AI Drafter 
TaxTMI 
TaxTMI 
2004 (4) TMI 639
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....n to reopen any proceedings connected with the case which have been completed under the Act by any Income Tax authority prior to making an application under section 245-C of the Act. However, the same is required to be opened in concurrence of the assessed in passing the order thereon as it thinks fit. Section 245-I is specifically incorporated in the Chapter to make the order of settlement under sub-section (4) of Section 245D of the Act to be conclusive in regard to the matters stated therein. It further states that no matter covered by such order shall, save as otherwise provided in this Chapter, be reopened in any proceeding under this Act or under any other law for the time being in force. In view of the provisions contained in sub-section (6) of Section 245D, 245E and 245-I, it was submitted that the Settlement Commission after passing the settlement order becomes functus officio, as it has no power to reopen the same in any proceedings under the Act, namely proceeding under Section 154 of the Act. Section 245I specifically provides that it can be reopened only in the manner indicated in this Chapter. According to the counsel for the petitioners, the settlement can b....
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....st under Section 234A, 234B and 235C of the Act suffers from a mistake apparent from the record. In para 37 of the judgment, the Court observed as under: "However, even assuming that the Commission could exercise the power under Section 147, the said power has to be exercised in accordance with the provisions contained in Section 147 to 150. Here in the present case, even without going into this aspect as to whether the Settlement Commission has got the power under Section 154 of the Act to rectify its own order and if we proceed on that assumption that the Commission could exercise the power under Section 154 the said power has to be exercised in accordance with the provisions contained in Section 154 of the Act." A Constitution Bench in the case of CIT v. Anjum MH Ghaswala ( supra) has, no doubt, held that the Settlement Commission in exercise of its powers under Section 245D(4) of the Act does not have the power to reduce or waive interest statutorily payable under Section 243A, 243B or 243C. The Court pointed out that there is no specific empowerment of waiver or reduction of tax and the settlement will have to be in conformity with the Act and not contrary to or in....
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....mir Ahmad Khan reported as [1962]1SCR97 . In para 6, the Court pointed out that the scheme shows that where a person is simply seeking the opinion of the Collector as to the proper duty in regard to an instrument, he approaches him under Section 31. If it is not properly stamped and the person executing the document wants to proceed with effectuating the document or using it for the purpose of evidence, he has to make up the duty and under Section 32, the Collector will then make an endorsement and the instrument will be treated as if it was duly stamped from the very beginning. But if he does not want to proceed further than seeking the determination of the duty payable then no consequence will follow and an executed document is in the same position as in instrument which is unexecuted and unstamped and after the determination of the duty the Collector becomes functus officio. It is not open for the Collector thereafter to impound the instrument under Section 33 and to initiate consequential proceedings. The case of Collector Ahmednagar v. Rambhau Tukaram reported as AIR 1930 Bom. 392 was also placed before the Court. In that case a certificate of sale had been signed but the cert....
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....It is also required to be noted that the legislature has specifically provided Section 245D(6) and 245H to modify the order made by it on the ground that the order is void or to withdraw the benefits extended on account of non-compliance of the order of settlement under sub-Section (4) of Section 245D of the Act, or to withdraw an immunity granted under specific provision under Section 245H of the Act. Reading these provisions together it is not possible to accept the contention raised by the revenue that the Commission is empowered to rectify the order under Section 154 of the Act. Whenever there is a debatable point of fact which needs to be investigated or whenever there is an arguable question of law on which a final opinion is capable of being formed either way, a finding of fact or law recorded one way or the other, even if found to be erroneous either by a probe into the facts or on account of law having been settled subsequently would not be available for change by exercising jurisdiction for rectification of mistake under Section 154. Even a mistake of law must be a glaring one. "Sub-section (4) of Section 245D provides for passing of final orders by the Commis....
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....y the Settlement Commission, the matter was settled and came to be disposed of finally and it could be reopened in the manner provided in that Chapter itself or can be reviewed as provided in the Chapter. Having not challenged the said decision and having accepted the same, because of some decision in some other case, is it open for the Revenue to approach the Settlement Commission, inter alia, requesting that the order is required to be rectified because of apparent error of law? 3. If the order was bad, it was open for the Revenue to challenge the same in the High Court. One may not discuss the scope of res judicata and the extent of its application to the tax proceedings. As pointed out by the Apex Court in Express Newspapers Ltd.'s and Anjuman Gaswala's cases (Supra), the order of the Settlement Commission being final, subject of course to constitutional remedies, and having not challenged, in the opinion of this Court it would not be open for the Revenue to make an application under Section 154 of the Act. Despite the error of law, for a pretty long period of about four years, the decision was accepted. Having not challenged the decision and considering that the sam....
