TaxTMI 
TaxTMI 
TaxTMI 
Procedural Mechanisms for Executing Supreme Court Cost Awards under Indian Income Tax Law : Clause 370 of Income Tax Bill, 2025 Vs. Section 266 of Income-tax Act, 1961
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....t of Supreme Court cost orders in tax proceedings. While both provisions are succinct, their implications for judicial administration, federal structure, and litigant rights are significant. This commentary examines Clause 370 in detail, elucidates its purpose, analyzes its operative language, and offers a comprehensive comparative analysis with Section 266, thereby situating the provision within the broader landscape of statutory execution mechanisms in Indian law. Objective and Purpose The principal objective of both Clause 370 and Section 266 is to facilitate the effective execution of cost orders issued by the Supreme Court in income tax cases. The legislative intent is rooted in ensuring that the authority of the Supreme Court is not....
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....e for its brevity, but each phrase carries legal significance, which is analyzed in detail below. 1. Jurisdiction and Competence of High Court The provision vests the High Court with the jurisdiction to act upon a petition seeking execution of a Supreme Court order relating to costs. This reflects the principle that execution of decrees and orders is ordinarily the function of the court of first instance or such court as designated by statute. The High Court, being the supervisory authority over subordinate courts in the state, is appropriately placed to ensure the integrity and uniformity of the execution process. The language "may, on petition made" indicates that the process is not automatic; it is initiated by an interested party (ty....
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....s carried out by courts of original jurisdiction (e.g., District Courts or Civil Judges). The phrase "any court subordinate to the High Court" provides the High Court with discretion to select the most appropriate forum for execution, typically based on the location of the judgment debtor or the situs of attachable assets. This flexibility is essential for practical enforcement and avoids unnecessary forum shopping or procedural delays. 4. Procedural Safeguards and Judicial Discretion The use of the word "may" rather than "shall" indicates that the High Court retains discretion to determine whether the petition is appropriate for transmission. This discretion may be exercised, for example, if there are doubts about the authenticity of th....
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....70, 2025: "The High Court may, on petition made for the execution of the order of the Supreme Court in respect of any costs awarded thereby, transmit the order for execution to any court subordinate to the High Court." There are no substantive changes in language, scope, or procedural mechanism between the two provisions. This continuity reflects the legislature's satisfaction with the existing framework and the absence of any perceived need for reform in this area. Legislative Context and Rationale for Continuity The decision to retain the provision in its original form in the new Income Tax Bill, 2025, despite a broader overhaul of the income tax statute, suggests that the mechanism has operated effectively in practice. The legisla....
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.... preference for continuity in procedural mechanisms that are working well, even as substantive tax law undergoes significant reform. However, the unchanged language also means that any ambiguities or practical issues that have arisen u/s 266 may persist under Clause 370, unless addressed by judicial interpretation or subordinate legislation. Potential Ambiguities and Issues in Interpretation The provision is clear in its intended application, but certain ambiguities may arise in practice: * Nature of Costs: The provision does not define "costs," leaving it to be interpreted in accordance with general legal principles and the specific language of the Supreme Court's order. Disputes may arise as to whether costs include interest, inc....