IBM INDIA PVT LTD V. THE CHIEF COMMISSIONER

WP/17293/2013

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IBM India Pvt. Ltd. filed a writ petition against the Chief Commissioner of Central Excise and other respondents, seeking a direction to allow the petitioner to exit from the LTU Scheme effective from April 1, 2013, and to transfer pending assessments under various tax acts to the normal jurisdiction. The petitioner had previously opted into the LTU scheme but decided to opt out, citing similar cases where other companies were allowed to transfer their pending assessments upon opting out. The respondents had kept the petitioner's request in abeyance due to an incomplete assessment for the year 2009-2010 and the matter being subjudice. The court found that the respondents had not adequately justified the differential treatment of the petitioner compared to other companies and directed a reconsideration of the petitioner's request.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 732923 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 10-09-2013
• Assessment Year: misc
• Laws Referred To: Articles 226 and 227 of the Constitution of India, Service Tax Regulations (Finance Act, 1994), Income Tax Act, 1961, Right to Information Act, Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: K V ARAVIND
• Assessee Lawyers: UDAY HOLLA
• Keywords: LTU scheme; Opting Out; Right to Information; Transfer of jurisdiction; Pending Assessments
• Section: 127; 226; 227

Judgement Text

" - 1 - IN THE HIGH COURT OF KARNATAKA AT BANGALORE DATED THIS THE 10th DAY OF SEPTEMBER, 2013 BEFORE THE HON’BLE MR.JUSTICE H.BILLAPPA WRIT PETITION No.17293/2013 (T-IT) BETWEEN: IBM India Pvt. Ltd., 12, Subramanya Arcade-1, Bannerghatta Main Road, Bangalore – 560 029. Represented herein its Director Mr.Ravikumar Ramanan. …Petitioner (By Sri.Uday Holla, Sr. Counsel for Sri.T.Suryanarayana, Adv.,) AND: 1. The Chief Commissioner of Central Excise, Large Taxpayers’ Unit Commissionarate, JSS Towers, 100 Feet Ring Road, Banashankari III Stage, Bangalore – 560 085. 2. The Commissioner of Income Tax Large Taxpayers’ Unit Commissionarate, JSS Towers, 100 Feet Ring Road, Banashankari III Stage, Bangalore – 560 085. - 2 - 3. The Commissioner of Central Excise and Service Tax, Large Taxpayers’ Unit Commissionarate, JSS Towers, 100 Feet Ring Road, Banashankari III Stage, Bangalore – 560 085. …Respondents (By Sri.K.V.Aravind, CGSC, for R2) ****** This petition is filed under Articles 226 and 227 of the Constitution of India praying to call for the complete record of the case. This petition coming on for hearing this day, the Court made the following:- O R D E R In this writ petition under Articles 226 and 227 of the Constitution of India, the petitioner has sought for a direction to the respondents to allow the petitioner to exit from the LTU Scheme with effect from 1.4.2013 and to notify to it of the new/regular jurisdiction to which records, pending proceedings under Income Tax Act, Customs Act, Service Tax would be transferred. 2. The petitioner is engaged in the business of installation and supply of computer hardware, development - 3 - and export of computer software and related service. The Central Government introduced LTU scheme. Pursuant to that, the petitioner consented to be administered under such scheme and filed prescribed form on 25.10.2007. Thereafter, the petitioner has been regularly filing its returns under the provisions of Service Tax Regulations (Finance Act, 1994) and Income Tax Act, 1961 and assessed to tax by the officers of the LTU. Thereafter, the petitioner in exercise of its option under the scheme, through letter dated 28.2.2013 vide Annexure ‘E’ intimated the first respondent its intention to opt out of the LTU scheme with effect from 1.4.2013. Subsequently, as per Annexure-F reminder was sent. The Dy. Commissioner (CCO) through communication dated 2/3.4.2013 vide Annexure ‘G’ informed the petitioner that no reasons have been indicated for opting out of LTU and time barring assessment for the year 2009-2010 has not been completed and therefore, the request of the petitioner to exit LTU is kept in abeyance till assessment for the year 2009-10 is completed. Thereafter, as per Annexures H and J the - 4 - petitioner has requested to transfer the pending assessments and other proceedings to the concerned jurisdictional office without further delay. 3. As per Annexure-K, the petitioner has sought for information under the Right to Information Act. In response to that, the Dy. Commissioner & CPIO, C.Ex. & S. Tax, LTU, New Delhi, has issued communication as per Annexure-L stating that M/s.Glaxo Smithkline Asia (P) Limited, M/s.RITES Limited and M/s.Sona Koyo Steering have opted out from LTU jurisdiction and all pending assessment/ proceedings have been transferred from the LTU jurisdiction to the normal jurisdiction. 