K.V. Produce and Others vs Commissioner of Income Tax and Another

Chettur Sankaran Nair, J.—The petitioners seek to quash exhibit P-4 order of first respondent-Commissioner of Income Tax, rejecting their request for amnesty. Directions to the respondents to accept a return, filed by the petitioners, dated March 21, 1987, and to withdraw C. C. No. 62 of 1987, on the file of the Additional Chief Judicial Magistrate, Ernakulam, are also sought.

The petitioners returned an income of Rs. 2,64,090 for the assessment year 1983-84. An assessment, exhibit R-2, dated January 7, 1986, was made, rejecting the return filed and adding a suppressed income of Rs. 1,47,888. The petitioners appealed against that order unsuccessfully. The appeal was rejected on September 5, 1986, by exhibit R-2(a). Thereafter, a second appeal was filed before the Income Tax Appellate Tribunal.

While so, the petitioners filed another return dated March 21, 1987, purportedly in terms of exhibit P-l circular dated February 13, 1986, and withdrew the appeal filed by them before the Income Tax Appellate Tribunal.

The petitioners submit that the scheme covers past years also and that they had acted on a promise contained in the circulars. The Revenue cannot go back on the promise or initiate penal proceedings thereafter, state the petitioners. Questions Nos. 9,12,19 & 28 and the answers thereto in exhibit R-2(b) are relied on by the petitioners to contend that the benefits under the scheme are available to them. They submit that the circular has the force of law and thus the penal provisions of the Income Tax Act cannot be invoked against the assessees covered by the scheme. Relying on the decision in Commissioner of Income Tax Vs. Punalur Paper Mills Limited, , counsel for the petitioners would submit that the circular "supplants the law, instead of supplementing it".

According to the respondents, the scheme will not apply to the case of the petitioners as there was no disclosure of income by them. The income assessed under exhibit R-2 was shown by the petitioners as the income disclosed under the scheme. This is nothing but an attempt to get the benefit of amnesty, without qualifying for it, submit respondents. The so-called disclosure was made fourteen months after exhibit R-2 assessment on January 7, 1986, and after the first appeal was rejected. Referring to ground (E) of the writ petition, the respondents submit that even the time for disclosure was over on March 31, 1986, almost a year before the so-called disclosure was made. They submit that a circular, derogatory to the statute or supplanting it, cannot be issued as that will be ultra vires.

The prayer for directing withdrawal of C. C. No. 62 of 1987 cannot be granted. There is no provision in the Code of Criminal Procedure or in any other law for withdrawing a private complaint. May be, there are cases where the court can drop it, as indicated in K. M. Mathew v. State of Kerala [1992] 1 KLT 1. An accused person has no right in him to seek withdrawal of a criminal complaint. For the same reason, a direction cannot be issued to restrain the respondents from proceeding with the criminal complaint. The criminal court is in seisin of the case, and it is upto it to deal with the case in accordance with law. In a situation where facts are in dispute, this court will not invoke its extraordinary jurisdiction under article 226 to adjudicate on disputed questions of fact. As observed by the Supreme Court in The Delhi Development Authority, New Delhi Vs. Lila D. Bhagat and Others, , and Bishambhar Dayal Chandra Mohan and Others Vs. State of Uttar Pradesh and Others, , primarily and properly, it is for the criminal court which has taken cognisance of the complaint to come to appropriate conclusions.

The surviving question is whether the circular, exhibit P-l, governs the case. Counsel for petitioner relied on the decisions in Commissioner of Income Tax Vs. B.M. Edward, India Sea Foods, and Commissioner of Income Tax Vs. Punalur Paper Mills Limited, to contend that circulars have not only the force of law, but also that they "supplant" the law.

Though circulars issued u/s 119 of the Income Tax Act may have the force of law, they may not override the law itself. Concepts like "ultra vires" would come into play if a notification or a rule runs derogatory to the parent law. However, I consider it unnecessary to examine that question for purposes of this case. The basic question is whether the circular governs the case. The petitioners would say it would, and the respondents would say it would not. The amnesty period came to an end on March 31, 1986 ground (E). An assessment had been made prior to that on January 7, 1986, and the so-called revised return was filed only on March 21, 1987, fourteen months after the original return was filed, and twelve months after the expiry of the period of amnesty. That apart, there is no disclosure involved. It was only the income assessed under exhibit R-2 that was "returned" as the revised income. What is in existence and is known is not disclosed or revealed by rewriting it or repeating it, in any sense of the term. The attempt of the petitioners is no more than an adventure, to sail into the harbour of amnesty, away from the troubled waters in which they found themselves. They disclosed nothing and nothing new or different was revealed. Answer to question No. 19 in exhibit R-2(b) states that if the Income Tax Officer had already found material to show that there has been concealment, the question of applying the amnesty scheme does not arise. On the facts and in the circumstances of the case, the scheme does not apply and the contentions in this behalf have only to be rejected.

Original petition is, accordingly, dismissed. No costs.