Case Note & Summary
The petitioner, Reliance Industries Limited, filed a writ petition challenging the withdrawal of a communication dated 21st October 2020 issued by the Chief Commissioner of Income Tax, Mumbai, which had confirmed the petitioner's eligibility to resolve tax disputes under the Direct Tax Vivad Se Vishwas Act, 2020 (DTVSV Act). The petitioner had sought clarification regarding its eligibility due to two pending criminal proceedings: (A) FIR No.17/2014 under the Prevention of Corruption Act and IPC, where no charge-sheet had been filed, and (B) Special CBI Case No.91 of 2011 where cognizance had been taken for offences under IPC and PC Act. The respondent withdrew the eligibility communication on 25th January 2021, prompting the petitioner to approach the High Court. The court examined Section 9(c) of the DTVSV Act, which excludes persons against whom prosecution has been instituted for offences under the PC Act or IPC in relation to tax matters. The court interpreted 'prosecution has been instituted' to mean filing of a charge-sheet or taking cognizance by a court, not mere registration of an FIR. Since no charge-sheet was filed in the first proceeding and the second proceeding did not relate to tax matters, the petitioner was held eligible. The court also held that the withdrawal of the eligibility communication was arbitrary and without authority. The petition was allowed, the impugned communication was quashed, and the respondents were directed to process the petitioner's declarations under the DTVSV Act.
Headnote
A) Direct Tax Vivad Se Vishwas Act, 2020 - Section 9(c) - Eligibility - Pending Criminal Proceedings - Interpretation of Section 9(c) of the DTVSV Act, which excludes persons in respect of whom prosecution has been instituted for any offence punishable under the Prevention of Corruption Act, 1988 or the Indian Penal Code in relation to tax matters. The court held that the phrase 'prosecution has been instituted' means filing of a charge-sheet or taking cognizance by a court, and mere registration of an FIR does not amount to institution of prosecution. The petitioner was held eligible as no charge-sheet had been filed in the first proceeding and in the second proceeding, the charge-sheet did not relate to tax matters. (Paras 10-20) B) Administrative Law - Withdrawal of Communication - Legitimate Expectation - The respondent's withdrawal of the eligibility communication dated 21st October 2020 without any change in circumstances or legal basis was held to be arbitrary and without authority of law. The court restored the earlier communication and directed the respondents to process the petitioner's declarations under the DTVSV Act. (Paras 21-30)
Issue of Consideration
Whether the petitioner is eligible to file a declaration under the Direct Tax Vivad Se Vishwas Act, 2020 despite the existence of pending criminal proceedings under the Prevention of Corruption Act and Indian Penal Code, and whether the respondent could withdraw the earlier communication confirming eligibility.
Final Decision
The court allowed the writ petition, quashed the communication dated 25th January 2021, and directed the respondents to process the petitioner's declarations under the DTVSV Act in accordance with law.
Law Points
- Interpretation of Section 9(c) of DTVSV Act
- Eligibility for tax dispute resolution scheme
- Effect of pending criminal proceedings on eligibility
- Withdrawal of administrative communication without authority
