CIT vs. Raval Tiles (Bombay High Court)

Brief : : Where the Tribunal did not pass an order on the appeal despite considerable delay and instead fixed the matter repeatedly for ‘clarifications’ and thereafter closed the matter for orders on the basis of written submissions and without hearing the assessee, HELD the procedure followed by the Tribunal was not in compliance with the principles of natural justice.

1. Both the appeals admit. Taken up for final hearing by consent of the parties. Rule issued in both the writ petitions, made returnable forthwith. By consent of both the parties, taken up for final hearing. Heard learned counsel for both the sides.

 2. At the request of the learned counsel for the petitioner, Respondent No.2 is permitted to be deleted in both the writ petitions.

3. In view of the order that we propose to pass, following facts are relevant; the revenue had filed two appeals before the Income Tax Appellate Tribunal being Income Tax AppealNos.3158/Mum/2000 & 5143/Mum/2000 challenging the orders passed by the Commissioner in Appeal in favour of the petitioner / assessee in relation to the assessment years 1996-97 and 1997-98. These appeals have been finally disposed of by the tribunal by its order dated 12th September, 2006.Both the appeals have been allowed. Against this order, the aforementioned two appeals have been filed. Both the appeals were disposed of by common order and, therefore, against common order, the aforementioned two appeals have been filed in this Court. According to the petitioner / assessee the order was passed by the tribunal without granting an opportunity of being heard to the petitioner in accordance with law. Therefore, two miscellaneous application were filed being M.A. Nos.115 &116/Mum/2007 for recalling the order on the ground that the petitioner was not heard in accordance with law. Both the applications were disposed of by the tribunal by order dated 31-3-2008. The tribunal rejected both the applications. Against said order passed in both the applications, two aforementioned writ petitions has been filed in this Court.

4. We have heard learned counsel for both the parties. The common question that arises in both the appeals and the writ petitions for consideration is, “is the petitioner right in contending that the petitioner was not heard in accordance with law and that the tribunal has not followed proper procedure in accordance with law before disposing of the appeals?” Certified copy of the order sheets maintained by the tribunal in the appeal have been produced before us. Perusal of those order sheet shows that on 5-9-2005 both the parties were heard and the matter was closed for order. It appears that thereafter on 3-2-2006,the order sheet was reopened and following order was passed; “3-2-06 – certain clarifications are needed. May be fixed for further hearing on6-3-2006″. From the order sheet dated 6-3-2006 it appears that the matter was adjourned. Same thing happened on 21-3-2006, 20-4-2006, 10-6-2006. On 10-6-2006, the matter was adjourned to 25-7-2006 at2.30 and the matter was treated as part-heard. The order sheet dated 25-7-2006 reads as under :”25-7-2006 – Hearing is adjourned to28-7-2006 by the order of the Bench. Both parties informed (part heard at 2.30p.m.) (a/w ITA 3158/M/06) Assessee to file a short note”. Perusal of the next order sheet dated 28-7-2006shows that there is a stamp put, which claims that the parties were heard on that date and written submissions were filed by Shri S.D. Bapat. One Mr. Mayur A. Shah who was representative of the petitioner before the tribunal has filed an affidavit claiming that the written submissions that are shows to have been filed in the order sheet dated 28-7-2006 were actually filed a day earlier i.e. on 27-7-2006 and that no hearing actually took place on 28-7-2006. He has further stated that though the order sheet shows that the written submissions were filed by Mr. Bapat, on that date Mr.Bapat was not present. The written submissions were actually filed on 27-7-2006 and the matter was to be heard on 28-7-2006, but he was not their on 28-7-2006 and in his place Mr. Shah was to appear before the tribunal. It is clear from the affidavit filed by Mr. Shah and Mr. Bapat that on28-7-2006, the petitioners were not heard, though in the order passed on the miscellaneous application, the tribunal claims that on 28-7-2006the matter was heard by them.

 5. Apart from this factual controversy, we find from the order sheet that the procedure that has been followed by the tribunal cannot be said to be a procedure in compliance with the principles of natural justice. In our opinion, if the matter was heard finally on 5-9-2005 the tribunal should have decided the matter within a reasonable time. In any case, if they were not in a position to pass the order within a reasonable period, they should have fixed the matter for rehearing and not only for calling for clarification on certain points. It appears from the order-sheet that the matter was shown as part-heard and was actually fixed for hearing only on 28-7-2006 because on the date before that the matter was not heard and the same was adjourned for hearing. In our opinion, therefore, the tribunal was not justified inclosing the matter for orders on 28-7-2006 merely because written notes were filed a day earlier without granting an opportunity of oral hearing to the parties. In our opinion, therefore, the interest of justice would be served by passing the following order:

6. The order dated 12-9-2006 passed by the tribunal in the two appeals and the order dated31-3-2008 passed in the two miscellaneous applications are set aside. The two appeals are remitted back to the tribunal for denovo consideration and decision in accordance with law. We have not expressed any opinion on merits of the matter.

 7. All the contentions available to both the parties on merit are kept open to be agitated before the tribunal.

8. Rule is made absolute in both the writ petitions and both the appeals are disposed of in terms of this order.

D.K. DESHMUKH, J.J.P. DEVADHAR, J.

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