Court allows appeal after significant delay, affirms tax recovery rights, emphasizes defense rights.

The Court allowed the appeal despite a significant delay of 2633 days in re-filing, attributing the delay to the counsel. The Court permitted the appeal to proceed based on the consent of both parties' counsels. In terms of the Income Tax Department's entitlement to recover tax under a merger scheme, the Court dismissed the petitions but affirmed the Department's right to initiate recovery proceedings for due taxes. The Court emphasized the respondents' right to raise defenses in such proceedings and awarded no costs in the matter.

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Issues involved:
1. Delay of 2633 days in re-filing the appeal
2. Scheme of merger and Income Tax Department's entitlement to recover tax

Analysis:

Issue 1: Delay of 2633 days in re-filing the appeal
The Court noted a significant delay of 2633 days in re-filing the appeal. Despite finding the reasons for the delay not very convincing, the Court considered the default to be by the counsel. However, due to the consent of both counsels for the parties and to ensure disposal of the matter on merits, the Court allowed the application subject to just exceptions.

Issue 2: Scheme of merger and Income Tax Department's entitlement to recover tax
Regarding a similar scheme of merger, the High Courts had previously ruled against the Income Tax Department. The Supreme Court, in response to special leave petitions, dismissed the petitions but stated that the Income Tax Department could pursue appropriate proceedings for the recovery of any tax due from the involved parties. In the current case, the appellant requested a similar disposal of the appeal, which was agreed upon by the counsel for respondents. The Court disposed of the appeal by recording the Income Tax Department's entitlement to initiate proceedings for the recovery of statutorily due taxes. It was emphasized that if such proceedings were initiated, the respondents would have the right to raise all relevant issues and defenses of law and facts. No costs were awarded in this matter.

This comprehensive analysis covers the issues of delay in re-filing the appeal and the scheme of merger concerning the Income Tax Department's entitlement to recover tax as outlined in the judgment delivered by the High Court.

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