Hindustan Unilever Ltd. Vs DCIT (International Taxation) (Bombay High Court)
Conclusion: Once a substantive statutory remedy was provided and available to assessee, it would not be appropriate that the Court exercise its extraordinary jurisdiction under Article 226 of the Constitution and entertain this writ petition.
Held: The present petition was filed under Article 226 of the Constitution of India assailed an order passed by DCIT under section 201(1) raising a demand and interest under section 201(1A) against assessee of an amount of Rs.962,75,14,624/-. The demand in question was inter alia on the basis that assessee did not comply with the provisions of Section 195 to deduct tax at source (TDS) in relation to the acquisition/purchase of a Trade Mark registered in India, namely, of a Health Food Drink of the brand Horlicks (“India HFD IP”), by assessee from the foreign/non-resident group entities of GlaxoSmithKline Plc. who assigned such rights in favour of the assessee under an Assignment Deed. Assessee paid the foreign assignors an amount of Rs.3045.14 crores (EUR 375.6 million), which was remitted by assessee against the invoice raised by Horlicks Ltd., a British Company(HUK). The issue arose for consideration was could a court deal with every issue under writ filed under article 226 when the alternate remedy was available in statutory provision, the maximum time limit for passing an order under section 201(1) or section 201(1A), the order in case of M&M was affirmed or left open by the court, was the order of M&M wrongly interpreted by the People, could AO comment on the judgement delivered by the High Court in inappropriate manner and irresponsible language. It was held that once a substantive statutory remedy was provided and available to assessee, it would not be appropriate that the Court exercise its extraordinary jurisdiction under Article 226 of the Constitution and entertain this writ petition. With Respect to limitation of passing the order under 201, it was held that the Court in DIT Vs. M & M Limited although affirmed the decision of the tribunal when the tribunal, observed that maximum time limit for passing an order under section 201(1) or section 201(1A) would be the same as prescribed under section 158(2) that was one year from the end of the financial year for which proceedings under section 201(1) were initiated. The High Court had not conclusively and categorically held that the Tribunal was correct in laying down such limitation when the legislature itself had not prescribed any limitation. In fact, from the reading of the observations of the High Court, it appeared that such issue was in fact left open and what had been recognized was that the powers under Section 201 were required to be exercised within a reasonable time. With respect to AO’s comment on Delhi High Court Order, the court stated that the concerned officer to be extremely cautious and careful in future so as to remain within the limits of propriety, in the discharge of his quasi-judicial role, conferred under the provisions of the Income Tax Act. In the larger interest of the officers of the Revenue and with a hope that such issues did not percolate in the orders being passed by the Officers of the Revenue, this concern need to be taken up at the appropriate level of the Ministry, so that the limits of propriety, the tenor and language used by the officials in passing orders, and on understanding of the legal principles, was well inculcated in such officers, of the Revenue, by having regular training sessions.
