Power to review judgment where party not heard: court finds sufficient cause to review and re-hear judgment dated 24 June 2024

Court recognition that a judgment disposing of a matter without affording a party an opportunity to represent its case engages principles of natural justice; reliance on precedent establishing that an adjudicatory body may review its decision where absence of hearing adversely affects a party, and where power of review exists expressly or by necessary implication. Because the earlier judgment purportedly rested on coverage by a prior Division Bench ruling but the affected party disputed that basis and was not heard, the court found sufficient cause to review the judgment dated 24th June, 2024 and ordered reconsideration/rehearing.

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Issues: (i) Whether the review petition filed by respondent no.1 under Article 215 read with Order 47 Rule 1 CPC seeking review of the judgment dated 24th June, 2024 should be allowed on the ground that respondent no.1 was not heard and the judgment adversely affected its rights; (ii) Whether the delay of 64 days in filing the review petition should be condoned; (iii) Whether prima facie relief in W.P.(C)-8679/2024 in the form of stay of the assessment order dated 22nd May, 2024 under Section 143(3) of the Income-tax Act, 1961 is warranted till next hearing.

Issue (i): Whether the impugned judgment dated 24th June, 2024 should be reviewed on the ground that respondent no.1 was not given an opportunity to be heard and its rights were adversely affected.

Analysis: The Court examined whether the proceeding suffered a procedural illegality going to the root of the matter by proceeding to decide the writ petition without hearing respondent no.1 despite advance notice and in reliance on an earlier Division Bench judgment. The Court relied on Supreme Court precedents establishing that where a party is not given a chance to represent its case and the judgment adversely affects its interests, procedural review is permissible and rehearing is required without delving into merits.

Conclusion: The review petition is allowed on the ground of procedural illegality; the judgment dated 24th June, 2024 is recalled and the writ petition is revived.

Issue (ii): Whether the delay of 64 days in filing the review petition should be condoned.

Analysis: The Court applied the test of sufficient cause, observing that where sufficient cause is shown the length of delay is not determinative. Having accepted that respondent no.1's rights were adversely affected and that sufficient cause was shown for the delay, the Court considered the delay not so gross as to deny relief.

Conclusion: The delay of 64 days in filing the review petition is condoned.

Issue (iii): Whether interim relief in W.P.(C)-8679/2024 in the form of stay of the assessment order dated 22nd May, 2024 should be granted till the next date of hearing.

Analysis: On prima facie consideration and reliance on an earlier Division Bench judgment, the Court found that the petitioner in W.P.(C)-8679/2024 had shown a prima facie case, potential irreparable loss, and that the balance of convenience lay in its favour, thereby justifying interim stay of the assessment order under Section 143(3) of the Income-tax Act, 1961 until the next hearing.

Conclusion: An interim stay is granted of the assessment order dated 22nd May, 2024 under Section 143(3) of the Income-tax Act, 1961 until the next date of hearing.

Final Conclusion: The Court recalled the impugned judgment, revived the writ petition for rehearing, condoned the delay in filing the review petition, allowed the review petition, and granted interim stay in the connected writ petition pending further proceedings.

Ratio Decidendi: Where a judgment adversely affects a party who was not given an opportunity to be heard, the court may invoke procedural review to recall and rehear the matter; a demonstrated sufficient cause justifies condonation of delay; prima facie case, irreparable harm and balance of convenience justify interim stay of an assessment order under Section 143(3) of the Income-tax Act, 1961.

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