Natural Herbals & Seeds V. Union of India and State of Uttarakhand and Respondent nos. 4, 5 & 6

WPMS/1230/2015

AI Insights

The case involves M/s Natural Herbals & Seeds, the petitioner, who sought a writ of mandamus to correct the name of their village in a government notification to receive income tax exemptions under Section 80 IC of the Income Tax Act, 1961. The village was incorrectly listed as 'Nandpur Ka Ropa' instead of 'Nandpur Narka Topa' in the notification due to a clerical error. Despite the State Government's acknowledgment of the error, the Central Government had not amended the notification. The court found that the mistake was not the petitioner's fault and directed the State Government to rectify the error and resubmit the proposal to the Central Government.

• Counselvise Citation: [2016] 140 COUNSELVISE.COM (IT) 816285 (HC-UTTARAKHAND)
• Appeal Type: Others
• Pronouncement Date: 19-12-2016
• Assessment Year: misc
• Other Referred Cases: Writ Petition (M/B) No.628 of 2005
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: RAKESH THAPLIYAL; P C BISHT; TARUN LAKHERA; H M BHATIA
• Assessee Lawyers: ARVIND VASHISHT; IMRAN KHAN; VIVEK PATHAK
• Keywords: Income tax exemption; Mandamus; Industrialization; Notification correction
• Section: 80-IC

