M/S Shivnath Rai Harnarain (INDIA) LTD vs. Anup Wadhawan, Secretary & Ors
Held
The Court held that the contempt petition was not maintainable. It found no prima facie wilful disobedience of the order dated 24.09.2018. The Court reasoned that while the previous order noted the petitioner's reliance on the DGFT v. Kanak Export judgment and the respondents' statement about reconstructing the file, it did not preclude the respondents from considering the petitioner's case on its merits. The Court stated that adjudicating whether the ratio of the Supreme Court judgment was strictly complied with, or whether the petitioner had dues for the financial years 2004-05 and 2005-06, would involve an inquiry into facts, which is beyond the scope of contempt proceedings. The Court dropped the contempt proceedings and granted the petitioner liberty to challenge the rejection letter dated 05.09.2019 or any relied-upon notification in appropriate proceedings before the appropriate forum.
Facts
The petitioner, M/s. Shivnath Rai Harnarain (India) Ltd., filed a contempt petition alleging violation of a previous High Court order dated 24.09.2018. This order had directed the respondents to decide the petitioner's application for benefits under the Target Plus Scheme, filed in 2006, expeditiously, preferably within three months. The petitioner argued their application should be decided in terms of the Supreme Court's judgment in DGFT v. Kanak Export. The respondents subsequently issued a rejection letter dated 05.09.2019, citing pending dues of Rs. 65.34 Crore from the Income Tax Department and penalties imposed under the Customs Act, 1962, by the DRI. The petitioner contended this rejection order was not in the spirit of the previous court order.
Key Issues
1. Whether the rejection letter dated 05.09.2019, issued by the respondents, constitutes a wilful disobedience of the High Court's order dated 24.09.2018, thereby violating the principles laid down in DGFT v. Kanak Export (2016) 2 SCC 226? (Question of law and mixed fact and law, concerning compliance with a previous court order and statutory provisions related to the Target Plus Scheme). Petitioner's arguments: The rejection order is not in the spirit of the previous court order, which was disposed of based on statements made by parties and the Supreme Court's ratio in DGFT v. Kanak Export. The respondents have not strictly complied with the ratio of the Supreme Court judgment. The petitioner claims no dues were payable for the financial years 2004-05 and 2005-06. Respondents' arguments: The respondents did not explicitly argue their case in the contempt proceedings but presented the rejection letter which detailed the reasons for rejecting the petitioner's claim, including significant pending dues and penalties from other government departments.
Sections Cited
Section 226(3) of the Income Tax Act, 1961, Section 114A of the Customs Act, 1962, Section 114AA of the Customs Act, 1962
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
O R D E R % 11.10.2019 The instant petition came to be filed alleging violation of the order dated 24.09.2018 passed by the ld. Single Judge in W.P.(C) 3633/2018. The relevant portion of the said order is, as under:
By a letter dated 26.12.2006, the petitioner has filed an application before the Office of Zonal Director General of Foreign Trade seeking benefits under the Target Plus Scheme. Essentially, the petitioner’s grievance is that the said application has not been decided as yet although eleven years have since passed. The learned counsel appearing for the petitioner further states that the issues involved in the application were also considered by the Supreme Court in Director General of Foreign Trade
The judgment continues below.
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