Time limits for s.201 proceedings on payments to non-residents: "reasonable time" applies; late action struck down.

The dominant issue was whether an order under s.201 in respect of payments to non-residents is barred by limitation by importing a "reasonable time" requirement, despite Parliament prescribing no express time limit for such cases. The SC found no merit in the revenue's challenge to the HC's view that a reasonable time limit governs initiation/completion of s.201 proceedings and that proceedings initiated beyond such reasonable time are unsustainable; consequently, the SLP was dismissed, leaving the HC's decision in favour of the assessee undisturbed.

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The Supreme Court dealt with a special leave petition (SLP) filed with an "inordinate delay of 350 days." The Court held that "no sufficient cause has been shown" for condoning this delay. Applying the settled principle that delay must be satisfactorily explained for the Court to exercise its discretionary jurisdiction under Article 136, the Court declined to condone the delay. The Court further observed that "even otherwise we do not see any merit in this special leave petition," thereby independently affirming that the SLP did not warrant interference on substantive grounds. Consequently, the SLP was dismissed "both on the ground of delay as well as on merit." All pending applications were disposed of accordingly.

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