Judgement Text

"IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL Writ Petition No. 1230 of 2015 (M/S) M/s Natural Herbals & Seeds. …..Petitioner Versus Union of India & others. ….Respondents Mr. Arvind Vashisht, Senior Advocate, assisted by Mr. Imran Ali Khan, Advocate, holding brief of Mr. Vivek Pathak, Advocate for the petitioner. Mr. Rakesh Thapliyal, Assistant Solicitor General for Union of India/respondent no. 1. Mr. P.C. Bisht, Standing Counsel and Mr. Tarun Lakhera, Brief Holder for the State of Uttarakhand/respondent nos. 2 & 3. Mr. H.M. Bhatia, Advocate for respondent nos. 4, 5 & 6. Dated: 19th December, 2016 Hon’ble V.K. Bist, J. Petitioner has approached this Court seeking the following relief: “(i) A writ, order or direction in the nature of mandamus directing the respondents to treat the name of Village Nandpur Ka Ropa as occurring in Notification No. 177 of 2004 dated 28th June, 2004 issued by the respondent no 4 (Annexure No. 7 to the writ petition) and or correct the aforesaid as Nandpur Narka Topa instead of Nandpur Ka Ropa and to extend the benefit of income tax exemption to the petitioner’s Unit.” 2. The case of the petitioner is that, after formation of the State of Uttarakhand, in order to promote industrialization in the State, a Policy was framed by the Central Government, under which various industries situated in notified Khasra numbers of notified villages, 2 were granted Central Excise and Income Tax benefits. The benefits of tax holiday under Section 80 IC of the Income Tax Act, 1961 were available to the units situated in the notified Khasra numbers of notified villages on the establishment of new industry or on extension of installed capacity, as specified in the section. The petitioner’s manufacturing unit is situated in Khasra numbers 3/3/3 and 3/3/1 in village Nandpur Narka Topa, Tehsil Bazpur, District Udham Singh Nagar in the leased premises owned by M/s Continental Seeds and Chemicals Ltd. It is the case of the petitioner that proposal for industrialization of villages and some of their khasra numbers in Tehsil Bazpur, District Udham Singh Nagar was forwarded under the signatures of Tehsildar, Bazpur, General Manager District Industry Centre, Udham Singh Nagar and District Magistrate, Udham Singh Nagar to the State of Uttarakhand. Later on, the State Government recommended the aforesaid identified villages and khasra numbers to the Central Government for grant of Central Excise and Income Tax exemptions as per its policy. The name of village “Nandpur Narka Topa” was included in this proposal. However, the name of village “Nandpur Narka Topa” was erroneously written as “Nandpur Narka Ropa” due to some typing or clerical mistake. It is also the case of the petitioner that name of village “Nandpur Narka Ropa”, as erroneously mentioned in the proposal forwarded by the District Magistrate, Udham Singh Nagar, is the distorted version of its actual name “Nandpur Narka Topa”. It is further case of the petitioner that, in the Notification dated 28th June, 2004 at Serial No. 96 under Bajpur Tehsil of Udham Singh Nagar, village “Nandpur Ka Ropa” has also 3 been notified; whereas, no village of this name and style exist in Tehsil Bazpur, nor name of any such village can be found in the list of villages recognized for industrialization and forwarded by the District Magistrate, Udham Singh Nagar to the State Government. Thereafter, petitioner submitted the representation and Halka Patwari, namely, Mr. Lawkesh Kumar Sharma submitted a report, certifying, in writing, that there is no village in Tehsil Bazpur in the name and style of “Nandpur Ka Ropa” and, due to typing mistake, village “Nandpur Narka Topa” has erroneously been mentioned as “Nandpur Ka Ropa” in the CBDT notification. The said report was countersigned by the Tehsildar, Bajpur. Thereafter, the petitioner applied for the benefit of income tax exemption under notification; but, the same was denied to it, due to incorrect name of the village. It is the contention of the learned Senior Advocate for the petitioner that there is no fault of the petitioner and wrong name of the petitioner’s village has been mentioned in the said notification. He submitted that the State Government should have, in fact, sent the proposal for correction of the name of the petitioner’s village and the said notification should have been corrected accordingly. 3. When the matter was listed on 04.06.2015, this Court passed the following order: “Mr. Arvind Vashistha, learned Senior Counsel appearing for the petitioner, submits that correct name of village is “Nandpur Narka Topa”, which was wrongly mentioned in the Notification dated 28.06.2004 as “Nandpur Ka Ropa”. 4 Further contends that there is no village in the name and style of “Nandpur Ka Ropa”. Mr. Rakesh Thapliyal, learned Asst. Solicitor General of India appearing for respondent no. 1, submits that in the Notification dated 28.06.2004, names of the villages were recommended by the State Government; if the State Government says that correct name of village is “Nandpur Narka Topa” instead of “Nandpur Ka Ropa”, appropriate decision correcting the name of the village can be taken. Mr. R.C. Arya, learned Standing Counsel appearing for respondent nos. 2 & 3, shall file specific affidavits of respondent nos. 2 & 3 within two weeks stating therein as to whether the name of the village is “Nandpur Narka Topa” or the name of village is “Nandpur Ka Ropa”. They will further clarify as to whether there is any village in the name and style of “Nandpur Ka Ropa” in Tehsil Bajpur, District Udham Singh Nagar. Along with the affidavit, copy of the recommendation made by the State Government shall also be annexed.” 4. In compliance of the order dated 04.06.2015, the Principal Secretary, Micro, Small & Medium Enterprises, Government of Uttarakhand filed the counter affidavit. In the counter affidavit, it is submitted that, at Tehsil Bazpur, there is no village in the name of Village Nandpur Narka Ropa and, in fact, the correct name of village is Village Nandpur Narka Topa, which falls under Tehsil Bazpur. In the counter affidavit, it is, inter alia, stated as follows: “7. That in reply to the contents of para 6 & 7 of the writ petition it is submitted that at Tehsil Bazpur no village in the name of Village Nandpur Narka Ropa in fact the correct name of village is Village Nandpur 5 Narka Topa, which falls under Tehsil Bazpur. Copy of the report of Tehsildar, Bajpur is being filed herewith and marked as Annexure CA-2 to this affidavit. 8. That the contents of para 8 & 9 of the writ petition call for no comment. However, it is submitted that any Khasra no.72/1, 2 Mi, 3Mi of village Nandpur Narka Topa has been included in the notification. 9. That in reply to the contents of para 10 & 11 of the writ petition it is submitted that at Tehsil Bazpur no village in the name of Village Nandpur Narka Ropa in fact the correct name of village is Village Nandpur Narka Topa, which falls under Tehsil Bazpur. 12. That in reply to the contents of para 16 of the writ petition it is submitted that the unit of the petitioner is situated at Revenue Village “Nandpur Narka Topa” at Tehsil Bazpur. It is submitted that there is no village in the name of Village Nandpur Narka Ropa in Tehsil Bazpur.” 5. Mr. Rakesh Thapliyal, learned Assistant Solicitor General for Union of India would submit that, in the order dated 04.06.2015, the Court has directed the State Government to file an affidavit alongwith the recommendation made by the State Government; but, in fact, no such recommendation was sent by the State Government, therefore, there is no question of amendment in the notification. He submitted that there is no averment in this regard that any proposal was sent to the Central Government. He relied on paragraph no. 4 of judgment passed by the Division Bench of this Court in Writ Petition (M/B) No.628 of 2005, wherein the Court has held that the Court cannot issue mandamus asking the Central 6 Government to amend its notification and such direction would be doing something, which the Court is not competent to do. He submitted that, in view of the judgment of Division Bench, no order should be passed in favour of the petitioner. 