The judgment of the court was delivered by
HEGDE J.---The writ petition filed by the appellants was
summarily dismissed by a Division Bench of the Delhi High Court. While
dismissing the writ petition the learned judges gave a speaking order. Against
that decision this appeal has been brought by certificate. After some discussion
the counsel for the appellant sought the permission of the court to withdraw the
writ petition in the peculiar circumstances of the case. This writ petition is
primarily directed against certain communications sent by the Central Board of
Direct Taxes dated the 18th March, 1970, and 25th July, 1970, respectively to
the appellants. We were informed by the counsel for both the parties that the
decisions conveyed in those communications were not made in exercise of any of
the powers conferred on the Board by any law. They were merely replies to the
communications sent by the appellants. They cannot be even considered as
directions under section 119 of the Income-tax Act, 1961, as they pertain to
decisions to be taken by concerned taxing authorities. The Board is not
competent to give directions regarding the exercise of any judicial power by its
subordinates. The opinions expressed in those communications pertain to the
exercise of judicial powers by the taxing authorities, as it is for those
authorities to determine as to the year in which the undertaking began to "
manufacture or to produce articles " within the meaning of section 80J of
the Income-tax Act, 1961. The communications sent by the Board and impugned in
the writ petition are replies sent by the Board to the letters written by the
appellant. They cannot bind the taxing authorities who have to decide the
question in issue on its own merits, uninfluenced by extraneous considerations.
The question in issue is a question of fact.
We are sure that the concerned authorities will not be
influenced either by the opinion expressed by the Board as to when the
undertaking began to " manufacture or to produce articles " or by the
observations of the High Court while dismissing the writ petition in deciding
the question of the liability to pay tax or the question of levying penalty
either on the company or its shareholder.
The appellants-petitioners' prayer to withdraw the writ
petition from which this appeal arose is allowed and the appeal is dismissed as
being withdrawn for the reasons mentioned earlier. No costs.
Petition dismissed as withdrawn
