TaxTMI 
TaxTMI 
2018 (7) TMI 1484
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....353/Mds/2012 dated 06.09.2016. The first respondent has erroneously come to the conclusion that the ITAT has committed an error in respect of fixing the Transfer Prices. The learned Senior Counsel is of an opinion that the order impugned is an error apparent on record in view of the fact that the findings arrived by the ITAT ,after adjudication, in its order has been declared as erroneous by the respondents for which the respondent has no jurisdiction or authority. It is contended that no show cause notice was issued in respect of the differences now raised by the first respondent in the notice for revising the royalty payment. 3.The contentions of the writ petitioner is that the issue drawing strength from the earlier decision of the Bench of the Tribunal for the preceding assessment year, wherein there was a categorical finding by the Transfer Pricing Officer(TPO) that the average rate of royalty payment in the industry was 4.7%. Further, the contention of the writ petitioner is that the average royalty payment in automotive sector from the study of 35 licenses is 4.7%, which is higher than the appellant's average rate of royalty payment of 3.60%. ....
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....ding the case to the Transfer Pricing Officer(TPO). 6.Pursuant to the order of the ITAT , the Transfer Pricing Officer(TPO) had granted several hearings to the writ petitioner and finally passed an order on 27.03.2017, which is under challenge in the present writ petition. Thus, the writ petitioner has made an attempt to maintain the present writ petition on merits of the issues i.e., how the arm's length price has to be determined. 7.This Court is of an opinion that the said issue cannot be adjudicated in a writ petition and these factual disputes are to be adjudicated by the competent authorities and by the ITAT . Bye-passing all these Appellate Forums, the writ petitioner cannot approach this Hon'ble Court under Article 226 of the Constitution of India for adjudicating these factual issues in respect of considering the arm's length price to be determined. 8.The learned counsel appearing on behalf of the respondents opposed the contentions raised on behalf of the writ petitioner by stating that the writ petition itself is not maintainable. The present writ petition has been filed, challenging the order passed by the Deputy Commissioner of Income T....
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....is required to be rectified. 7.On this issue, following our decision for the preceding year, we have already decided that the average rate of royalty payment in the industry has to be considered in the case of the assessee for determining the arm's length price and if the same is more than the rate of royalty payment made by the assessee, then no adjustment is required. Since the Ld.A.R has pointed out that in the case of the assessee the rate of Royalty payment is less than the rate prevalent in the industry we hereby direct the learned TPO to verify the same and decide the matter in the light of our above decision. To that extent, the order of the Tribunal stands corrected and modified." 10.It is urged before this Court that the ITAT has not decided the matter in respect of the factual details and the particulars involved in the case of the writ petitioner. Contrarily, the ITAT remanded the matter back for re-adjudication. When the process of re-adjudication is undertaken by the competent authority/respondents, they are duty bound to verify all the records once again and decide the matter on merits and in accordance with law. On receipt of ....
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....ings made by the ITAT in its order. 13.This Court is of an opinion that certain factual details based on the records can be re-adjudicated or verified once again when the matter was remanded back for re-consideration. Though there is a finding recorded by the ITAT during the course of presenting the case, ultimately the case was remanded to the original authority for re-consideration by the ITAT . When the case was remanded back for re-adjudication, the findings made by the ITAT cannot be taken or relied upon as it is. The very purpose of remanding the matter to the original authority by the Courts/Tribunals are to ensure that all the records and relevant factors are to be re-considered, re-adjudicated and a revised order is to be passed. When the order of the ITAT is unambiguous and when the case of the writ petitioner was remanded back for reconsideration in the hands of the original authorities, then the original authorities are bound to conduct an enquiry by verifying the original records once again and re-adjudicate the matter, re-consider the factual aspects and accordingly, pass a final order. The said exercise w....
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.... Royalty has been computed @ 5% or 8% of the above sale value and paid. But for Transfer Pricing purposes, the Petitioner has computed a higher sales value by reducing only the Excise duty from the gross sales and not reducing the other two items, viz, landed cost of imported components and cost of standard bought-out components. This has been done only to bring down the royalty ratio as seen from the chart, which is re-presented in a comparative form in the table below to enable totaling of crucial columns which has been avoided by the Petitioner: (Figures in Rs.in crores) Market Model Net Sales as per RBI guideline s Sales for royalty ratio purposes Royalty Rate Royalty Ratio* Royalty amount (1) (2) (3) (4) (5) (6) (7) Domestic Santro 2533.97 2953.85 5% of value in col.3 4.29 126.70 Accent 218.32 279.02 5% of value in col.3 3.91 10.92 Sonata 16.23 48.99 5% o....
