Facts of the Case

The Revenue had filed an appeal before the Delhi High Court under Section 260A of the Income-tax Act. Earlier, by order dated 22 September 2005, the Court directed the appellant to place on record evidence demonstrating that a reference had been made to the Committee on Disputes (COD) within the period prescribed by the Supreme Court in ONGC v. Collector of Central Excise.

The Court had observed that where no such reference was made within the stipulated period, the appeal would be liable to dismissal due to non-compliance with an essential legal requirement. The appellant was therefore granted an opportunity to produce evidence regarding the reference made to the COD.

 

Issues Involved

  1. Whether the appeal could survive when the reference to the Committee on Disputes was made beyond the period prescribed by the Supreme Court.
  2. Whether the High Court possessed the power to extend the time limit prescribed for making such reference.
  3. Whether delay in obtaining COD clearance could be condoned by the High Court.

 

Petitioner’s (Revenue’s) Arguments

  • The Revenue filed an affidavit stating that references had in fact been made to the Committee on Disputes.
  • It was submitted that although the references were made, they were made beyond the one-month period stipulated for that purpose.
  • Learned counsel argued that mere delay in making the reference should not result in dismissal of the appeal.
  • It was further contended that the High Court had the authority to extend the period prescribed for making the reference.

 

Respondent’s Arguments

  • The respondent relied upon the mandatory nature of the Supreme Court’s directions requiring timely reference to the Committee on Disputes.
  • It was contended that failure to comply with the prescribed timeline rendered the appeal incompetent and liable to dismissal.

 

Court Order / Findings

The Delhi High Court rejected the Revenue’s contention and held that:

  • The one-month period for making a reference to the Committee on Disputes had been specifically stipulated by the Supreme Court.
  • The Supreme Court’s decision did not authorize High Courts to extend the prescribed period.
  • A High Court cannot disregard or dilute a binding direction issued by the Supreme Court.
  • Since the references were admittedly made beyond the prescribed period, the Court had no option but to dismiss the appeals.

Accordingly, the appeal was dismissed.

 

Important Clarification

The judgment emphasizes that:

  • Compliance with the Supreme Court's directions regarding COD approval was mandatory at the relevant time.
  • Delay in making a reference to the Committee on Disputes could not be condoned by the High Court in the absence of authority from the Supreme Court.
  • High Courts are bound by procedural requirements and timelines prescribed by the Supreme Court.
  • Failure to obtain or seek COD clearance within the stipulated period renders the appeal liable to dismissal.

Sections Involved

  • Section 260A, Income-tax Act, 1961 – Appeal to the High Court.
  • Compliance requirement laid down by the Supreme Court in Oil and Natural Gas Commission v. Collector of Central Excise, (1994) 116 CTR (SC) 643 regarding reference to the Committee on Disputes (COD) before pursuing litigation between Government departments/Public Sector Undertakings.

Link to Download the Order

https://delhihighcourt.nic.in/app/case_number_pdf/2006:DHC:24411-DB/61320012006ITA4712005_150702.pdf

 

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