Facts of the Case

The Revenue filed an appeal before the Delhi High Court against National Thermal Power Corporation of India Ltd. (NTPC), a Public Sector Undertaking of the Government of India. During the hearing, counsel for the appellant informed the Court that an application had been moved before the High Powered Committee seeking the necessary clearance required for pursuing litigation between Government departments and PSUs.

Since such clearance had not yet been obtained, the matter came up for consideration regarding the maintainability of the appeal at that stage.

 

Issues Involved

  1. Whether the Revenue could continue with the appeal against NTPC without obtaining prior clearance from the High Powered Committee.
  2. Whether the appeal should remain pending or be disposed of pending grant of such clearance.

 

Petitioner’s Arguments (Revenue)

  • The appellant submitted that it had already approached the High Powered Committee for obtaining the requisite clearance.
  • It was argued that the matter involved litigation between the Government of India (Revenue) and NTPC, which is a Public Sector Undertaking.
  • Therefore, appropriate permission from the Committee was being sought in compliance with the Supreme Court’s directions governing disputes between Government entities and PSUs.

 

Respondent’s Arguments (NTPC)

The order does not record any specific submissions on behalf of NTPC. The decision was primarily based on the procedural requirement of obtaining clearance from the High Powered Committee before proceeding with the litigation.

 

Court Order / Findings

The Delhi High Court noted that the dispute was between:

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

The Court relied upon the principles laid down by the Supreme Court in ONGC, MTNL and other similar cases, which required clearance from the High Powered Committee before such disputes could be pursued in Court. Since the appellant had already moved the Committee for clearance, the Court disposed of the appeal at that stage.

The Court further clarified that:

  • The appellant would be at liberty to revive the appeal after obtaining the requisite clearance from the High Powered Committee.
  • Accordingly, the appeal was disposed of.

 

Important Clarification

  • Litigation between Government departments and Public Sector Undertakings was governed by the Supreme Court’s directions requiring clearance from the High Powered Committee/Committee on Disputes.
  • Absence of such clearance could prevent the Court from proceeding with the appeal.
  • Disposal of the appeal on this ground did not amount to adjudication on merits.
  • The Revenue retained the right to seek revival of the appeal after obtaining the necessary approval.

 

Sections Involved

The order does not discuss any specific provision of the Income-tax Act, 1961. The matter primarily concerns the requirement of obtaining clearance from the High Powered Committee (HPC)/Committee on Disputes (COD) in litigation between the Government of India and a Public Sector Undertaking (PSU), in accordance with the principles laid down by the Supreme Court in ONGC, MTNL and similar cases

 

Link to Download the Order

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

 

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