Can the order which has attained finality be challenged later relying on a decision of any HC or SC?

Nischal Agarwal

Can the order which has attained finality be challenged later relying on a decision of any High Court or Supreme Court?

Reliance in this regard can be placed on the decision of Hon’ble Delhi High Court in case of CIT v Kultar Exports [TS-315-HC-2014(DEL)] pronounced on 23-05-2014 wherein the assessee has claimed deduction for the AY 2001-04 under Section 80HHC which provides deduction to the exporters. The law was retrospectively amended vide Finance Act, 2005 which called for reassessment under Section 148. The assessee did not challenge the order of the AO and the same has attained finality.

Hon’ble Gujarat High Court in case of Avani Exports v CIT [2012] held that retrospective nature of the said amendment was unconstitutional and amendment would apply prospectively. The appeal was made before the CIT which was dismissed in limine on the ground of delay of 5-6 years. However, the ITAT answered in favour of the assessee. The Revenue challenged the decision before the Hon’ble Delhi High Court. Hence, the question of law that arises is that can a final order be challenged later in view of any judgement at a later date.

The High Court relied on the decision of Hon’ble Supreme Court in case of Tilokchand Motichand & Ors. vs H.B. Munshi & Anr wherein it was held that:

“Everybody is presumed to know the law. It was his duty to have brought the matter before this Court for consideration. In any event, having set the machinery of law in motion he cannot abandon it to resume it after a number of years, because another person more adventurous than he in his turn got the statute declared unconstitutional, and got a favourable decision.”

Reliance was also placed by the Court in case of Mafatlal Industries Ltd. v. Union of India, (1997) wherein it has been held that

“An assessee must succeed or fail in his own proceedings and the finality of the proceedings in his own case cannot be ignored and refund ordered in his favour just because in another assessee’s case a similar point is decided in favour of the manufacturer/assesses.”

In view of the afore-said position of law, Hon’ble High Court answered in favour of the revenue and against the assessee.