TATA TIMKEN LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) THIS Letters Patent Appeal is directed against the order of a learned single judge dated March 13, 1995, passed in CWJC No. 3264 of 1992(R), by reason of which, while declining to grant relief to the writ-petitioner-appellant, the application has been disposed of by giving the petitioner-appellant liberty to produce all the materials before the assessing authority and by further directing the Assistant Commissioner of Income-tax to consider and decide the matter on merits and in accordance with law after giving the petitioner opportunity of being heard.

(2.) BEFORE appreciating the contentions advanced on behalf of the parties, the factual background of the case may be portrayed. The appellant, a limited company, moved this court under articles 226 and 227 of the Constitution for quashing the order dated July 28, 1992, passed by the Central Board of Direct Taxes, New Delhi (hereinafter referred to as "the Board"), by reason of which the Board opined that Circular Instruction No. 133, dated December 10, 1969, is not applicable to the case of the petitioner and the petitioner was not entitled to avail of the benefit thereof. Further prayer was made to restrain the Assistant Commissioner of Income-tax (hereinafter referred to as "the assessing authority") from proceeding pursuant to a notice dated September 22/24, 1992, whereby and whereunder the assessing authority called upon the petitioner to show cause why it should not be treated as an "assessee in default" under Section 192 of the Income-tax Act, 1961, and why penalty proceeding under Section 271C of the said Act should not be initiated against it.

(3.) MR. Bhattacharya, learned senior counsel appearing on behalf of the appellant, impugning the order of the learned single judge, has strenuously argued that when the Board intimated the petitioner-appellant on July 28, 1992, that its case was not covered by Instruction No. 133, dated December 10, 1969, even though the learned single judge directed the assessing authority not to be influenced by the said communications, the appellant's apprehension is that the assessing authority in deciding the assessment proceeding cannot overlook the said communication and the same will definitely prejudice the appellant-company in the assessment proceeding. Learned counsel further contended that when the Board, on the representation/letter of request of the appellant, communicated to it that on the facts and circumstances the said notification of 1969 would not be applicable to the case of the petitioner-appellant, the Board was required to give a reasonable opportunity of being heard and that having not been done, the Board has violated the principle of natural justice. Last, but not the least, learned counsel continues that the mala fide action of the authority is writ large from the fact that during the pendency of the writ application a circular has been issued on September 27, 1993, which highly prejudiced the appellant-company.