Case Law Details
Umesh Garg Vs Union of India And Another (Allahabad High Court)
Introduction: The Allahabad High Court recently delivered a crucial judgment in the case of Umesh Garg Vs Union of India And Another, pertaining to the Direct Tax Vivaad Se Vishwas Act. The court dismissed Umesh Garg’s plea for an out-of-court settlement, asserting that it is not a litigant’s fundamental right.
Detailed Analysis: The case revolves around an appeal filed against the order dated 24.12.2020 by the Designated Authority under the Direct Tax Vivaad Se Vishwas Act, 2020. The petitioner, facing penalties under Section 271 AAB of the Income Tax Act, 1961, sought relief under the Act for the assessment year 2013-2014.
Despite a partial allowance in the initial appeal, the petitioner failed to file a further appeal for an extended period, resulting in a delay of 1261 days. The petitioner, in its second appeal filed on 30th August 2020, sought condonation of the delay, which was granted by an order dated 23.12.2020.
The central argument of the petitioner was the denial of the right to benefit from the Act due to the delay in filing the second appeal. The petitioner contended that an amicable settlement, in line with the Union’s policy, should be allowed. However, the designated authority rejected the application, citing non-compliance with the cut-off date condition.
The court, in its analysis, emphasized that the settlement of disputes outside judicial processes is not a fundamental or inherent right but a statutory one provided by the Act. The petitioner failed to satisfy the statutory conditions, as the application for settlement was maintainable only if a litigation was pending before the cut-off date.
The court rejected the petitioner’s argument, stating that no right vested or accrued to seek settlement, as the petitioner did not file the appeal within the stipulated time or seek condonation of the delay. The judgment underscored that the Act’s conditions must be strictly adhered to, and the designated authority’s decision was upheld.
The court also addressed the petitioner’s reliance on the objects and reasons of the Act, emphasizing that these cannot override specific provisions. The petitioner’s right to appeal before the Tribunal remained intact despite the delay condonation.
Conclusion: In conclusion, the Allahabad High Court dismissed Umesh Garg’s writ petition, affirming the designated authority’s decision. The judgment reiterates that the right to an out-of-court settlement under the Direct Tax Vivaad Se Vishwas Act is not a litigant’s fundamental right but a statutory one, subject to strict compliance with statutory conditions. The article delves into the details of the case, the court’s analysis, and the implications of the judgment on future applications under the Act.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. Heard learned counsel for the petitioner and Sri Krishna Agarawal, learned counsel for the revenue.
2. Present appeal has been filed against the order dated 24.12.2020 passed by the Designated Authority under The Direct Tax Vivaad Se Vishwas, Act, 2020 (hereinafter referred to as ‘the Act’).
3. Undisputedely, for the assessment year 2013-2014 the petitioner was imposed under Section 271 AAB of the Income Tax Act, 1961. Thus Rs.1,71,371/- was raised.
4. Initially the petitioner filed an appeal against the order dated 29.09.2015. That appeal was partly allowed vide order dated 16.02.2017 and the penalty amount was reduced. However, the petitioner did not file any further appeal from the order of the appellate authority over a long period time. That appeal was filed carrying a delay of 1261 days. Thus the second appeal was filed by the appellant on 30th August, 2020. By order dated 23.12.2020 the delay in filing the second appeal was condoned. The appeal is pending before the Tribunal.
5. In such circumstances, learned counsel for the petitioner would submit, grave injustice has been caused in not allowing the petitioner to take benefit of the Act. The petitioner is not looking to litigate the matter with the revenue authorities. It seeks an amicable settlement in terms of the Act. Insofar as it is the stated policy of the Union to prefer settlement over litigation, indulgence may be granted to allow the petitioner’s application/ declaration for settlement, filed on 24.12.2020 to be entertained on merits. The designated authority has completely erred in mechanically rejecting that application/ declaration for reason of second appeal not filed before the cut off date 01.04.1919 to 31.01.2020.
6. On the other hand, learned counsel for the revenue would submit not only the petitioner did not file any appeal within limitation, he also did not file such appeal with delay within the cut off time. Had such delay condonation application being filed, the revenue authorities would have remained enabled to consider the application/ declaration on merits. In that regard reliance has been placed on an order of the Supreme Court in Yashi Constructions Vs. Union of India (UOI) (2022) 100 GSTR 275 (SC).
7. Having heard learned counsel for the parties and having perused the records, we find no good ground to offer any interference. In the first place, settlement of disputes outside courts/ judicial process is not a fundamental or inherent right of any litigant. That right was created by the statute i.e. the Act. Being a statutory right, the same may have been availed strictly in accordance with the statutory conditions and further inasmuch as it was a stipulation that the application/ declaration may be maintainable only if there was pending a litigation between the parties before the cut off date, it remained from the petitioner to satisfy that condition. Not only the petitioner did not file the appeal before the Tribunal, within time it also remained from him to file any defective proceeding seeking condonation of delay in filing such appeal before the cut off date. Therefore, no right vested or accrued to the petitioner to seek a settlement in terms of the conditions prescribed by the Act. For that reason, we find no error in the order passed by the designated authority.
8. Insofar as the further submission of learned counsel for the petitioner is concerned based on the objects and reasons of the Act, while objects and reasons may never defeat specific provisions of enactment, here we also note that the petitioner is not at loss inasmuch as his right of appeal before the Tribunal, against the order passed by the first appellate authority has been preserved upon condonation of delay of 1261 days in filing the second appeal.
The writ petition lacks merits and is dismissed.
