Sanjay Pandey & Ors v. Central Board of Direct Taxes
[Citation -2014-LL-1112-13]

Citation 2014-LL-1112-13
Appellant Name Sanjay Pandey & Ors
Respondent Name Central Board of Direct Taxes
Court HIGH COURT OF DELHI AT NEW DELHI
Relevant Act Income-tax
Date of Order 12/11/2014
Judgment View Judgment
Keyword Tags show-cause notice
Bot Summary: On the aforesaid date, learned counsel for the petitioners was requested to address arguments on the maintainability of the present petition as the petitioners have approached the High Court directly, when as per the guidelines in the case of L. Chandra Kumar vs. Union of India Ors. In view of the fact that judicial review is one of the basic features of the Constitution of India, in the well known case of L. Chandra Kumar, the Supreme Court had clarified that the High Courts and the Supreme Court shall have the powers of judicial review over the decision of the Tribunal but it had gone on to lay down a road map to be followed by litigants governed under the aforesaid Statute, for seeking legal recourse. The only fetter imposed on the said discretion is that as the first step, the litigants shall approach the Tribunal that will continue to act like courts of first instance in respect of areas of law for which they have been constituted and only after a decision is taken by the Tribunal, can they approach the Division Bench of the High Court within whose jurisdiction the Tribunal falls. Further, if aggrieved by the decision of the Division Bench of the concerned High Court, the aggrieved party can move the Supreme Court under Article 196 of the Constitution of India. While objections in respect of the pecuniary, personal and territorial jurisdiction ought to be ordinarily raised at the earliest opportunity and the Court is well empowered to decline to entertain such an objection at a later stage or if it is raised very belatedly, when it comes to lack of inherent jurisdiction, nothing can confer the same on the Court, either by waiver or on account of oversight. Further, reliance placed by him on the decision of the Supreme Court in the case of State Bank of India and Ors will also not be of any assistance to the petitioners for the reason that in the aforesaid case, aggrieved by the prosecution launched against the appellant/Bank under Section 24 of the Contract Labour Act, 1970, it had moved the High Court under Section 482 Cr.PC for quashing the said prosecution. The High Court had declined to grant any relief to the appellant/Bank and aggrieved by the said order, the appellant/Bank had approached the Supreme Court, where it was claimed that another Single Judge of the very same High Court had quashed a similar prosecution initiated against the Bank, by accepting their contention that in view of Section 1(4), the Act had no application to their establishment at the relevant point in time.


* IN HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 3805/2014 Decided on : 12.11.2014 IN MATTER OF SANJAY PANDEY & ORS ..... Petitioners Through : Mr. Sanjeev Rajpal, Advocate versus CENTRAL BOARD OF DIRECT TAXES ..... Respondent Through : Mr. R.V. Sinha and Mr. A.S. Sinha, Advocates CORAM HON'BLE MS.JUSTICE HIMA KOHLI HIMA KOHLI, J. (ORAL) 1. present petition has been filed by petitioners praying inter alia for quashing order dated 12.11.2013, passed by respondent/CBDT, declining to promote them w.e.f. 23.9.2010, date when DPC was held. 2. On 24.9.2014, it was recorded that petitioners, who were working on post of Additional Commissioners of Income Tax, Department of Revenue, Ministry of Finance, have grievance that respondent/CBDT has violated order dated 6.7.2012 passed by Division Bench in batch of writ petitions filed by them, including WP(C)No.8017/2010 filed against order dated 2.11.2010 passed W.P.(C) 3805/2014 Page 1 of 10 by Central Administrative Tribunal (CAT), Principal Bench, New Delhi. On aforesaid date, learned counsel for petitioners was requested to address arguments on maintainability of present petition as petitioners have approached High Court directly, when as per guidelines in case of L. Chandra Kumar vs. Union of India & Ors. reported as (1997) 3 SCC 261, in first instance, their remedy lies before Tribunal, since respondent/CBDT, being part of Central Government, comes under its jurisdiction. Learned counsel had sought adjournment to enable him to examine aforesaid aspect and address arguments. 3. Today, Mr. Rajpal, learned counsel for petitioners states that once notice to show cause was issued in present petition on 30.5.2014, this Court is precluded from raising question of maintainability of petition or going into issue of lack of jurisdiction for reason that any such decision would amount to reviewing order dated 30.5.2014, which is impermissible in law. To substantiate his argument, learned counsel relies on decision of Supreme Court in case of State Bank of India & Ors. vs. Labour Enforcement Officer (Central) and Anr., reported as (1997) 10 SCC 258. W.P.