Bombay High Court
Where the Tribunal did not pass an order on the appeal despite considerable delay and instead fixed the matter repeatedly for ‘clarifications’ and thereafter closed the matter for orders on the basis of written submissions and without hearing the assessee, HELD the procedure followed by the Tribunal was not in compliance with the principles of natural justice.
Yet to report
AGK IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
INCOME TAX APPEAL NO.527 OF 2008
The Commissioner of Income-tax-I ..Appellant.
M/s.Raval Tiles & Marble P.Ltd. ..Respondent.
INCOME TAX APPEAL NO.528 OF 2007
M/s.Vijayjyot Seats Limited ..Appellant.
Commissioner of Income-tax, City IX ..Respondent.
WRIT PETITION NO.2024 OF 2008
WRIT PETITION NO.2025 OF 2008
M/s.Vijayjyot Seats Limited ..Appellant.
Union of India & Others ..Respondents
Mr.J.D. Mistry i/by Mr.B.V. Jhaveri for the
Petitioner & for respondent in appeals.
Mr.P.A. Vyas with Mr.J.S. Saluja for the
respondents & for appellant in appeals.
CORAM : D.K. DESHMUKH &
J.P. DEVADHAR, JJ.
DATED : 8TH OCTOBER, 2008.
1. Both the appeals admit. Taken up for
final hearing by consent of the parties. Rule
issued in both the writ petitions, made returnable
forthwith. By consent of both the parties, taken
up for final hearing. Heard learned counsel for
both the sides.
2. At the request of the learned counsel for
the petitioner, Respondent No.2 is permitted to be
deleted in both the writ petitions.
3. In view of the order that we propose to
pass, following facts are relevant; the revenue
had filed two appeals before the Income Tax
Appellate Tribunal being Income Tax Appeal
Nos.3158/Mum/2000 & 5143/Mum/2000 challenging the
orders passed by the Commissioner in Appeal in
favour of the petitioner / assessee in relation to
the assessment years 1996-97 and 1997-98. These
appeals have been finally disposed of by the
tribunal by its order dated 12th September, 2006.
Both the appeals have been allowed. Against this
order, the aforementioned two appeals have been
filed. Both the appeals were disposed of by common
order and, therefore, against common order, the
aforementioned two appeals have been filed in this
Court. According to the petitioner / assessee the
order was passed by the tribunal without granting
an opportunity of being heard to the petitioner in
accordance with law. Therefore, two miscellaneous
application were filed being M.A. Nos.115 &
116/Mum/2007 for recalling the order on the ground
that the petitioner was not heard in accordance
with law. Both the applications were disposed of
by the tribunal by order dated 31-3-2008. The
tribunal rejected both the applications. Against
said order passed in both the applications, two
aforementioned writ petitions has been filed in
4. We have heard learned counsel for both
the parties. The common question that arises in
both the appeals and the writ petitions for
consideration is, "is the petitioner right in
contending that the petitioner was not heard in
accordance with law and that the tribunal has not
followed proper procedure in accordance with law
before disposing of the appeals ?" Certified copy
of the order sheets maintained by the tribunal in
the appeal have been produced before us. Perusal
of those order sheet shows that on 5-9-2005 both
the parties were heard and the matter was closed
for order. It appears that thereafter on 3-2-2006,
the order sheet was reopened and following order
was passed; "3-2-06 - certain clarifications are
needed. May be fixed for further hearing on
6-3-2006". From the order sheet dated 6-3-2006 it
appears that the matter was adjourned. Same thing
happened on 21-3-2006, 20-4-2006, 10-6-2006. On
10-6-2006, the matter was adjourned to 25-7-2006 at
2.30 and the matter was treated as part-heard. The
order sheet dated 25-7-2006 reads as under :
"25-7-2006 - Hearing is adjourned to
28-7-2006 by the order of the Bench.
Both parties informed (partheard at 2.30
p.m.) (a/w ITA 3158/M/06) Assessee to
file a short note".
Perusal of the next order sheet dated 28-7-2006
shows that there is a stamp put, which claims that
the parties were heard on that date and written
submissions were filed by Shri S.D. Bapat. One
Mr.Mayur A. Shah who was representative of the
petitioner before the tribunal has filed an
affidavit claiming that the written submissions
that are shows to have been filed in the order
sheet dated 28-7-2006 were actually filed a day
earlier i.e. on 27-7-2006 and that no hearing
actually took place on 28-7-2006. He has further
stated that though the order sheet shows that the
written submissions were filed by Mr.Bapat, on that
date Mr.Bapat was not present. The written
submissions were actually filed on 27-7-2006 and
the matter was to be heard on 28-7-2006, but he was
not their on 28-7-2006 and in his place Mr.Shah was
to appear before the tribunal. It is clear from
the affidavit filed by Mr.Shah and Mr.Bapat that on
28-7-2006, the petitioners were not heard, though
in the order passed on the miscellaneous
application, the tribunal claims that on 28-7-2006
the matter was heard by them.
5. Apart from this factual controversy, we
find from the order sheet that the procedure that
has been followed by the tribunal cannot be said to
be a procedure in compliance with the principles of
natural justice. In our opinion, if the matter was
heard finally on 5-9-2005 the tribunal should have
decided the matter within a reasonable time. In
any case, if they were not in a position to pass
the order within a reasonable period, they should
have fixed the matter for rehearing and not only
for calling for clarification on certain points.
It appears from the order-sheet that the matter was
shown as part-heard and was actually fixed for
hearing only on 28-7-2006 because on the date
before that the matter was not heard and the same
was adjourned for hearing. In our opinion,
therefore, the tribunal was not justified in
closing the matter for orders on 28-7-2006 merely
because written notes were filed a day earlier
without granting an opportunity of oral hearing to
the parties. In our opinion, therefore, the
interest of justice would be served by passing the
following order :
6. The order dated 12-9-2006 passed by the
tribunal in the two appeals and the order dated
31-3-2008 passed in the two miscellaneous
applications are set aside. The two appeals are
remitted back to the tribunal for denovo
consideration and decision in accordance with law.
We have not expressed any opinion on merits of the
7. All the contentions available to both the
parties on merit are kept open to be agitated
before the tribunal.
8. Rule is made absolute in both the writ
petitions and both the appeals are disposed of in
terms of this order.
D.K. DESHMUKH, J.
J.P. DEVADHAR, J.