COMMISSIONER OF INCOME-TAX VS BHAGIRATH & BROS.
1999 P T D 527
[225I T R 483]
[Madhya Pradesh High Court (India)]
Before A.R. Tiwari and Shambhoo Singh, JJ
COMMISSIONER OF INCOME-TAX
Versus
BHAGIRATH & BROS. and others
Miscellaneous Civil Cases Nos. 368 to 374 and 376 to 383 of 1996, decided on 21/09/1996.
Income-tax.
----Reference---Procedure---Application for directing reference---Dismissal of application on account of non-appearance of applicant and failure to take necessary steps---Restoration of application---High Court has inherent power to restore application---High Court will exercise its power only when sufficient cause is shown for the non-appearance and failure to take necessary steps---Indian Income Tax Act, 1961, S.256---Indian Civil Procedure Code, 1908, S.151; 0.3,Rr.4(1), 6(2), O. 9, Rr. 2, 4 & O. 48, R. 1(1).
Section 256(1) of the Income Tax Act, 1961, enables the assessee or the Commissioner to require the Tribunal to refer to the High Court any question of law arising out of its order and empowers the Tribunal to draw up a statement of the case and refer it to the High Court on its satisfaction. On refusal, the aggrieved party may resort to section 256(2) of the Act for direction to refer questions. The jurisdiction of the High Court is only advisory in nature. The party desirous of obtaining advice, i.e. opinion is, thus, required to be vigilant and is expected to pursue such application with due diligence.
Where an application for directing reference is dismissed on account of non-appearance and failure to take necessary steps there is no specific provision in the Act in respect of restoration. But every Court should be deemed to have "inherent powers" to make such order as may be necessary to meet the ends of justice or to prevent abuse of the process of the Court. However, the existence of sufficient cause for the non-appearance and failure to take necessary steps is a sine qua non for exercise of the powers. It does not and cannot depend on the will or mere assertion of the party in default. A lis has to be prosecuted without fault and default. The prayer for recall should be backed by cause considered sufficient:
Held, dismissing the petitions, that the applications were signed by counsel on behalf of the applicant but the instrument of his appointment as a pleader was never filed in the case dismissed in default and on failure. Moreover, the application in each case contained an averment that senior counsel had gone out of the country but the application did not indicate why, at least, junior counsel or the applicant himself did not or could not appear to make appropriate submission. The applications were also conspicuously silent about any cause, muchless sufficient, for failure to take steps, despite the large number of adjournments granted. In cases filed between 1992 and 1995, the applicant, despite adjournment and caution in some cases, took no steps to pay process fee or take other necessary steps. This manifested gross negligence. These applications were now filed without pleading or offering any material in support of sufficient cause. The applications were liable to be dismissed summarily.
Gasper (A.) v. CIT (1991) 192 ITR 382 (SC);Jaipur Mineral Development Syndicate v. CIT (1977) 106 TR 653 (SC);Lachman v. Devi (1920) 56 IC 884 and Parashuram Pottery Works Co. Ltd. v. ITO (1977) 106 ITR 1 (SC.) ref.
A.M. Mathur and Vivek Sharan for the Commissioner.
JUDGMENT
A. R. TIWARI, J.---The identical relief of restoration, structured and spun on the identical ground of non-availability of senior counsel due to his having gone out of country at the relevant dates of dismissal of the miscellaneous civil cases, supported by identical affidavit of counsel whose instrument of appointment as pleader was not placed on record of those cases, is pressed in these cases, fifteen in number, analogously and is thus being considered in this common order.
Shunning prolixity, we may put the prologue. Dissatisfied by refusal of the Tribunal to state the case and refer the proposed question or questions under section 256(1) of the Income-tax Act, 1961 (for short, "the Act"), the applicant filed miscellaneous civil cases under section 256(2) of the Act which suffered mortality on account of non-appearance and failure to take necessary steps.
Right at the threshold it may be stated that the miscellaneous civil cases, dismissed in default; were registered on applications submitted under section 256(2) of the Act.
