Nahar Colours & Coating Ltd and Orient Glazes Ltd. V. Union of India and Assistant Commissioner of Income-tax, Circle-2, Udaipur

CW/303/2014

AI Insights

The case involves multiple writ petitions filed by Nahar Colours & Coating Ltd and Orient Glazes Ltd, through their director Rajkumar Surana, challenging the notices issued under Section 147 and 148 of the Income Tax Act, 1961. These notices were based on allegations of undervaluation of goods in excise invoices, discovered during a raid by the Director General of Central Excise Intelligence. The petitions argued that the notices were unjustified as the basis for them had been overturned in a related excise case. The High Court of Rajasthan decided to consolidate the petitions due to the identical nature of the issues involved and ruled in favor of the petitioners, setting aside the notices and any related orders.

• Counselvise Citation: [2018] 140 COUNSELVISE.COM (IT) 819684 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 08-02-2018
• Assessment Year: misc
• Other Referred Cases: Commissioner Central Excise and Service-Tax Ahmedabad Vs. Pravinbhai Narshibhai Patel, Partner
• Laws Referred To: Income Tax Act, 1961, Central Excise Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: K K BISSA; G S CHOUHAN; H G CHANDA
• Assessee Lawyers: M S SINGHVI; ANJAY KOTHARI; HEMANT DUTT; PAWAN GIRDHAR
• Keywords: Central Excise; Income Tax; Quashing of notices; Undervaluation; Writ petition
• Section: 147; 148

