Facts of the Case

The appeal was filed by the Revenue against National Thermal Power Corporation Ltd. (NTPC), a Government of India Public Sector Undertaking (PSU).

At the time of hearing, the appellant's counsel informed the Court that, in view of the decisions of the Supreme Court in the cases concerning ONGC, MTNL and other similar matters, an application had already been moved before the High Powered Committee (HPC) seeking the requisite clearance for pursuing the litigation between Government departments/entities and Public Sector Undertakings.

Since the required clearance had not yet been obtained, the matter was placed before the Court for appropriate orders.

 

Issues Involved

  1. Whether the appeal filed by the Revenue against a Government-owned Public Sector Undertaking could proceed without obtaining clearance from the High Powered Committee as mandated by Supreme Court decisions in ONGC and related cases.
  2. Whether the appeal should be kept pending or disposed of until such clearance was obtained.

 

Petitioner’s (Revenue’s) Arguments

  • The Revenue acknowledged that the dispute was between the Government of India (Revenue Department) and NTPC, a Public Sector Undertaking.
  • It was submitted that an application seeking clearance from the High Powered Committee had already been filed.
  • The Revenue requested that appropriate orders be passed keeping in view the requirement of such clearance.

 

Respondent’s Arguments

The order does not record any specific submissions on behalf of NTPC. The matter was disposed of primarily on the basis of the legal requirement regarding High Powered Committee clearance.

 

Court Order / Findings

The Delhi High Court observed that the dispute was between:

  • The Government of India (Revenue), and
  • National Thermal Power Corporation Ltd. (NTPC), a Public Sector Undertaking.

Relying upon the Supreme Court decisions in ONGC, MTNL, and other similar cases, the Court held that the required clearance from the High Powered Committee was necessary before the appeal could proceed.

Accordingly, the Court disposed of the appeal at that stage. However, liberty was granted to the appellant (Revenue) to revive the appeal after obtaining the requisite clearance from the High Powered Committee.

Therefore, the appeal was disposed of without adjudication on merits.

 

Important Clarification

  • The High Court did not examine any substantive question of income tax law.
  • No finding was given on the merits of the dispute.
  • The appeal was disposed of solely because the mandatory clearance from the High Powered Committee had not been obtained.
  • The Revenue was expressly granted liberty to seek revival of the appeal after obtaining such clearance.
  • The order follows the legal principle laid down by the Supreme Court in ONGC, MTNL and similar cases governing litigation between Government Departments and Public Sector Undertakings.

Link to Download the Order

https://delhihighcourt.nic.in/app/case_number_pdf/2004:DHC:10900-DB/BCP13122004ITA7692004_122812.pdf

 

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