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....the executive. Unfortunately, attempts are being made to have inroads effecting independence of judiciary by establishment of various tribunals and forums, which are under direct control of the executive. Now, the persons from executive are being posted as members of the Tribunals or as their Chairpersons. The whole purpose envisaged by the Constitution of having an independent separate judiciary is frustrated by taking away functions which are to be discharged by the civil courts and assigning the same to government departments or to Tribunals which are directly under the control of the executive and to make persons working in executive departments as part of the judiciary. It is required to be avoided for giving ample protection to the citizens under the law for saving the foundation of democracy. Let there by no unison (combination) of the executive and the judiciary. 3. The petitioner, S.Srinivasan, (in CWP 7606/2003) is a practicing Advocate in the Supreme Court for the last 23 years and for the proper functioning of the institutions, has filed this petition. He has specifically stated that he has no personal interest or grievance against any of the members of the Tribunal.....
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....ct; to quash the Standing Order No. 530 (E) dated 1.6.2000 known as the Foreign Exchange Management (Removal of Difficulties) Order, 2000 (Annexure-P.7) as ultra virus the powers conferred under Section 45 of the Act; to issue a writ of quo warranto or any other appropriate writ to quash an order No. 197 dated 21.5.2003, which is in violation of the provisions of Section 25 of the Act; to quash notifications dated 21.3.2001 and 22.3.2001 (Annexures P-2 and P-3) and has also prayed for certain directions. 6. The learned counsel for the petitioner drew our attention to the reported decisions of the Apex Court in case of Shri Kumar Padma Prasad v. Union of India and others reported in (1993)IILLJ972SC ; Chander Mohan v. State of Uttar Pradesh and others reported in (1967)ILLJ412SC ; State of Maharashtra v. Labour Law Practitioners' Association and others reported in (1998)ILLJ868SC and Salwan Public School v. D.K.Dass and others decided by a Division Bench of this Court, reported in 1982 D.R.J.397. On behalf of the respondents, the decision of the Supreme Court reported in the case of Union of India and Another v. Delhi High Court Bar Association and others reported in [2002]2S....
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....t is in consonance with the provisions of Section 21(1)(b) of the Act. He invited our attention to method of recruitment indicated in Rule 3. Rule 5 refers to composition of the Appellate Tribunal, which states that the Tribunal shall have one Chairperson and Members not exceeding four. However, the first proviso states that number of either full time member or part time member shall not exceed two. The second proviso of Rule 5 states that part time member shall be appointed from amongst officers belonging to Indian Legal Service, who fulfills the qualifications prescribed under clause (b) of sub-rule (1) of Rule 2 of these Rules. According to learned counsel, proviso 1st and 2nd both are contrary to the Act. 15. The rule making authority has traveled beyond the authority under the Act while making this rule. Learned counsel for the petitioner submitted that the concept of full time and part time member together has been incorporated for the first time. The Act does not provide the appointment of Member of Indian Legal Service as a Member of the Tribunal under clause (b) of sub-Section (1) of S. 21 of the Act. Section 21(2)(a) provides that a member of the Indian Legal Service w....
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....ection 21 of the Act, in contradistinction to the provisions contained in clause (b) of sub-rule (1) of Rule 2 as also clause (b) of sub-Section(1) of Section 21 of the Act. A person who is qualified to be appointed only as a special Director (Appeals) cannot be appointed as a member of the Tribunal by back door entry with the aid of Rule 5 which is ultra virus the provisions contained in Section 21(1)(b) of the Act and contrary to Rule 2(1)(b) of the Rules. One who is or has been or is qualified to be a District Judge, alone can be appointed as a member. 19. The fact is that there are three independent wings, namely, judiciary, legislative and executive. It is in view of the scheme of the Constitution of India, judicial independence is required to be maintained. Persons so recruited as subordinate judicial officers under Article 234 of the Constitution can be posted by way of promotion to the cadre of District Judge in the manner laid down in Article 233 of the Constitution of India or persons qualified as indicated in clause (2) of Article 233, can be appointed to the cadre of District Judge. 20. On behalf of Union of India, Mr.Jashwant Singh, Under Secretary to the Governm....
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....at least three years." 25. It is in view of these observations, it was submitted that there is no need that a person qualified to be a District Judge should be strictly in accordance with the provisions contained in the Constitution of India. 26. So far as the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as "the Recovery Act") is concerned, Section 5 provides qualifications for appointment as Presiding Officer. According to that section a person shall not be qualified for appointment as the Presiding Officer of a Tribunal unless he is, or has been, or is qualified to be, a District Judge. Parliament also provided qualifications for appointment as a Chairperson of the Appellate Tribunal in section 10 of the Recovery Act, which reads as under:- (a) is, or has been, or is qualified to be, a Judge of a High Court; or (b) he has been a member of the Indian Legal Service and has held a post in Grade 1 of that service for at least three years; or 27. In the present Act, a Member of Indian Legal Service, who has held post in Grade 1 in that service can be appointed as a Special Director (Appeals) while in the Recove....
