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1998 Supreme(All) 150
High Court Of Allahabad
R.K. Gulati, M.C. Agarwal, JJ.
Kanpur Income Tax Bar Association, Aykar Bhavan, Civil Lines, Kanpur And Another
Vs.
Union Of India And Others
C.M.W.P. 767 of 1997
Decided on: 11th February, 1998
Advocate Appeared:
S.P. Gupta, S.D. Singh, U.N. Sharma, Bharatji Agarwal
Headnote:
Locus Standi - Public Interest Litigation - Tax Practitioners - Challenge to Clarification on Voluntary Disclosure of Income Scheme - Petitioners Lacking Direct Personal Interest - Not Entitled to Espouse Cause of Clients - Writ Petition Dismissed.
Fact of the Case:
Petitioners, a Kanpur Income Tax Bar Association and a Chartered Accountant, challenged a clarification issued by the Central Board of Direct Taxes (CBDT) regarding the Voluntary Disclosure of Income Scheme (VDIS). The petitioners claimed that the clarification placed an extra burden on declarants to produce credible evidence about the year of acquisition of assets, which was against the earlier clarification that allowed a simple affidavit. They sought various reliefs, including a direction to the Commissioner of Income Tax to accept declarations without requiring such evidence and to extend the last date for submitting declarations.
Finding of the Court:
The court held that the petitioners lacked direct personal interest in the matter and were espousing the cause of their clients. The court observed that the petitioners were tax practitioners who had advised their clients to make declarations under the VDIS and were now attempting to ensure that the advice given by them was legally sustainable. The court further held that the petitioners' claim that they were acting in public interest was not tenable as the petition served the interest of only a small section of the public, namely, tax evaders, and was likely to render disservice to the general public interest.
Issues: 1. Whether the petitioners had locus standi to maintain the writ petition challenging the CBDT's clarification on the VDIS. 2. Whether the petitioners were acting in public interest by filing the writ petition.
Ratio Decidendi: 1. The court held that the petitioners lacked locus standi to maintain the writ petition as they had no direct personal interest in the matter and were espousing the cause of their clients. The court observed that the petitioners were tax practitioners who had advised their clients to make declarations under the VDIS and were now attempting to ensure that the advice given by them was legally sustainable. The court further held that the petitioners' claim that they were acting in public interest was not tenable as the petition served the interest of only a small section of the public, namely, tax evaders, and was likely to render disservice to the general public interest. 2. The court held that the petitioners were not acting in public interest by filing the writ petition as the petition served the interest of only a small section of the public, namely, tax evaders, and was likely to render disservice to the general public interest.
Final Decision: The writ petition was dismissed in limine with no order as to costs.
M.C. Agarwal, J.
1. This is a petition under Article 226 of the Constitution of India preferred by the Kanpur Income Tax Bar Association through its Secretary Naveen Bhargava and Mukesh Srivastava a Chartered Accountant. The petitioners claimed to be legal practitioner in taxation laws and they challenge a clarification contained in paragraph 3 of a letter dated 25.11.1997 issued by Sri A. K. Batabyal, Member (Investigation) Central Board of Direct Taxes. The following reliefs have been claimed in this writ petition :
"(i) issue a writ, direction or order in the nature of certiorari calling for the record of letter/communication dated 25.11.1997 (Annexure-2) and the record of the decision of Government of India, if any, and to quash the same.
(ii) issue of writ, direction or order in the nature of mandamus directing the respondents, not to give effect to the 3rd paragraph of the aforesaid communication/letter dated 25.11.1997 (Annexure-2).
(iii) issue a writ, direction or order in the nature of mandamus restraining the Commissioner of Income Tax. Kanpur {Respondent No. 3) from reopening or reviewing the certificates which have already been granted under the provisions of the Scheme,
(iv) issue a writ, order or direction in the nature of mandamus directing the respondent No. 3 to grant certificates in respect of declarations which have already been submitted to him without taking into account the contents of para 3 of the impugned communication dated 25.11.1997 (Annexure-2),
(v) issue a writ, direction or order, in the nature of mandamus directing the respondents to accept the declarations made as clarified by means of D.O. dated 3.10.1997.
(vi) issue a writ, direction or order in the nature of mandamus extending the last date of submitting the declaration, viz., 31.12.1997 in the event the relief is not granted by this Hon'ble Court on such date and in such time that no time is left to the clients of members of petitioner No. 1 and of petitioner No. 2 to make the declarations under the Scheme which they have been inhibited from doing because of the impugned communication dated 25.11.1997 (Annexure-2).
When the writ petition came up for admission, a preliminary objection was raised about maintainability of this writ petition for the aforesaid reliefs at the instance of the practitioners. We, therefore, heard the learned counsel for the parties on this preliminary question about locus standi of the petitioners.
2. Disturbed by the unabated generation and flow of black money and with a view to bring that money in the mainstream of the economy and raise revenue for the Government, the Government of India introduced a Voluntary Disclosure of Income Scheme (V.D.I.S.) by enacting Sections 62 to 78 in the Finance Act. 1997. Under the Scheme, any person could make a declaration of his income for any year and pay tax at the rate of 35 per cent if it is a company or a firm, and at the rate of 30 per cent if he is a person other than a company or a firm. The declaration has to be made in the prescribed form and the income declared may represent either cash or an asset in any form whatsoever. For explaining the provisions of the Scheme and for clearing doubts raised, the Government issued some circulars. A specific provision has been made in the Scheme in Section 73 that the value of the jewellery or bullion declared under the Scheme shall be taken to be its market value as on the 1st day of April, 1987, where the disclosure is made in respect of an assessment year earlier than assessment year 1987-88 and for the purposes of this Scheme, 'jewellery' shall have the same meaning assigned to it in Explanation 1 to clause (viii) of subsection (1) of Section 5 of the Wealth-tax Act. By a circular dated 3rd October. 1997, it was clarified that disclosure of silver utensils and other articles which are not covered by the definition of jewellery like gold/silver coins, watches can also be made as the law does not prohibit their declaration and that