(C) 3805/2014 Page 2 of 10 4. It may be observed that Administrative Tribunals Act, 1985 is self-contained Code. Central Administrative Tribunals that have been constituted in terms of Article 323(A) & Article 323(b) of Constitution of India, have requisite jurisdiction to determine all service disputes, including vires of statutes or statutory rules. In view of fact that judicial review is one of basic features of Constitution of India, in well known case of L. Chandra Kumar (supra), Supreme Court had clarified that High Courts and Supreme Court shall have powers of judicial review over decision of Tribunal but it had gone on to lay down road map to be followed by litigants governed under aforesaid Statute, for seeking legal recourse. In this context, following observations of Supreme Court are relevant:- 93. Before moving on to other aspects, we may summarise our conclusions on jurisdictional powers of these Tribunals. Tribunals are competent to hear matters where vires of statutory provisions are questioned. However, in discharging this duty, they cannot act as substitutes for High Courts and Supreme Court which have, under our constitutional setup, been specifically entrusted with such obligation. Their function in this respect is only supplementary and all such decisions of Tribunals will be subject to scrutiny before Division W.P.(C) 3805/2014 Page 3 of 10 Bench of respective High Courts. Tribunals will consequently also have power to test vires of subordinate legislations and rules. However, this power of Tribunals will be subject to one important exception. Tribunals shall not entertain any question regarding vires of their parent statutes following settled principle that Tribunal which is creature of Act cannot declare that very Act to be unconstitutional. In such cases alone, concerned High Court may be approached directly. All other decisions of these Tribunals, rendered in cases that they are specifically empowered to adjudicate upon by virtue of their parent statutes, will also be subject to scrutiny before Division Bench of their respective High Courts. We may add that Tribunals will, however, continue to act as only courts of first instance in respect of areas of law for which they have been constituted. By this, we mean that it will not be open for litigants to directly approach High Courts even in cases where they question vires of statutory legislations (except, as mentioned, where legislation which creates particular Tribunal is challenged) by overlooking jurisdiction of Tribunal concerned. (emphasis added) 5. Thus, it was clarified that cause of action that had arisen subsequent to decision in case of L. Chandra Kumar (supra), shall have to be agitated before Tribunal in first instance and jurisdiction of Division Bench of concerned High Court under Article 226 of Constitution of India can be invoked only after approaching Tribunal and obtaining decision from it. As was discussed in aforesaid case, jurisdiction of High Court under Article 226 of Constitution of India has not been completely W.P.(C) 3805/2014 Page 4 of 10 ousted. only fetter imposed on said discretion is that as first step, litigants shall approach Tribunal that will continue to act like courts of first instance in respect of areas of law for which they have been constituted and only after decision is taken by Tribunal, can they approach Division Bench of High Court within whose jurisdiction Tribunal falls. Further, if aggrieved by decision of Division Bench of concerned High Court, aggrieved party can move Supreme Court under Article 196 of Constitution of India. 6. In present case, indisputably, in first round of litigation, petitioners had approached Tribunal for relief as court of first instance. After Tribunal had passed order, aggrieved parties including petitioners herein had approached Division Bench of this Court by filing writ petitions which were disposed of vide common judgment and order dated 6.7.2012. Now, for counsel for petitioners to urge that petitioners are well entitled to approach Single Judge of this Court directly for relief, which would lie in first instance before Tribunal, is found to be quite untenable and is turned down. W.P.(C) 3805/2014 Page 5 of 10 7. Coming next to submission made by learned counsel for petitioners that once notice to show cause was issued in present petition on 30.5.2014, any decision to non-suit petitioners on ground of lack of jurisdiction amounts to review, it may be noted that competence of Court to try and entertain case goes to very root of its jurisdiction. jurisdiction of Court is of various types, including inherent, territorial and pecuniary. While objections in respect of pecuniary, personal and territorial jurisdiction ought to be ordinarily raised at earliest opportunity and Court is well empowered to decline to entertain such objection at later stage or if it is raised very belatedly, when it comes to lack of inherent jurisdiction, nothing can confer same on Court, either by waiver or on account of oversight. 