TARU JETHMAL LALVANI Vs. SECRETARY MINISTRY OF FINANCE

JUDGEMENT

(1.) BY this petition under Art. 226 of the Constitution of India, the petitioner has challenged the legality and validity of the letter dt. 12th Sept., 1986, issued by the Ministry of Finance, Department of Revenue, Foreign Tax Division, Government of India, New Delhi.

(2.) THE petitioner had entered into two agreements dt. 3rd Nov., 1980, and 1st Sept., 1981, with the Ontario Paper Co. Ltd. of Canada for rendering services to that company in and outside India on remuneration as per the agreements. The petitioner's applications for approval of the agreements were, in the first instance, rejected by the Government, vide its letter dt. 27th March/27th April, 1982. The Government in that letter had refused to grant approval on the ground that the agreements did not create a relationship of employer and employee between the petitioner and the said company. Subsequent thereto, this Court, in the case of CBDT vs. Aditya Birla (1988) 170 ITR 136 (Bom) : TC 26R.908, held that for the purpose of approval of an agreement under s. 80RRA, it was not necessary to have the relationship of employer and employee. Thereafter, the petitioner again applied to the Government, vide application dt. 5th Aug., 1986, for approval of the aforesaid two agreements. By its impugned letter dt. 12th Sept., 1986, the Government rejected the application in the following terms:

(3.) THE impugned letter dt. 12th Sept., 1986, is, therefore, set aside with a direction to the Government to consider the petitioner's application for approval of the agreements under S. 80RRA afresh according to law and to pass a speaking order. Rule is accordingly made absolute in terms of prayer (a). No order as to costs.