CIT vs. Kisan Ratilal Choksey Share & Securities (Bombay High Court)

DATE: (Date of pronouncement)
DATE: April 24, 2014 (Date of publication)

Click here to download the judgement (kisan_strictures.pdf)

Costs of Rs. 1 lakh levied on dept for “gross abuse of process of Court“. Later revoked on assurance that judicial orders would be abided

In an unfortunate incident, the department did not point out that its appeal for the earlier years in the case of the same assessee had been dismissed by the High Court. The High Court took a serious view of the matter and levied costs of Rs. 1 lakh on the department while observing:

It is unfortunate that the Revenue insists in arguing Appeals in this manner and for subsequent Assessment Years. The Revenue ought to have been fair and brought to the notice of this Court the fact that its Appeal challenging the very findings and conclusions for prior Assessment Years has been dismissed by this Court on merits. The reasons assigned ought to have been pointed out to us and thereafter, any explanation should have been offered for admission of this Appeal … It is a gross abuse of the process of this Court. It is dismissed with costs quantified at Rs.1,00,000/ (Rupees One lakh). Costs be paid to the assessee within 4(four) weeks from today.”

However, later, based on the assurance of the department that hereafter judicial orders and directions would be abided by in all matters, the order on levy of costs was recalled. The Court made it clear that appropriate averments have to be made in the memo of Appeal as to whether the orders of the Tribunal for prior assessment years and in the case of very assessee have been either challenged or otherwise. If the challenge is pending even that statement has to be made and if it is decided, the outcome thereof has to be indicated.

Note: The CBDT’s detailed Instruction No. 7 /2011 dated 24.5.2011 covers all these aspects. Practice Note No. 7 (pdf) issued by the Bombay High Court also covers these aspects. See also Kirloskar Oil Engines where the department was given a “last opportunity” and warned of “heavy costs” for wasting judicial time
One comment on “CIT vs. Kisan Ratilal Choksey Share & Securities (Bombay High Court)
  1. vswami says:

    Human memory is, no doubt, as ordained by nature, though not so short or long enough as reasonably expected, cannot rightly be called to defense in any such litigation of this kind. Looking back, anyone can locate any number of such instances where either or both sides/parties, and representing counsels ave been so callous and negligent as to lead to repetitive court battle; more so, even in cases where assessee(s) is one and the same, or are different but there is an earlier court decision cverin the matter on all fours. In the final analysis, such infructuous/unending litigation impacts mainly two things: one, objectionable waste of time and energy of not only the parties in a given case but of the taxpayers community as a whole- loss to the exchequer; and quality of adjudication itself. In one’s longstanding conviction, recurrence of such instances, obtaining almost on an ongoing basis, could be avoided or obviated if everyone concerned, including courts, make it a point to specifically inquire and ascertain, on a case by case basis, the dispute brought up for adjudication is not a ‘covered’ matter (in the sense, no ‘precedent’ within its profound legal meaning).

    Further, only a really serious view and imposition of a heavy penalty , and in case of Revenue, if directed to be personally paid and borne by the erring / responsible officials , could act as a deterrent.

    Over to experts in field practice for sharing any other impartial view, if open.

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