6. Mr. H.M. Bhatia, Advocate appearing for the Income Tax submitted that since the name of the petitioner’s village was not mentioned in the said notification, therefore, the petitioner was not granted benefit of the said notification. He further submitted that the petitioner has approached this Court only after assessment order was passed, therefore, the benefit of income tax exemption cannot be granted to the petitioner’s Unit. 7. I have considered the submission advanced by the learned counsel for the parties and have perused the papers available on record. So far objection raised by the learned Assistant Solicitor General that the Court cannot issue any direction to the Central Government to amend its notification is concerned, I am also of the firm view that no such direction can be issued to the Central Government to amend its notification. First of all, I would like to refer to paragraph nos. 4 & 5 of the judgment passed by the Division Bench of this Court in Writ Petition (M/B) No.628 of 2005, which read as under: “4. Assuming, as has been canvassed before us, that the State of Uttarakhand at the time of furnishing particulars to denote the subject industrial estates, by mistake omitted to include Khasra Nos. 60 (d) and 7 61 and later on realizing the said mistake, wanted to incorporate the same in the notification dated 10th June 2003, but the fact remains that the request of the State Government has not been acceded to by the Central Government and, accordingly, the same has not been incorporated in Annexure – II to the notification dated 10th June 2003. It is not the contention of the Central Government that it made a mistake. As would be evident from the judgment of this Court dated 3rd March 2005, the Central Government, though may have had conceded that there had been mistake on the part of the State Government, but, nevertheless, it never contended that there was any mistake on its part in the matter of making the notification dated 10th June 2003. Therefore, even if on the basis of mistake committed by the State Government the notification dated 10th June 2003 had been made by the Central Government, the question is, can the writ Court rectify the said mistake and, if the writ Court rectifies the same, what would be the effect thereof? If a mandamus is issued to incorporate those two Khasra numbers in the notification dated 10th June 2003, the same would tantamount to expansion of the policy, which the writ Court cannot do. The effect of such direction would be doing something which the Court is not competent to do. In the circumstances, we are constrained to hold that, although it appears to us that Khasra Nos. 60 (d) and 61 were not incorporated in Annexure – II to the notification dated 10th June 2003 for the blunder on the part of the State in furnishing appropriate information to the Union of India, but we are incompetent to incorporate the same in the said notification, particularly, in view of the fact that when the said mistake was pointed out, the Central Government agreed to give advantage to new industrial units situated 8 on the said Khasra numbers by incorporating Annexure – III to the notification dated 10th June 2003 by the amendment effected on 19th May 2005 and, accordingly, the same should be deemed to be a conscious decision of the Central Government and, in as much as the same pertains to a policy decision, the scope of intervention by the judiciary in that regard is absolutely limited. Apart from contending that the action complained of is discriminatory in nature, nothing else has been highlighted in the petition, on the basis whereof the said action can be called in question. In so far as discrimination is concerned, the policy granted benefit to industries situated at one place, but refused to give benefit to industries situated at other places. The policy itself discriminated one industry from another only on the basis of their location. Therefore, on the ground of discrimination, as such, there is no scope of interference in the matter. 5. We, accordingly, close the matter, but, however, before doing so, having noted the judgment of this Court dated 3rd March 2005, which has reached finality, we are of the view that the petitioner was entitled to know from the Central Government of the result of the consideration by the Central Government of the representation of the petitioner made pursuant to the said order of this Court and the same, having not yet been received, we ask the Central Government to make the same available to the petitioner within a period of six weeks from the date of service of a copy of this order upon Revenue Secretary, Government of India. We make it absolutely clear that, although there are pleadings to the effect that the petitioner has made substantial expansion in terms of the policy in question, but we have not gone into that aspect of the matter.” 9 8. From the bare perusal, it reveals that the facts of the instant case and the facts of Writ Petition (M/B) No.628 of 2005 are slightly different. In that case, a request was made by the State Government for addition of Khasra no. 60 and 61; but, request of State Government was not acceded to by the Central Government. In the case in hand, there is nothing on record to show that any such request was made and was rejected by the Central Government. It appears that, due to some mistake committed by someone in the district level itself at the time of sending of the proposal, the name of village, within which petitioner’s Unit is situated, was not mentioned correctly and incorrect name was mentioned and, due to this reason, the petitioner’s Unit could not get the benefit of that notification. The question is whether any injustice, which is caused to the party by some wrong action of the government official, should be permitted to continue on the technical ground? My answer to this query is no. The law is made to give justice to all. In my view, this Court, under Article 226 of the Constitution of India, can pass appropriate order for giving justice to the aggrieved party. The Principal Secretary Micro, Small & Medium Enterprises, Government of Uttarakhand, in her counter affidavit, has, in clear words, written that the actual name of the village is “Village Nandpur Narka Topa” and there is no village in the name of “Village Nandpur Narka Ropa” in Tehsil Bazpur. The mistake was certainly committed by some official working in the revenue department of district Udham Singh Nagar. The petitioner cannot be held responsible for that mistake. Considering all the those facts mentioned herein above and also considering the 10 statement given by the learned Assistant Solicitor General for Union of India on 04.06.2015 that appropriate decision correcting name of the village can be taken, the writ petition is disposed in the following manner: (i) Petitioner is directed to serve a certified copy of this judgment on the Principal Secretary, Micro, Small & Medium Enterprises, Government of Uttarakhand within a period of two weeks from today. (ii) Thereafter, the State Government will again verify the facts about the name of the village on the basis of the revenue records and, if it is found that the name has wrongly been mentioned at the time of proposal/recommendation, the State Government shall send a fresh proposal/ recommendation to the Central Government for making correction of name in the notification. Such proposal/ recommendation shall be sent within a period of two weeks’ from the date of production of a certified copy of this judgment. (iii) In case such proposal/ recommendation is sent, the Central Government is requested to take decision on the same within a period of two months thereafter. (iv) After taking decision on such proposal/recommendation, the Central Government shall inform its decision to the State Government, Income Tax Department and also to the petitioner at the address given by him in the writ petition. (v) The State Government is also directed to take action against the person, who is responsible for the mistake committed in 11 sending wrong name of the village of the petitioner at the time of sending of proposal/recommendation. (V.K. Bist, J.) 19.12.2016 Arpan "