Judgement Text

"HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR S.B. Civil Writ Petition No. 14259 / 2016 Nahar Colours & Coating Ltd Through Its Director Rajkumar Surana S/o Late Sh. Bijay Kumar Surana, Aged About 51 Years, G-, 90-93, Udyog Vihar, Sukher, Udaipur ----Petitioner Versus 1. Union of India, Through the Secretary, Ministry of Finance, Department of Revenue, North Block, New Delhi. 2. Assistant Commissioner of Income-tax, Circle-2, Udaipur ----Respondents Connected With S.B. Civil Writ Petition No. 303 / 2014 Nahar Colours & Coating Ltd Through Its Director Rajkumar Surana S/o Late Sh. Bijay Kumar Surana, Aged About 51 Years, G-, 90-93, Udyog Vihar, Sukher, Udaipur. ----Petitioner Versus 1. Union of India, Through the Secretary, Ministry of Finance, Department of Revenue, North Block, New Delhi. 2. Assistant Commissioner of Income-tax, Circle-2, Udaipur. ----Respondents S.B. Civil Writ Petition No. 304 / 2014 M/S. Orient Glazes Ltd., through its Director, Rajkumar Surana S/o Late. Sh. Bijay Kumar Surana, aged about 51 years, G-1, 90-93, Udyog Vihar, Sukher, Udaipur. ----Petitioner Versus 1. Union of India, Through the Secretary, Ministry of Finance, Department of Revenue, North Block, New Delhi. 2. Assistant Commissioner of Income-tax, Circle-2, Udaipur. ----Respondents S.B. Civil Writ Petition No. 2027 / 2015 M/S. Orient Glazes Ltd., through its Director, Rajkumar Surana S/o Late. Sh. Bijay Kumar Surana, aged about 51 years, G-1, 90-93, Udyog Vihar, Sukher, Udaipur. ----Petitioner Versus 1. Union of India, Through the Secretary, Ministry of Finance, Department of Revenue, North Block, New Delhi. (2 of 4) [CW-14259/2016] 2. Assistant Commissioner of Income-tax, Circle-2, Udaipur. ----Respondents S.B. Civil Writ Petition No. 2028 / 2015 Nahar Colours & Coating Ltd Through Its Director Rajkumar Surana S/o Late Sh. Bijay Kumar Surana, Aged About 51 Years, G-, 90-93, Udyog Vihar, Sukher, Udaipur ----Petitioner Versus 1. Union of India, Through the Secretary, Ministry of Finance, Department of Revenue, North Block, New Delhi. 2. Assistant Commissioner of Income-tax, Circle-2, Udaipur ----Respondents S.B. Civil Writ Petition No. 2029 / 2015 Nahar Colours & Coating Ltd Through Its Director Rajkumar Surana S/o Late Sh. Bijay Kumar Surana, Aged About 51 Years, G-, 90-93, Udyog Vihar, Sukher, Udaipur ----Petitioner Versus 1. Union of India, Through the Secretary, Ministry of Finance, Department of Revenue, North Block, New Delhi. 2. Assistant Commissioner of Income-tax, Circle-2, Udaipur ----Respondents S.B. Civil Writ Petition No. 2031 / 2015 M/S. Orient Glazes Ltd., through its Director, Rajkumar Surana S/o Late. Sh. Bijay Kumar Surana, aged about 51 years, G-1, 90-93, Udyog Vihar, Sukher, Udaipur. ----Petitioner Versus 1. Union of India, Through the Secretary, Ministry of Finance, Department of Revenue, North Block, New Delhi. 2. Assistant Commissioner of Income-tax, Circle-2, Udaipur. ----Respondents (3 of 4) [CW-14259/2016] _____________________________________________________ For Petitioner(s) : Mr. M.S. Singhvi, Sr. Advocate assisted by Mr. Anjay Kothari, Hemant Dutt & Pawan Girdhar For Respondent(s) : Mr. K.K. Bissa with Mr. G.S. Chouhan & Mr. H.G. Chanda _____________________________________________________ HON'BLE MS. JUSTICE NIRMALJIT KAUR Order 08/02/2018 All the above mentioned writ petitions shall stand decided by this common order as the issue involved is identical. The above mentioned writ petitions have been filed for setting aside the impugned notices under Section 147 and 148 of the Income Tax Act, 1961 as well as for quashing of the orders rejecting the preliminary objection of the petitioner. The reason for invoking Section 147 and 148 of the Income Tax Act, 1961 is identical in all the cases. It is stated that documentary evidence recovered by the Director General of Central Excise Intelligence, Ahmedabad on 28.08.2010 at the business premises of the petitioner revealed that the rates declared by the assessee Company in their Central Excise invoice were not actual and different value of frit, over and above the declared central excise invoices were being collected in cash and therefore, it needed to verify whether the assessee Company has undervalued the cost of frit of assessee Company in its invoices. During the pendency of the present writ petition, the Customs Excise & Service Tax Appellate Tribunal, West Zonal (4 of 4) [CW-14259/2016] Bench, Ahmedabad vide its detailed order dated 12.05.2015 allowed the appeal filed by the petitioner under Central Excise Act, against the very action initiated by the Director General of Central Excise Intelligence, Ahmedabad. Thus, as on date, the very basis of the said notice does not exist. In fact, the Central Excise Department challenged the order dated 12.05.2015 in the case of another assessee titled as Commissioner Central Excise and Service-Tax Ahmedabad Vs. Pravinbhai Narshibhai Patel, Partner (Tax Appeal No. 733 of 2016 with Tax Appeal No. 734 of 2016) which too was dismissed by the High Court of Gujarat at Ahmedabad vide order dated 07.12.2016. In view of the above, the writ petitions are allowed. The impugned notices issued under Section 147 and 148 of the Income Tax Act, 1961 and other consequential orders arising out of said notice, if any are set aside. However, it is clarified that in case, the order dated 12.05.2015 passed by the Customs Excise & Service Tax Appellate Tribunal, West Zonal Bench, Ahmedabad is set aside in the case of the petitioner by any Court of law in future or in case of any other observation against the petitioner qua the controversy involved, the respondents will be at liberty to take action in accordance with law. (NIRMALJIT KAUR),J. arvind/99-101, 103-106 "