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....the statute. When there is an error apparent in the impugned order or violation of principles of natural justice, then a writ petition can be entertained by the High Courts under Article 226 of the Constitution of India. 17.In respect of these two grounds, the respondents replied that the question of issuing show cause notice does not arise at all, in view of the fact that the case of the writ petitioner had already been adjudicated before the ITAT and it was remanded back for reconsideration and accordingly, the respondents invited the writ petitioner for personal hearings and the writ petitioner also participated in three personal hearings and submitted all their books of accounts and records. Thus, the principles of natural justice has been complied with and there is no question of issuing any further show cause notice in respect of the discrepancies now arrived by the Transfer Pricing Officer(TPO). This apart, if at all the writ petitioners are aggrieved, they are at liberty to approach the Disputes Resolution Panel and thereafter the ITAT for complete adjudication of their grievances, if any exists. 18.In respect of the ground of error apparent on....
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....ine manner, by not allowing the competent Appellate authority to exercise their powers under the provisions of the statute, then this Court is of an opinion that the power of judicial review has not exercised in a proper manner. Thus, it is necessary for this Court to elaborate the legal principle settled in respect of the separation of powers under the Constitution of India. Madras Bar Association vs. Union of India (UOI) (25.09.2014 - SC) : MANU/SC/0875/2014 If the historical background, the preamble, the entire scheme of the Constitution, relevant provisions thereof including Article 368 are kept in mind there can be no difficulty in discerning that the following can be regarded as the basic elements of the constitutional structure. (These cannot be catalogued but can only be illustrated): (1) The supremacy of the Constitution. (2) Republican and Democratic form of government and sovereignty of the country. (3) Secular and federal character of the Constitution. (4) Demarcation of power between the Legislature, the executive and the judiciary. (5) The dignity of the individual secured by the various freedoms and basic....
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....press provision for separation of powers. (ii) Independence of courts from the executive and legislature is fundamental to the rule of law and one of the basic tenets of Indian Constitution. Separation of judicial power is a significant constitutional principle under the Constitution of India. (iii) Separation of powers between three organs--legislature, executive and judiciary--is also nothing but a consequence of principles of equality enshrined in Article 14 of the Constitution of India. Accordingly, breach of separation of judicial power may amount to negation of equality Under Article 14. Stated thus, a legislation can be invalidated on the basis of breach of the separation of powers since such breach is negation of equality Under Article 14 of the Constitution. (iv) The superior judiciary (High Courts and Supreme Court) is empowered by the Constitution to declare a law made by the legislature (Parliament and State legislatures) void if it is found to have transgressed the constitutional limitations or if it infringed the rights enshrined in Part III of the Constitution. (v) The doctrine of separation of powers applies to the final ....
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....hen an effective alternative remedy is available, a writ petition cannot be maintained 1. In City and Industrial Development Corporation v. DosuAardeshirBhiwandiwala and Ors. MANU/SC/8250/2008 : (2009) 1 SCC 168, this Court had observed that: The Court while exercising its jurisdiction under Article 226 is duty-bound to consider whether: (a) adjudication of writ petition involves any complex and disputed questions of facts and whether they can be satisfactorily resolved; (b) the petition reveals all material facts; (c) the Petitioner has any alternative or effective remedy for the resolution of the dispute; (d) person invoking the jurisdiction is guilty of unexplained delay and laches; (e) ex facie barred by any laws of limitation; (f) grant of relief is against public policy or barred by any valid law; and host of other factors. 2. KanaiyalalLalchand Sachdev and Ors. vs. State of Maharashtra and Ors. (07.02.2011 - SC) : MANU/SC/0103/2011 It is well settled that ordinarily relief Under Articles 226/227 of the Constitution of India is not available if an efficacious alternative remedy is availa....
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.... Supreme Court agreed to the arguments and held the same also noted that the writ petition ought not to have been entertained and the interim order granted for the mere asking without assigning special reasons, and that too without even granting opportunity to the Appellant to contest the maintainability of the writ petition and failure to notice the subsequent developments in the interregnum. 5. State of Himachal Pradesh v. Gujarat Ambuja Cement Ltd. reported at AIR 2005 SC 3856, the Supreme Court explained the rule of 'alternate remedy' in the following terms Considering the plea regarding alternative remedy as raised by the appellant-State. Except for a period when Article 226 was amended by the Constitution (42nd Amendment) Act, 1976, the power relating to alternative remedy has been considered to be a rule of self imposed limitation. It is essentially a rule of policy, convenience and discretion and never a rule of law. Despite the existence of an alternative remedy it is within the jurisdiction of discretion of the High Court to grant relief under Article 226 of the Constitution. At the same time, it cannot be lost sight of that though the matter rel....