Case Law Details
Director Of Income Tax Vs Western Union Financial Services Inc (Supreme Court of India)
Introduction: The Supreme Court of India has ruled on a case involving the Income Tax Department and Western Union Financial Services Inc. The court addressed the issue of dismissing tax appeals due to inordinate delays in refiling them. It also directed the Income Tax Department to pay costs to Western Union and ordered a re-adjudication of the appeals.
Analysis: The appeals before the Delhi High Court were dismissed based on the appellant’s inordinate delay in refiling them (ranging from 991 to 1117 days). The appellant, the Income Tax Department, sought condonation of the delay, but the High Court rejected the explanation and did not consider the appeals on their merits.
The appellant approached the Supreme Court, arguing that the substantial questions of law raised by the Department were not considered due to the delay, causing prejudice to the Revenue. The Supreme Court acknowledged that the delay was considerable but found that the High Court should have considered the cases on their merits and condoned the delay, especially if the substantial questions of law were significant.
As a result, the Supreme Court set aside the High Court’s orders, allowed the appeals, and restored them before the High Court. It directed the Income Tax Department to pay a cost of Rs. 50,000 to Western Union in each appeal. The payment of the cost is a prerequisite for the High Court to consider the appeals on their merits.
Conclusion: The Supreme Court’s ruling in favor of Western Union Financial Services Inc. requires the Income Tax Department to pay costs and directs a re-adjudication of the tax appeals before the High Court. The decision highlights the importance of considering cases on their merits, even in instances of delay, to ensure justice and fairness in the judicial process.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
Leave granted.
2. We have heard learned panel advocate for the appellant and learned counsel for the respondents.
3. The grievance ventilated in these appeals is regarding the dismissal of the I.T.A.No.141/2016 and Miscellaneous application(s) as well as analogous appeals filed before the Delhi High Court only on the ground of inordinate delay of 1110, 1117 and 991 days respectively in refiling the said appeals. The High Court has observed that the explanation offered for the condonation of delay sought for by the appellant herein could not be accepted, as, for a long time the appeals were lying in defect and therefore could not be listed before the Court.
4. Learned counsel for the appellant submitted that as a result, the substantial questions of law raised by the Department in the said appeals have not been considered on merits which has caused prejudice to the Revenue. He therefore submitted that the impugned orders may be set aside and the matters may be remanded to the High Court by condoning the delay in refiling the appeals, so that the High Court could consider the cases on merits.
5. Per contra, learned counsel appearing for the respondents vehemently objected to the condonation of the delay of 1110, 1117 and 991 days respectively in refiling by this Court and permitting the matters to be heard on merits. He sought to contend that unnecessarily, the previous standing counsel of the Department has been blamed for the failure in refiling the appeals whereas that was not the case at all as the defects were not removed by the appellant.
6. However, we find that the High Court has not dealt with the appeals on merits and if the substantial questions of law are of significance then the High Court, in our view, ought to have condoned the delay in refiling the appeals and considered the cases on merits. We note that initially the appeals were filed in time. However, it is also an aspect to be noted that the delay of 1110, 1117 and 991 days respectively in refiling the respective appeals is considerable. Hence, we set aside the impugned orders and allow these appeals and restore the appeals before the High Court with cost of Rs.50,000/- (Rupees fifty thousand only) to be paid by the appellant to the respondents in each of these appeals within a period of four weeks from today. It is needless to observe that unless the cost is paid to the respondent, the High Court on remand shall not take up the appeals for consideration on merits. The aforesaid, in our view, would subserve the interest of justice. Four weeks’ time is granted from the date of the release of this order for removal of the defects in the appeals restored before the High Court.
Pending application(s), if any, shall stand disposed of.
