scheme. In any event, the Petitioner, who had filed declaration in Form SVLDR-1 under the “enquiry or investigation or audit” category, would undeniably be entitled to Tax Relief under the “arrears” category in view of the provisions of Section 124(1)(c) of the Scheme and the subsequent Circular dated 12.12.2019 issued
7 by the Central Board of Indirect Taxes and Customs. The third respondent, the Designated Committee, who is bound by the aforesaid Circular dated 12.12.2019, should have considered the petitioner’s declaration in Form SVLDR-1 accordingly.
3 After the show cause notice dated 09.12.2019, the petitioner, who had filed declaration in Form SVLDR-1 under the “enquiry/ investigation/ audit” category on 12.12.2019, represented before the adjudicating authority vide its letter dated 23.12.2019 stating that the petitioner would waive the right to be heard in person and the show cause notice may be adjudicated on merits with the available documents at the earliest because the petitioner proposed to file a declaration under the Scheme for tax relief in the ‘arrears’ category. In support of the submission, reliance is placed upon the adjudicating authority’s order dated 30.12.2019. The petitioner, who had filed
8 declaration in Form SVLDR-1 under the enquiry/investigation/audit category, could not have filed another declaration under the arrears category with the adjudication pending.
4 The stipulation that the liability shall be quantified before 30.06.2019 [which is necessary for Tax Relief under the enquiry/ investigation/ audit category as per the provisions of section 124(1)(a) of the Scheme] is not contemplated for Tax Relief under the arrears category given the provisions of section 124(1)(a) of the Scheme.
Sri. V. Raghuram, learned counsel who appears along with Sri Anish Acharya who was on record for the petitioner in WP No. 11190/2020, submits that the aforesaid relevant provisions of Section 73(1B) of the Finance Act, 2019 and Section 121(r) of the Scheme were not brought to this Court’s notice by
9 mistake. If these provisions were urged, the outcome of the writ petition would have been different. If it is undeniable that the provisions relied upon by the petitioner would not only be relevant but would have brought about a different outcome, a case for review of the order dated 14.12.2020 is made out. In this regard, he relies upon the decision of the Hon’ble Supreme Court in Girdhari Lal Gupta v. DH Mehta and another1 and draws the attention of this Court to paragraph 15 which reads as under:
“The learned counsel for the respondent State urges that this is not a case for further review because it is only a case of mistaken judgment. But we are unable to agree with the submission because at the time of the arguments our attention was not drawn specifically to subsection 23-C(2) and the light throws on the interpretation of subsection (1).”
1 (1971) 3 Supreme Court Cases 189
10 Sri. V. Raghuram, continuing in the same vein, relies upon the decision of this court in Vyshali Mahila Samaj v. State of Karnataka, By Secretary to Government, Housing and Urban Development, Bangalore and others2 and submits that this Court, when it was established that statutory provisions were not considered, has allowed review of the order opining that it would vitiate the order.
Sri. V. Raghuram next contends that neither of the grounds viz., that the petitioner’s tax liability should be construed as quantified in the light of the provisions of the Finance Act, 2019 and that the petitioner’s declaration should have been considered under the arrears category, was specifically urged in the memorandum of writ petition, and in this regard there is a redoubtable misconception of facts by the learned counsel. If an apparent misconception of fact, either as 2 ILR 2004 Karnataka 2297
11 a mistake by the court or by an advocate, is redoubtably established, an error apparent on record as contemplated under Order XLVII Rule 1 of CPC would also be established; in which event there must be review.