4. Thereafter, the petitioner has sought for information under RTI Act as per Annexure-M. In response to that, through communication dated 2.7.2013 as per Annexure-N the CPIO, LTU, Bangalore has informed the petitioner that pending assessment/proceedings were transferred from the LTU jurisdiction to the normal - 5 - jurisdiction in respect of the units mentioned in Annexure-N except the petitioner as the matter is subjudice. 5. Thereafter, as per Annexure-P the petitioner has sought for information under RTI Act. In response to that, the Dy. Commissioner, CPIO, Mumbai, has issued communication as per Annexure-Q dated 3.7.2013 informing the petitioner that some companies have opted out of LTU between 3-5 years and within three years and pending assessment/proceedings have been transferred from LTU jurisdiction to the normal jurisdiction. The request of the petitioner is kept in abeyance on the ground that assessment for the year 2009-2010 is not completed and the matter is sub-judice. Therefore, this writ petition. 6. The learned counsel for the petitioner contended that initially the petitioner consented for LTU scheme. Thereafter, through communication dated 28.2.2013 the petitioner informed the 1st respondent that it is opting out of LTU scheme and requested to transfer the relevant records - 6 - relating to IBM to the respective jurisdictional commissioner. Thereafter, reminders have been sent. Inspite of that, the respondents have not considered the request of the petitioner on the ground that the assessment for the year 2009-2010 is not completed. Further he submitted that the petitioner has obtained information under the Right to Information Act. It shows that in similar circumstances, pending assessment/proceedings have been transferred from LTU jurisdiction to the normal jurisdiction. It is only in the case of the petitioner the pending assessment/proceedings have not been transferred on the ground that the assessment for the year 2009-2010 is yet to be completed and the petitioner has approached the court. Therefore, the respondents may be directed to consider the request of the petitioner. He also brought to the notice of the Court the communication dated 19.7.2013. 7. The learned counsel for the respondents submitted that the assessment for the year 2009-10 is not - 7 - completed and therefore, the request of the petitioner has not been considered. He also submitted that the communication dated 19.7.2013 is subject to the result of the writ petition. Further he submitted that the proceedings have been transferred based on the facts and circumstances of each case. He also submitted that the matter requires examination as to whether pending proceedings can be transferred. He therefore submitted that the writ petition may be dismissed. 8. I have carefully considered the submissions made by the learned counsel for the parties. 9. The grievance of the petitioner is that the petitioner has opted out of LTU scheme and the request of the petitioner to transfer the pending assessment and other proceedings has not been considered. In similar circumstances, in many cases, pending assessment/proceedings have been transferred. Vide Annexure-‘E’, the petitioner has requested the first respondent to transfer the relevant records relating to the - 8 - petitioner to the jurisdictional Commissionerates w.e.f. April 1, 2013. Thereafter, reminder has been sent as per Annexure-‘F’. In response to Annexure-‘E’, the respondents have sent Annexure-‘G’ stating that the request of the petitioner to exit LTU scheme is kept in abeyance till the assessment for the year 2009-10 is completed. In response to the request of the petitioner to furnish information under the Right to Information Act, the respondents have furnished information as per Annexures-‘L’, ‘N’ and ‘Q’. They show that in respect of some Companies who have opted out of LTU scheme, pending assessments/proceedings have been transferred from LTU jurisdiction to the normal jurisdiction. Insofar petitioner is concerned, the request is not considered for the reason that the assessment for the year 2009-10 is not completed and the petitioner has approached the court. Keeping in view, Annexures ‘L’ ‘N’ and ‘Q’ which show that pending assessment/proceedings have been transferred from LTU jurisdiction to the normal jurisdiction, it is proper to direct the first respondent to consider the request of the - 9 - petitioner in the light of Annexures –‘L’, ‘N’ and ‘Q’. The learned counsel for the petitioner brought to the notice of the Court the communication dated 19.7.2013 stating that the Chief Commissioner has accepted the application on 9.7.2013. It is subject to the result of the writ petition. 10. Therefore, the first respondent is directed to consider the request of the petitioner vide Annexure ‘E’, keeping in view the communications at Annexures –‘L’, ‘N’ and ‘Q’ and section 127 of the Income Tax Act and instructions if any and pass appropriate orders within three weeks from the date of receipt of a copy of this order. Sd/- JUDGE. Dvr/Bss: "