AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2005 (11) TMI 31
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....ourt order, dated September 11, 1991, the Cabinet Secretary has taken appropriate initiative and has reported to the court that the dispute between the Government Department and the public sector undertaking of the Union of India has been settled. In his report submitted to the court, the Cabinet Secretary has stated: "I would also like to state that the Government respects the views expressed by this honourable court and has accepted them that public undertakings of the Central Government and the Union of India should not fight their litigation in court by spending money on fees on counsel, court fees, procedural expenses and wasting public time. It is in this context that the Cabinet Secretariat has issued instructions from time to time to all Departments of the Government of India as well as to public undertakings of the Central Government to the effect that all disputes, regardless of the type, should be resolved amicably by mutual consultation or through the good offices of empowered agencies of the Government or through arbitration and recourse to litigation should be eliminated." The Supreme Court having taken the report of the Cabinet Secretary on record further directed ....
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.... of excise duty. The dispute itself had arisen between one of the Departments of the Central Government and a public sector undertaking of the Central Government. In Collector of Central Excise v. Jeesop and Co. Ltd. [1999] 9 SCC 181, the Supreme Court did not entertain the appeal preferred by the Collector of Central Excise on the ground, the litigation between the Central Government and public sector undertakings is not to be resorted to without the matter being examined by a "High-Powered Committee" of Secretaries and with its clearance. The court observed, "the course indicated in the orders passed by the Supreme Court in Oil and Natural Gas Commission Cases has to be adopted by the Revenue." The Supreme Court declined to entertain the appeal and the appeal was accordingly disposed of. In Canara Bank v. National Thermal Power Corporation [2001] 1 SCC 43; [2001] 104 Comp Cas 97, the Supreme Court having referred to the orders passed in Oil and Natural Gas Commission cases, made it clear that (page 103 "What the court has directed in ONGC's case [1995] Supp 4 SCC 541 is that frivolous litigation between Government Departments and public sector undertakings of the Union of India....
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....or the Union of India will fight a litigation in a court of law. It is neither appropriate nor permissible for two departments of a State or the Union of India to fight litigation in a court of law: "Such a course cannot but be detrimental to the public interest as it also entails avoidable wastage of public money and time. Various Departments of the Government are its limbs; therefore, they must act in co-ordination and not in confrontation." The Supreme Court having noticed that in cases of dispute between public sector undertakings and the Union of India, the court in Oil and Natural Gas Commission cases directed the Central Government to set up a Committee consisting of representatives to monitor disputes between Ministry and Ministry of the Government of India, Ministry and public sector undertakings in between themselves, to ensure that no litigation comes to court or to a Tribunal without the matter having been-first examined by the Committee and its clearance for litigation and further having found that no such similar committee or mechanism was available to resolve the controversy arising between various departments of the State or the State and any of its undertakings obs....
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....s of the Central Government on the other. Nor is there any mechanism or forum created and constituted for resolution of disputes between State Government public sector undertakings and Central Government public sector undertakings. The Rajasthan High Court in State of Rajasthan v. ITAT [2003] 259 ITR 686 and the Delhi High Court in CIT v. Delhi Tourism and Transportation Development Corporation Ltd. [2005] 274 ITR 35, obviously, did not properly appreciate the ratio laid down by the Supreme Court in Oil and Natural Gas Commission cases. We are not inclined to agree with the view taken by the Rajasthan and the Delhi High Courts in the said decisions. In this writ petition, the petitioner is a State Government undertaking, which came into existence with effect from February 1, 1999, after the restructure of the erstwhile Andhra Pradesh State Electricity Board. The dispute between the petitioner and the Income-tax Department relates to the applicability of the provisions of section 195 of the Income-tax Act, 1961, about which we are not concerned for the present in this writ petition. The first respondent has determined the tax payable by the petitioner by grossing up all the amount....