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.... administrative exigencies. It was stated that selection process is not complete. If the appointment is quashed, then the Tribunal will have to be closed. It may be noted that the appointment must be in accordance with law and if the appointment is not in accordance with law, the same is required to be quashed. It was submitted on behalf of the petitioner in reply to the submissions made by the Union of India that a person who is not qualified to be appointed as District Judge, can he be appointed as a High Court Judge? Learned counsel for the petitioner submitted that in the Government of India Act, 1935, there was a provision, namely, Section 220(3). However, the framers of the Constitution thought it proper to provide different provisions for the appointment of a District Judge, a High Court Judge and a Judge of the Supreme Court. It was submitted that a distinguished jurist can be appointed as a Judge in the Supreme Court but such is not the position for appointment in the High Court. He drew our attention to Section 220 of the Government of India Act, 1935. Clause (b) of sub-section (3) of Section 220 of the said Act reads as under:- It was submitted that the framers of ....
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....wherein the name of Justice Sahai as well as Mr.D.P.Sharma came to be included. It is in view of this oral submission made by the respondent on behalf of the petitioner, it was submitted that after the appointment of Justice Sahai, the said list is no more operative and the person from that list cannot be appointed. When Justice Sahai was appointed as the Chairperson, respondent No. 3, Mr.D.P.Sharma, was appointed as a Part Time Member and it was submitted that there is no question of lien on the post of Chairperson. On behalf of the petitioner in an other petition, namely, C.W.No. 1335/2004, it was pointed out that the Foreign Exchange Management (Removal of Difficulties) Order 2000, the copy of which is produced on record as Annexure-P.7, is contrary to the provisions contained in Section 20 of the Act. Learned counsel submitted that there is no provision for appointment on ad hoc basis to discharge the functions of a Chairperson and Members of the Appellate Tribunal. Therefore, the provision could not have been made under the aforesaid order (Annexure-P.7). This section does not permit any ad hoc appointment. The Central Government could not appoint any one on that basis, par....
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....n to appoint persons of the department as a Member or a Chairperson of the Tribunal. It was further submitted that the Constitution of India prescribe the qualification for a District Judge. The Apex Court has pointed out the meaning of "service" and yet the Government is keen to appoint executives for judicial functions. So far as the appointment of these persons to the post of Appellate Officers, as envisaged in Section 17 of the Act is concerned, it was submitted that persons who are qualified as indicated in sub-section (2) of Section 21 may be considered. However, a person who has been a member of Indian Revenue Service and has held a post equivalent to a Joint Secretary to the Government of India or a person who has been a member of the Indian Legal Service and had held a post in Grade I of that service, cannot be appointed as a Member of the Tribunal but can be appointed only as a Special Director (Appeals). Thus, by this circular the executive is trying not only to by-pass the provisions of the law but to get an entry in the judicial service. According to the petitioner, the same is required to be deprecated. Reading the provisions contained in Section 20, it is very cle....
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.... 4 initially as part time members is challenged by the petitioner. "Till India attained independence, the position was that district judges were appointed by the Governor from three sources, namely, (i) the Indian Civil Service, (ii) the Provincial Judicial Service, and (iii) the Bar. But after India attained independence in 1947, recruitment to the Indian Civil Service was discontinued and the Government of India decided that the members of the newly created Indian Administrative Service would not be given judicial posts. Thereafter district judges have been recruited only from either the judicial service or from the Bar. There was no case of a member of the executive having been promoted as a district judge. If that was the factual position at the time the Constitution came into force, it is unreasonable to attribute to the makers of the Constitution, who had so carefully provided for the independence of the judiciary, an intention to destroy the same by an indirect method. What can be more deleterious to the good name of the judiciary than to permit at the level of district judges, recruitment from the executive departments? Therefore, the history of the services also s....
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....ict doctrine of separate of powers, provides for an independent judiciary in the States; it constitutes a High Court for each State, prescribes the institutional conditions of service of the Judges thereof, confers extensive jurisdiction on it to issue writs to keep all tribunals, including in appropriate cases the Governments, within bounds and gives to it the power of superintendence over all courts and tribunals in the territory over which it has jurisdiction. But the makers of the Constitution also realized that "it is the Subordinate Judiciary in India who are brought most closely into contact with the people, and it is no less important, perhaps indeed even more important, that their independence should be placed beyond question than in the case of the superior Judges." Presumably to secure the independence of the judiciary from the executive, the Constitution introduced a group of articles in Ch.VI of Part VI under the heading "Subordinate Courts". But at the time the Constitution was made, in most of the States the magistracy was under the direct control of the executive. Indeed it is common knowledge that in pre-independent India there was a strong agitation that the judic....
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....erarchy of Labour Courts and Industrial Courts The fact that the Chief Presidency Magistrate and the Sessions Judge were also included in the definition of "District Judge" indicates that a wide interpretation is to be given to the expression "District Judge". The extensive definition of a District Judge under Article 236 is indicative of the same." The Court pointed out in paragraph 12 after considering Chander Mohan's case (supra) as under:- "In so interpreting judicial service in contradistinction to executive service where some executive officers may also be performing judicial or quasi judicial functions, this Court was at pains to emphasise the constitutional scheme for independence of the judiciary. It said that the acceptance of this (i.e. Government's) position would take us back to pre-independence days and would also cut across the well knit scheme of the Constitution providing for independence of the judiciary. This Court, Therefore, defined judicial service in exclusive terms as consisting only of judicial officers discharging entirely judicial duties. It said that having provided for appointments to that service and having entrusted the control of ....