Sri. V. Raghuram emphasizes that if in the facts and circumstances of the case, even if it could be argued that a case for review on the ground of a mistake or error apparent on the records is not established, there must be review because “sufficient reasons” for review, as contemplated under the provisions of Order XLVII Rule 1 of CPC, is undeniably established in the facts and circumstances. Sri. V. Raghuram relies upon paragraph 90 of the decision of the Hon’ble Supreme Court in BCCI v. Netaji Cricket Club3 and points out that the proposition as canvassed by him is reiterated by the Hon’ble Supreme Court in its latter decision in 3 (2005) 4 Supreme Court Cases 741
12 Perry Kansagara v. Smrithi Madan Kansagara4. He relies on paragraph 90 in BCCI v. Netaji Cricket Club which reads as under:
“Thus, a mistake on the part of the Court which would include a mistake in the nature of the undertaking may also call for a review of the order. An application for review would also be maintainable if there exists sufficient reason therefor. What would constitute sufficient reason would depend on the facts and circumstances of the case. The words “sufficient reason” in Order 47 Rule 1 of the Code are wide enough to include a misconception of fact or law by a Court or even an advocate. An application for review may be necessitated by way of invoking the doctrine actus curiae neminem gravabit”
Sri. V. Raghuram submits that the expression, “for any other sufficient reason” in Order XLVII Rule 1 of CPC is of wide amplitude and would
4 (2019) 20 Supreme Court Cases 753
13 include the ground that an order is passed under misconception of true state of circumstances. In this regard, he relies upon the decision of the Hon’ble Supreme Court in S Nagaraj v. State of Karnataka5 and submits (relying upon the decision reported in Narain Das and others v. Chiranji Lal AIR 1925 Allahabad 364) that the words, “for any other sufficient reason” in Order XLVII Rule 1 of CPC are not only very wide in themselves but were intentionally so made by the legislature because of the possibility of exceptional cases arising in which obvious injustice would be worked by strict adherence to the terms of the order as originally passed.
Sri Jeevan Neeralagi, learned Additional Government Advocate, submits that there is no error apparent on the face of the record in the order dated 14.12.2020. It is undisputed the learned counsel on 5 (1993) supplement 4 Supreme Court Cases 595
14 record for the petitioner did not even assert before this Court in the writ petition that the quantification of the liability before 30.06.2019 [for the purposes of section 124(1)(d)] must be construed in the light of the provisions of Section 73(1B) of the Finance Act, 2019 or that the petitioner would be entitled for relief under the arrears category. Even the pleadings in the writ petition are bereft of these grounds and it is therefore, indisputable that the petitioner has not established either due diligence or lack of knowledge or circumstances that precluded the petitioner from setting forth these grounds in the petition or in urging the same before this court. At this point of time, it must be observed that Sri Jeevan Neeralagi also argues that there is no merit in either of the grounds urged on behalf of the petitioner.
Sri Jeevan Neeralgi canvasses that even in the case of a misconception of fact, as in the case of an
15 error apparent on the face of the record, such misconception to constitute sufficient reason has to be self-evident, must be detected without the process of reasoning and must be despite due diligence. In this regard, he relies upon paragraph 9 of the decision of the Hon’ble Supreme Court in Parison Devi and Others v. Sumitri Devi and others6, which reads as under:
"Under Order 47 Rule 1 CPC judgement may be open to review inter alia if there is a mistake or an error apparent on the face of the record. An error which is not self-evident and has to be detected by a process of reasoning, can hardly be said to be an error apparent on the face of the record justifying the Court to exercise its power of review under Order 47 rule 1 CPC. In exercise of the juri iction under Order 47 Rule 1 CPC it is not permissible for an erroneous decision to be “reheard and corrected”. A review petition, it must be remembered has a limited
6 (1997) 8 Supreme Court Cases 715
16 purpose and cannot be allowed to be “an appeal in disguise”.
He also relies upon the decision of the Madras High Court in Shanmugam Servai v. Periyakaruppan Servai7 wherein it is held that the expression, any other sufficient reason found in Order XLVII Rule 1of CPC, must be interpreted to mean a ground at least analogous to those grounds specified in such provision. The paragraph 5 of this decision reads as follows,
"The expression, “any other sufficient cause” found in Order 47 Rule 1 must be interpreted to mean a reason sufficient or ground at least analogous to those specified immediately before. It must be eju em generis to the reasons previously stated. There is a difference between the words, ‘eju em generis’ and ‘at least analogous’. The Latin phrase eju em generis according to the Chambers Twentieth Century Dictionary
7 AIR 1996 Madras 411
17 means, ‘of the same kind’. The word analogous means bearing same; corresponds with or resembles to, similar in certain circumstances or in relation. So, the phrase ‘eju em generis’ is more restricted than the word, ‘analogous’. The popular meaning of the word ‘eju em generis’ is, it is a rule of legal construction that general words following enumeration of particulars are to have their generality limited by reference to the preceding particular and to be construed as including only other articles of the like nature and quality."