8. Resultantly, when inherent jurisdiction is lacking in court, mere issuance of notice to show cause in writ petition, cannot be treated as waiver. If it comes to notice of Court at any stage of proceedings, whether suo moto, or otherwise, that there is question that needs to be examined with regard to maintainability of petition on ground of lack of inherent jurisdiction, then there can be no question of waiver of such objection only on account of fact that notice to show cause has been issued in petition. Even W.P.(C) 3805/2014 Page 6 of 10 otherwise, if notice came to be issued in present petition, respondent/CBDT is not barred from raising same when filing their counter affidavit, which has yet to be filed. 9. Pertinently, Registry had listed present petition before Court with objection that it was maintainable before Tribunal. It appears that said objection was not brought to notice of predecessor Bench at time of admission, may be because none was present on behalf of respondent/CBDT on said date to assist Court. It appears that notice came to be issued in writ petition without examining aforesaid aspect. However, on very next date of hearing, i.e., on 24.09.2014, Mr. Sinha had appeared for respondent/CBDT and raised objection of maintainability of petition and learned counsel for petitioners was called upon satisfy court on that aspect. 10. submission made by learned counsel for petitioners that such detection is not fundamental in character or does not amount to anything more than irregularity in exercise of jurisdiction or that show cause notice having been issued in petition, Court is barred from questioning same subsequently, is found to be devoid of merits and is rejected. W.P.(C) 3805/2014 Page 7 of 10 11. Further, reliance placed by him on decision of Supreme Court in case of State Bank of India and Ors (supra) will also not be of any assistance to petitioners for reason that in aforesaid case, aggrieved by prosecution launched against appellant/Bank under Section 24 of Contract Labour (Regulation and Abolition) Act, 1970, it had moved High Court under Section 482 Cr.PC for quashing said prosecution. High Court had declined to grant any relief to appellant/Bank and aggrieved by said order, appellant/Bank had approached Supreme Court, where it was claimed that another Single Judge of very same High Court had quashed similar prosecution initiated against Bank, by accepting their contention that in view of Section 1(4), Act had no application to their establishment at relevant point in time. Taking note of aforesaid submission, Supreme Court had observed that if Single Judge was unable to share views expressed by another Judge on identical point, matter ought to have been referred to Division Bench in accordance with legal propriety and resultantly, SLP filed by Bank was allowed. 12. In present case, no decision has been taken either on merits or on issue of maintainability of present petition on ground of lack of jurisdiction. Simply because notice to show cause was issued W.P.(C) 3805/2014 Page 8 of 10 to respondent/CBDT on first date, will not preclude this Court from examining aspect of inherent jurisdiction on subsequent date. Nor would issuance of notice prevent respondent/CBDT from taking plea of lack of inherent jurisdiction in this court at first available opportunity or at time of filing counter affidavit or even thereafter. It is commonplace for respondents to raise number of preliminary objections, including legal objections as to maintainability of petition, both orally and when filing reply and it is equally commonplace for Courts to allow such objections, if found valid. show-cause notice is nothing but notice to respondent to show cause as to why petition should not be admitted for hearing. This Court is therefore of opinion that no view was taken by predecessor Bench on issue of maintainability of present petition, for order dated 24.9.2014 to be treated as review of earlier order. 13. In instant case, petitioners are working on different posts with respondent/CBDT and they have raised grievance with regard to their promotions. In such situation, they cannot be permitted to bypass forum of Tribunal and approach Single Judge of High Court directly for relief. It is for petitioners to follow route charted out by Supreme Court in case of L. W.P.(C) 3805/2014 Page 9 of 10 Chandra Kumar (supra). Only after they exhaust their remedy before Tribunal, can petitioners approach High Court in appeal, and in that eventuality, their petition would have to be placed before Division Bench for appropriate orders. 14. Accordingly, notice dated 30.5.2014 is discharged and writ petition is dismissed as not maintainable directly in High Court. However, liberty is granted to petitioners to approach Tribunal for appropriate relief, in accordance with law. (HIMA KOHLI) JUDGE NOVEMBER 12, 2014 sk/rkb W.P.(C) 3805/2014 Page 10 of 10 Sanjay Pandey & Ors v. Central Board of Direct Taxe
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