The factual matrix lies in a narrow compass. Miscellaneous Civil Case No.368 of 1996 is filed for restoration of Miscellaneous Civil Case No.46 of 1995 which was dismissed on August 21, 1996, in default of appearace as well as on failure to pay process fee and supply of copies; Miscellaneous Civil Case No.369 of 1996 is filed for restoration of Miscellaneous Civil Case No.590 of 1994 which was dismissed on August 20, 1996, in default of appearance and on the ground that needful was not done; Miscellaneous Civil Case No.370 of 1996 if filed for restoration of Miscellaneous Civil Case No.676 of 1992 which was dismissed on August 23, 1996, in default of appearance as well as on failure to supply indentical sets; Miscellaneous Civil Case No.371 of 1996 is filed for restoration of Miscellaneous Civil Case No. 164 of 1993 which was dismissed on August 26, 1996, in default of appearance as well as on failure to pay process fee and supply of copy; Miscellaneous Civil Case No.372 of 1996 is filed for restoration of Miscellaneous Civil Case No.587 of 1994 which was dismissed on August 20, 1996, in default of appearance as well as on failure to file Annexures and identical sets; Miscellaneous Civil Case No.373 of 1996 is filed for restoration of Miscellaneous Civil Case No.79 of 1995 which was dismissed on August 21, 1996, in default of appearance and on failure to supply identical sets; Miscellaneous Civil Case No.374 of 1996 is filed for restoration of Miscellaneous Civil Case No:23 of 1993 which was dismissed on August 28, 1996, in default of appearance and on failure to supply identical sets; Miscellaneous Civil Case No.376 of 1996 is filed for restoration of Miscellaeous Civil Case No. 432 of 1994 which was dismissed on August 29, 1996, in default of appearance and on failure to pay process fee; Miscellaneous Civil Case No.377 of 1996 is filed for restoration of Miscellaneous Civil Case No.340 of 1993 which was dismissed on August 29, 1996, in default of appearance and on failure of payment of provident fund and supply of copy; Miscellaneous Civil Case No.378 of 1996 is filed for restoration of Miscellaneous Civil Case No.552 of 1994 which was dismissed on August 26, 1996, in default of appearance as well as on failure to pay process fee and supply of copy; Miscellaneous Civil Case No.379 of 1996 is filed for restoration of Miscellaneous Civil Case No.588 of 1994 which was dismissed on August 20, 1996, in default of appearance and on the ground that needful was not done; Miscellaneous Civil Case No.380 of 1996 is field for restoration of Miscellaneous Civil Case No.638 of 1992 which was dismissed on August 23, 1996, in default of appearance as well as on failure to supply identical sets; Miscellaneous Civil Case No.381 of 1996 is filed for restoration of Miscellaneous Civil Case No.421 of 1993 which was dismissed on August 29, 1996, in default of appearance as well as on failure to pay process fee; Miscellaneous Civil Case No.382 of 1993 is field for restoration of Miscellaneous Civil Case 490 of 1993 which was dismissed on August 27,. 1996, in default of appearance as well as on failure to pay process fee and Registered A.D. charges; and Miscellaneous Civil Case No.383 of 1996 is filed for restoration of Miscellaneous Civil Case No.64 of 1995, which was dismissed on August 21, 1996, in default of appearance as well as on failure to supply identical, sets.
We have heard Shri A.M. Mathur, learned senior counsel with Shri Vivek Sharan, for the applicant/Revenue, on the question of admission of, these cases.
There is no specific provision in the Act on the point of prayer for restoration. But every Court should be deemed to have "inherent powers" to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the Court. This point is settled in the context of the old Act, i.e., Indian Income-tax Act, 1922, also. In Jaipur Mineral Development Syndicate v. CIT (1977) 106 ITR 653 (SC), it is held that (at page 657):
In exercising inherent power, the Courts cannot override the express provisions of law. Where however, as in the present case, there is no express or implied prohibition to recalling an earlier order made because of the absence of the party and to directing the disposal 'of the reference on merits, the Courts, in our opinion, should not be loath to exercise such power provided the party concerned approaches the Court with due diligence and shows sufficient cause for its non-appearance on the date of hearing. "
Power is thus available to "recall" an order but on existence of "sufficient cause".
Section 256(1) of the Act enables' the assessee or the Commissioner to require the Tribunal to refer to the High Court any question of law arising out of its order and empowers the Tribunal to draw up a statement of the case and refer it to the High Court on its satisfaction. On refusal, the aggrieved party may resort to section 256(2) of the Act for direction to the Tribunal to state the case and refer the question or questions. The jurisdiction of the High Court, as held in A. Gasper v. CIT (1991) 192 ITR 382 (SC) is only advisory in nature. The party desirous of obtaining advice, i.e., an opinion, is thus required to vigilant and is expected to pursue such application with due diligence.