Sri Jeevan Neeralagi relying upon these two propositions further argues that if the petitioner could rely upon the expression, “any other sufficient reason” in Order XLVII Rule 1 of CPC, the petitioner, to succeed in the review petition, must necessarily establish due diligence or lack of knowledge or difficulties in urging such ground earlier. The petitioner, who has not pleaded either due diligence or circumstances beyond
18 his control in taking up the two contentions now urged, cannot succeed in the review petition on the ground of "sufficient reason" asserting that there is a misconception of fact by the learned counsel on record in presenting the petitioner’s case in the writ petition.
In the light of the rival submissions, the question for consideration is: Whether this Court, in exercise of the juri iction under section 114 and Order XLVII Rule 1 of CPC, must review the order dated 14.12.2020 in WP No.11190/2020 on the ground that the learned counsel for the petitioner in not arguing the grounds (now urged) has made a mistake apparent on record in misconstruing the facts, or such circumstances would constitute sufficient reasons for review..
It would be appropriate to record that it is settled that a review under Section 114 and Order XLVII
19 Rule 1 of CPC, subject to certain restrictions reiterated, could only be when there is: a. discovery of new and important matters or evidence which after the exercise of due diligence was not within the knowledge of the applicant; b. such important matter or evidence could not be produced by the applicant at the time when the decree was passed or order made; and c. on account of some mistake or error apparent on the face of record or any other sufficient reason.
As regards the review of an order under Article 226 of the Constitution of India, it would be useful to refer to the decision of the Hon’ble Supreme Court in Aribam Tuleshwar Sharma v. Aribam Pishak Sharma8 wherein it is held: "It is true as observed by this Court in Shivdeo Singh v. State of Punjab (AIR 1963 SC1908)
8 AIR 1979 SC 1047
20 there is nothing in Article 226 of the Constitution to preclude a High Court from exercising the power of review which is inherent in every Court of plenary juri iction to prevent miscarriage of justice or to correct grave and palpable errors committed by it. But, there are definitive limits to the exercise of the power of review. The power of review may be exercised on the discovery of new and important matter of evidence which, after the exercise of due diligence was not within the knowledge of the person seeking the review or could not be produced by him at the time when the order was made, it may be exercised where some mistake or error apparent on the face of the record is found; it may also be exercised on any analogous ground."
This decision, which is reiterated time and again, define the expanse and limitation of the review juri iction.
The pith of the petitioner’s case for review of the order dated 14.02.2020 in W.P. No. 11190/2020 is
21 that its learned counsel, because of a misconception of fact, did not draw the attention of this Court to the provisions of Section 73(1B) of the Finance Act, 2019 or Section 121(r) of the Scheme or the filing of the returns in Form ST – 3. These provisions substantiate the petitioner’s case that it’s liability was ‘quantified’ for the purposes of Tax Relief under Section 124(c) of the Scheme. Even otherwise, the learned counsel, again because of a misconception of fact, did not urge the petitioner’s case that it would be entitled for Tax Relief under the arrears category as envisaged under Section 124 (1)(c) of the Scheme.
It must be observed that as regards the second ground, the learned counsel for the petitioner, while emphasizing that this ground is a reiteration of the statement before the adjudication Authority, relies upon the statement recorded in the order dated
22 30.12.2019 [Annexure – F of the writ petition] which reads as under:
"Though the assessee was required to file their reply to the show cause notice within 30 days of the receipt of the notice, they vide their letter dated 23.12.2019 stated that they don’t want to be heard in person and the show cause notice may be adjudicated on merits with the available documents at the earliest, as they want to file an application under SLVDRS, 2019 under ‘Arrears Category for settlement of the case. Further, in the above said letter, they declared that they will not file any appeal against the show cause notice and resultant adjudication."
It is urged that if the afore provisions and circumstances were brought to the notice of this Court, the outcome would be different, and thus material statutory provisions and circumstances were not urged for consideration. This failure is a mistake resulting
23 from a misconception of the material facts of the case by the learned counsel. If the Court’s attention is not drawn by a learned counsel to a material statutory provision which would have a material bearing on the decision, sufficient reason for review is established. In support of this proposition, reliance is placed upon the decision of the Hon’ble Supreme Court Girdhari Lal Gupta v. DH Mehta and another supra.
