IN THE HIGH COURT OF DELHI, the C.M. No. 1180 of 2008 in ITR 23 of 1989 was decided on 23.10.2009 in re: COMMR. OF INCOME TAX vs MMTC OF INDIA, with the following observations: -
QUOTE: We are of the view that the application is without merit, for more than one reason. First, the right to file a reference is conferrd by the statute, the judgement of the Supreme Court does not seek to take away this right. A careful analysis of OIL & NATURAL GAS COMMISSION vs COLLECTOR OF CENTRAL EXCISE [1994-70-ELT-45 = 2004-6-SCC-437] and those which preceded and followed it, would show that they injunct the prosecution of an action where two entities of the State are involved. If a reference is filed without , an approval it cannot be held, as not being maintainable. In somewhat similar circumstances where an issue arose with respect to interpretation of Section 171 of the Indian Cpmpanies Act, 1913 as regards as to what, would be the position in respect of a suit or proceeding which is instituted by an official liquidator without the leave of the court, as mandated by the said provision. The Supreme Court, held that, a suit or a proceeding instituted without the leave of the court may be ineffectiveuntil leave is obtained, but once leave is obtained the proceedings “will be deemed instituted on the date granting leave.” [See: BANSIDHAR SHANKARLAL vs MOHD. IBRAHIM -- 1971-41-Com. Cases-21-S.C.]. Second, in view of the fact that it is not disputed that the judgement of a Division Bench of this Court, in CIT vs NATIONAL AGRICULTURAL CO-OPERATIVE MARKETING FEDERATION F INDIA LTD. [1999-236-ITR 766 ] covered the issue raised in the reference, the Committee on Disputes could have either prevailed upon the assessee to comply, or in the alternative, give permission to the department, to file a reference. There was no third alternative available with the Committee on Disputes. Third, we are of the view that the reference to the Committee on Disputes is mandated only if a dispute exists. In the absence of such a circumstance, there was no occassion to approach the Committee on Disputes for approval; as the issue raised was not RES INTEGRA. Lastly, the State and/or its instrumentalities do not frittere away valuable funds, and clog the courts with disputes which perhaps can be resolved inter-departmentally. In the instant situation, where the court has already provided the answer, to the issues raised in the reference, an approval for filing the reference was not a pre-requisite – since all that the reference sought to achieve was to bring the mpugned judgement in line with an earlier decision of this Court. If we are to take a strict view of the matter, the institution of the instant review application ought to have had the approval of the Committee on Disputes. Which, it does not have. UNQUOTE
[for full text of the judgement, please visit http://www.taxesinindia.com and click on the citation taxind_2009_hc_del_cm_11880]
[Editor's note: This Delhi High Court order becomes binding on both the Revenue authorities and the Public Sector Unit assessees as also the High Powered Committee on Disputes which is required to grant necessary clerance/ reject the C.O.D. application, to incorporate / to insist incorporation , in each COD application the facts regarding the availability or otherwise of any Court orders directly applicable to the matters covered by the respective COD application, so that the HPC may straightaway give the clearance or direct the COD applicant to re-confirm as to whether the subject matter of the dispute is or is not covered by any court orders. In this process, the HPC can grant clearance in covered cases, without much time taken before the HPC , for arguments on either side.]
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