1990 (4) TMI 17 - HC - Income Tax

Jurisdiction Barred in Tax Acquisition Cases: Civil Court's Role Limited

Madan Mohan Samantray Versus Union Of India And Others (and Other Writ Petitions)

The High Court upheld the Subordinate Judge's decision that the civil court's jurisdiction was impliedly barred in matters concerning acquisition ... Assessment, Writ Issues Involved:1. Maintainability of the suit.2. Jurisdiction of the civil court to interfere with orders under Chapter XXA of the Income-tax Act.3. Validity of the sale deed and the alleged sham transaction.4. Interpretation of Section 293 of the Income-tax Act and its applicability to acquisition proceedings under Chapter XXA.5. Adequacy of remedies provided under Chapter XXA of the Income-tax Act.Detailed Analysis:1. Maintainability of the Suit:The plaintiff alleged that the sale deed executed in favor of defendant No. 3 was a sham and never intended to be acted upon. The Subordinate Judge dismissed the suit on the ground that it was not maintainable, holding that the jurisdiction of the civil court was impliedly barred in respect of acquisition proceedings under Chapter XXA of the Income-tax Act.2. Jurisdiction of the Civil Court:The Subordinate Judge concluded that the civil court lacked jurisdiction to interfere with acquisition proceedings under Chapter XXA of the Income-tax Act. Although Section 293 of the Income-tax Act did not expressly bar the jurisdiction of the civil court, the court held that the jurisdiction was impliedly barred. The essential relief sought by the plaintiff was beyond the scope of the civil court's jurisdiction.3. Validity of the Sale Deed:The plaintiff contended that the sale deed in favor of defendant No. 3 was a sham and that no actual transfer of ownership had occurred. Defendant No. 2 argued that the sale deed was genuine and had been acted upon, as evidenced by the document being produced by defendant No. 3's representative. The court found that the question of whether the transfer was valid or sham was within the jurisdiction of the special tribunal under Chapter XXA and not the civil court.4. Interpretation of Section 293:Section 293 of the Income-tax Act, as it stood prior to its amendment by the Finance Act of 1988, did not specifically bar the jurisdiction of the civil court in acquisition proceedings under Chapter XXA. The plaintiff argued that the civil court retained jurisdiction to examine whether the collateral fact for conferring jurisdiction on the special tribunal existed. However, the court held that despite the absence of an express bar, the jurisdiction of the civil court was impliedly barred.5. Adequacy of Remedies Under Chapter XXA:The court examined the provisions of Chapter XXA, including Sections 269C, 269D, 269E, 269F, and 269G, and concluded that the remedies normally associated with actions in civil courts were adequately provided for within the statute itself. The plaintiff had already pursued an appeal before the Appellate Tribunal and did not invoke the jurisdiction of the High Court under Section 269H. Therefore, the court held that the jurisdiction of the civil court was impliedly barred, and the plaintiff could not seek relief through a civil suit.Conclusion:The High Court dismissed the appeal, upholding the Subordinate Judge's decision that the civil court's jurisdiction was impliedly barred in matters concerning acquisition proceedings under Chapter XXA of the Income-tax Act. The plaintiff's suit was not maintainable, and the remedies provided within the Income-tax Act were deemed adequate. The appeal was dismissed without any order as to costs.