The Hon’ble Supreme Court has reiterated the proposition underlined in Girdhari Lal supra in Lily Thomas v. Union of India9 by reference to its subsequent decision in Northern India Caterers (India) Ltd. v. Lt. Governor10 wherein it is held thus:
"It is well settled that a party is not entitled to seek a review of a judgment delivered by this Court merely for the purpose of a rehearing
9 (2000) 6 Supreme Court Cases 224 10 (1980) 2 Supreme Court Cases 167
24 and a fresh decision of the case. The normal principle is that a judgment pronounced by the Court is final, and departure from that principle is justified only when circumstances of a substantial and compelling character make it necessary to do so: Sajjan Singh v. State of Rajasthan. For instance, if the attention of the Court is not drawn to a material statutory provision during the original hearing, the Court will review its judgement: G.L Gupta v. D.N. Mehta." (The underlining is by this Court)
If Court’s attention is not drawn to material statutory provisions, there could be review. Further, the Hon’ble Supreme Court in Moran Mar Basselios Catholicos v The Most Rev. Mar Poulose11 has declared that: "It must be observed that under the provisions in the Travancore Code of Civil Procedure which is similar in terms to Order XLVII, Rule I of our Code of Civil Procedure, 1908, the Court of review has only a limited juri iction
11 1954 AIR SC 526
25 circumscribed by the definitive limits fixed by the language used therein. It may allow a review on three specified, grounds, namely (i) discovery of new and important matter or evidence which, after the exercise of due diligence, was not within the applicant's knowledge or could not be produced by him at the time when the decree was. passed, (ii) mistake or error apparent on the face of the record and (iii) for any other sufficient reason. It has been held by the Judicial Committee that the words "any other sufficient reason" must mean "a reason sufficient on grounds, at least analogous to those specified in the rule."
The Hon’ble Supreme Court in BCCI v. Netaji Cricket Club supra after referring to the aforesaid decision has held that an application for review could also be entertained if there exists sufficient reason therefor, and what would constitute sufficient reason would depend on the facts and circumstances of the case. It is also declared that the words “sufficient reason” in Order
26 XLVII Rule 1 of CPC are wide enough to include a misconception of fact or law by a Court or even an advocate.
It follow from the afore principles that if the material provisions of a statute are not drawn to the Court’s attention, there would be sufficient reason for review as mentioned in Order XLVII Rule 1 of CPC,. Further, while the grounds urged as sufficient reasons for review must be analogous to the grounds specifically mentioned therein, the Courts must examine whether the grounds urged could be called analogous in the facts and circumstances of the case bearing in mind the restrictions contemplated therein i.e., due diligence and reasons beyond control are established. As such, an applicant to succeed on the ground of ‘sufficient reason’ must establish reasons analgous to a mistake or error apparent on the record as also due diligence and best efforts and satisfy other conditions required under order
27 XLVII Rule 1 of CPC. It is recognized that the difficulty is not in stating the proposition, but in applying the same.
The petitioner’s intention to claim the benefit of Tax Relief under the Arrears Category, even before the last date for making a declaration under the scheme, is established by the specific stand taken before the adjudicating authority. This statement is part of Annexure – F to the writ petition, but the significance of this argument is not put to test by canvassing the same. The material was available on record is not articulated as a ground for review even in the pleadings. It is argued that the learned counsel made a mistake in not putting out such ground for consideration, and because of such mistake the learned counsel also did not argue the significance of the provisions of the Finance Act, 2019 and Scheme on the question of quantification of the petitioner’s liability upon filing of belated Form ST-3
28 Return for the purposes of the Scheme.
It is very obvious that the writ petition is dismissed without considering the material provisions of the statute and the Scheme despite the material being on record. Perhaps the provisions of the statute and the Scheme, now pressed into service could make a material difference to the outcome of the writ petition. It is said perhaps because the merits of the contentions are not presently examined except for the purposes of ascertaining whether sufficient reasons for review are established. It is undeniable that the attention of the Court is not drawn to material statutory provisions and the material circumstances. Thus, obvious sufficient reasons are established for review as envisaged under Order XLVII Rule 1 of CPC without calling for much probing. Therefore, this Court, answering the question for consideration in favour of the petitioner, opines that the order dated 14.12.2020 in WP No. 11190/2020
29 must be reviewed. Hence, the following: ORDER
The review petition is allowed and the order dated 14.12.2020 in WP No.11190/2020 is recalled, and the writ petition is restored on board for reconsideration. The Office is directed to list the writ petition before the roster Bench on 01.10.2021. JUDGE
nv*
Reproduced from the public record of the Karnataka High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.