On receipt of an application under section 256(2) of the Act, the High Court may direct issuance of notice to the opposite party. The Civil Procedure Code prescribes the procedure, which may be considered to appreciate the contentions
(i)???????? Order XLVIII, rule 1(1), lays down that :--
"1.??????? Process to be served at expense of art issuing.---(1) Every process issued under this Code shall be served at the expense of the party on whose behalf it is issued, unless the Cour otherwise directs. "
(ii) Order IX, rules 2 and 4, provide that
"2???????? Dismissal of suit where summons not served in consequence of plaintiff's failure to nay costs ---Where on the day so fixed it is found that the summons has not been served upon the defendant in consequence of the failure of the plaintiff to pay the court-fee or postal charges, (if any), chargeable for such service, or to present copies of the plaint or concise statements, as required by rule 9 of Order VII, the Court may make an order that the suit be dismissed:"
"4.??????? Plaintiff may bring fresh suit or Court ma restore suit to file.--?Where a suit is dismissed under rule 2 or rule 3, the plaintiff may (subject to the law of limitation) bring a fresh suit; or he may apply for an order to set the dismissal aside, and if he satisfies the Court that there was sufficient cause for such failure as is referred to in rule 2, or for his non-appearance, as the case may be, the Court shall make an order setting aside the dismissal and shall appoint a day for proceedings with the suit. "
(iii) Order II, rules 4(1) and 6(2) contain that:
"5.??????? Appointment of pleader.--(1) No pleader shall act for any person in any Court, unless he has been appointed for the purpose by such person by a document in writing signed by such person or by his recognised agent or by some other person duly authorised by or under a power of attorney to make such appointment. "
"6(2).?? Appointment to be in writing and to be filed in Court.---Such appointment may be special or general and shall be made by an instrument in writing signed by the principal, and such instrument or, if appointment is general, a certified copy, thereof shall be filed in Court. "
(iv)?????? Section 151, saving of inherent powers of the Court, mandates that
"151.??? Saving of inherent power of Court.---Nothing in this Code shall be deemed to limit or otherwise affect the inherent power of the Court to make such orders as may be necessary for the ends of justice'; or to prevent abuse of the process of the Court."
In Order IX, rule 4 of the Code of Civil Procedure, the words "such failure as is referred to in rule 2" are substituted by the Civil Procedure Code (Amendment) Act, 1976. The Court can recall the order and can set the dismissal aside on sufficient cause ---Lachman v. Devi (193,0) 56 IC 884. It is, thus, clear that the existence of sufficient cause, as noted earlier, is the sine qua non for exercise of the powers. It does not and cannot depend on the will or mere assertion of the party in default. A lis has to be prosecuted without fault and default. The prayer for recall should be backed by cause considered sufficient. Absent this the answer is bound to. be "monosyllabic 'no".
So, the core question imprimis is whether the applications under consideration show sufficient cause? We notice that the applications are signed by counsel, Shri Vivek Sharan, on behalf of the applicant, but the instrument of his appointment as a pleader was never filed in the cases dismissed in default and on failure. Moreover, the application in each case contains an averment that senior counsel had gone out of country to Helsinki (Finland) to attend Law Association's Conference as Indian Delegate. It is a trite position that senior counsel appears in the Court with his junior. But the application does not indicate as to why at least junior counsel or the applicant himself did not or could not appear to make appropriate submissions for whatever worth. The applications are also conspicuously silent about any cause, much less sufficient, for failure to take steps, despite the prodigious number of adjournments in some cases to do the needful, as directed. No cause is, thus, shown for non-appearance as well as for failure to do the needful. In the face of absence of cause for failure, the question of non?appearance becomes insignificant.
Moreover, we noted in the orders passed in Miscellaneous Civil Case No.676 of 1992 and Miscellaneous Civil Case No.638 of 1992 that the question proposed in regard to section 43-B is already answered by this Court in several miscellaneous cases against the Department. We do not understand the propriety of filing Miscellaneous Civil Case No.370 of 1996 and Miscellaneous Civil Case No.380 of 1996, respectively, for restoration of even these two cases.
In a case under the Income Tax Act, the Supreme Court held in Parashuram Pottery Works Co. Ltd. v. ITO (1977) 106 ITR 1; AIR 1977 SC 429 as under (headnote of AIR 1977 SC):
"At the same time, it must be borne in mind that the policy of law is that there must be a point of finality in all legal proceedings, that stale issues should not be reactivated beyond stage and that lapse of time must induce repose in and set at rest judicial and quasi judicial controversies as it must in other spheres of human activity. "
In the case on hand, filed between 1992 and 1995, the applicant, despite adjournment and caution in some cases, took no steps to pay the process fee or take other necessary steps. This manifested gross negligence. These applications are now filed without even pleading, much less offering any material in support of sufficient cause.
These cases, thus, reflect, gross negligence. There is failure on the part of the applicant to show due diligence and comply with the directions issued by this Court. Law does not permit a state of hibernation of case in this manner.
We may, however, add that in the face of prolonged failure to take steps, we would have found it rather difficult to show further indulgence by granting more time and thus by granting further adjournments even when some one would have appeared on behalf of the applicant on the date of dismissal of the cases. The question is not one of non-appearance only, but of failure to take steps and, thus, of utter disregard to the opportunities granted by this Court to do the needful.
In view of the aforesaid position, we are satisfied that no sufficient cause is made out for allowing the prayer ex voto and recall the orders passed by this Court in the aforesaid miscellaneous civil cases and to set the dismissal aside. We know that such prayers should be considered liberally, but the facts as unfolded in these cases clinched the issues against the applicant and did not justify revival of the cases dismissed in default.
In the circumstances we decline admission and dismiss these applications summarily.
Retain this order in the record of Miscellaneous Civil Case No.368 of 1996 and place its copy each in the records of other connected miscellaneous civil cases, as particularized above, for ready reference.
M.B.A./1735/FC ??????????????????????????????????????????????????????????????????? Application dismissed.