M/s ICOMM Tele Limited, Rep by its Director, V. Union of India, rep by its Secretary,

WP/31091/2012

AI Insights

The case involves M/s ICOMM Tele Limited, represented by its Director G. Sree Kumar, challenging an order imposing a consolidated penalty of Rs. 30,00,000 for violations under the Foreign Exchange Regulation Act, 1973 (FERA Act). The penalty was imposed by the Additional Commissioner of Income Tax, with the original order dated 8-9-2004, but was communicated to the petitioner only on 24-7-2012. The petitioner contested the delay and the applicability of the repealed FERA Act, particularly after the enactment of the FEMA Act, which came into force on 1-6-2000, and the specific provisions of Section 49(3) regarding the limitation period for taking cognizance of contraventions under the repealed act. The court, after considering the arguments and the timeline of events, dismissed the writ petition, advising the petitioner to seek relief through the appellate tribunal under the FEMA Act.

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 724279 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 16-10-2012
• Assessment Year: misc
• Laws Referred To: Foreign Exchange Regulation Act, 1973, Foreign Exchange Management Act, 1999
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: PONNAM GOUD; N HARINATH
• Assessee Lawyers: SRINIVAS BODDULURI
• Keywords: Adjudication; FEMA; Foreign Exchange; Limitation Period; Penalty; FERA
• Section: 51; 49(3)

Judgement Text

"THE HONOURABLE SRI JUSTICE GODA RAGHURAM AND THE HONOURABLE SRI JUSTICE M.S.RAMACHANDRA RAO Writ Petition No. 31091 of 2012 Dated: 16-10-2012 Between: M/s ICOMM Tele Limited, rep. by its Director G.Sree Kumar. …Petitioner And Union of India, rep. by its Secretary, Department of Revenue, Ministry of Finance, New Delhi and others. …Respondents. THE HONOURABLE SRI JUSTICE GODA RAGHURAM AND THE HONOURABLE SRI JUSTICE M.S.RAMACHANDRA RAO Writ Petition No. 31091 of 2012 Oral order (Per Hon’ble Sri Justice Goda Raghuram) Heard Sri Srinivas Rao Bodduluri, learned counsel for the petitioner and Sri Ponnam Ashok Goud, learned Assistant Solicitor General for India for respondent No.1 and Sri N.Harinath, learned counsel for respondents 2 and 3. The order (original) dated 8-9-2004 bearing reference No. T4/29- BAN/2002 of the Additional Commissioner of Income Tax imposing a consolidated penalty of Rs.30,00,000/- on the petitioner for violation of provisions of the Foreign Exchange Regulation Act, 1973 (for short ‘the FERA Act’) is challenged in this writ petition on several grounds including that the said order was communicated after an abnormal delay, on 24-7-2012. The challenge is however substantially on the ground that since the FERA Act was repealed with effect from 31-5- 2000 and Section 49(3) of the Foreign Exchange Management Act, 1999 (for short ‘the FEMA Act’) (brought into force with effect from 1-6- 2000) requires cognizance of any contravention under Section 51 of the FERA Act to be taken before expiry of two years from the commencement of THE FEMA Act, 1999; and as no notice of contravention by the petitioner under the provisions of the FERA Act was served on the petitioner prior to service of the impugned order (original) dated 8-9-2004 (on 24-7-2012), the entire proceedings are invalid. The order (original) dated 8-9-2004 however records that as the petitioner obtained Foreign exchange equivalent to Rs.11.91 lakhs, Rs.24.57 lakhs, Rs.49.14 lakhs and Rs.8.67 lakhs on 30-1-1995, 5-6-1995, 30-5-1995 and 5-4-1995 respectively through Indus Ind Bank Ltd. Mumbai for import of goods. However it failed to submit any documentary evidence in support of actual imports and failed to abide by the rules. A memorandum dated 25-5-2002 explaining the nature of violations under FERA Act was consequently issued to the petitioner. The order further records that when the adjudicating proceedings came before the Additional Commissioner of Income Tax, he also issued hearing notice which was however returned un-served with the endorsement “office shifted”. Section 49(3) of the FEMA Act, 1999 reads: 49. Repeal and saving: (1) The Foreign Exchange Regulation Act, 1973 (46 of 1973) is hereby repealed and the Appellate Board constitution under sub-section (1) of section 52 of the said act (hereinafter referred to as the repealed Act) shall stand dissolved. (2) ………. (3) Notwithstanding anything contained in any other law for the time being in force, no court shall take cognizance of an offence under the repealed Act and no adjudicating officer shall take notice of any contravention under section 51 of the repealed Act after the expiry of a period of two years from the date of the commencement of this Act. (4) ………. (5) ………. Prima facie, for being within the bar of limitation qua the provisions of Section 49 of the FEMA Act, what is therefore required is that an adjudicating officer shall take notice of any contravention under Section 51 of the repealed Act only before expiry of a period of two years from the date of commencement of the FEMA Act. The FEMA Act has come into force with effect from 1-6-2002 and since notice of the alleged contravention by the petitioner has been taken on 25-5- 2002 as asserted in the impugned order dated 8-9-2004 the proceedings initiated against the petitioner do not prima facie appear to be barred by the period of limitation specified in Section 49(3) of the Act. In any event we do not wish to record any conclusive decision on this point of the bar of limitation. The order (original) dated 8-9-2004 impugned herein. is admitted to have been served on the petitioner on 24-7-2012. The petitioner has an appellate remedy before the Appellate Tribunal, under Section 19 of the FEMA Act. In the totality of the facts and circumstances, we are of the considered view that the petitioner should be relegated to pursue the appellate remedy. The writ petition is accordingly dismissed with liberty to pursue the available statutory appellate remedies. No costs. _________________________ GODA RAGHURAM, J 16th October, 2012 _______________________________ M.S.RAMACHANDRA RAO, J GRR "