INDUSTRIAL INFRASTRUCTURE DEVELOPMENT CORPORATION (GWALIOR) M.P. LTD. versus COMMISSIONER OF INCOME TAX, GWALIOR

Citation: [2018] 10 S.C.R. 481 · Decided: 16-02-2018 · Supreme Court of India · Bench: R.K. AGRAWAL · Disposal: Appeal(s) allowed

Cited by 3 judgment(s) · cites 3 · see the full citation network in Lexace

Judgment (excerpt)

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INDUSTRIAL INFRASTRUCTURE DEVELOPMENT
CORPORATION (GWALIOR) M.P. LTD.
v.
COMMISSIONER OF INCOME TAX, GWALIOR
(Civil Appeal No. 6262 of 2010)
FEBRUARY 16, 2018
[R. K. AGRAWAL AND ABHAY MANOHAR SAPRE, JJ.]
Income Tax Act, 1961 – s.12-A and s.12-AA(3) – Cancellation
of registration certificate under the Act by CIT – Power of –
Appellant-company filed application u/s.12-A to the Commissioner
of Income Tax (CIT) for grant of registration – Registration
certificate was granted by the CIT vide order dated 13.04.1999 –
However, on 27.11.2000 the CIT issued show cause notice to cancel/
withdraw the registration certificate granted – Thereafter, CIT
cancelled/withdrew the certificate vide order dated 29.04.2002 –
Appellant filed rectification application and contended that the CIT
had no power to cancel/recall the certificate – CIT held order of
cancellation as legal and proper – Aggrieved, appellant filed appeal
before Income Tax Appellate Tribunal (ITAT), which set aside the
order of the CIT – However, High Court set aside the order of ITAT
and restored the order of the CIT and held that since there is no
express power in the Act for cancelling the registration certificate
u/s.12-A and hence power to cancel can be traced from s.21 of the
General Clauses Act to support such order – Propriety of – Held:
Not proper – There was no express provision in the Act vesting the
CIT with the power to cancel the registration certificate granted
u/s.12-A and such power of cancellation could be exercised by the
CIT only on and after 01.10.2004 vide s.12AA(3) by Finance (No.2)
Act 2004 – Order passed u/s.12-A by the CIT is a quasi judicial
order and being quasi judicial in nature, it could be withdrawn/
recalled by the CIT only when there was express power vested in
him under the Act to do so – In instant case, there was no such
express power –  An order of the CIT passed u/s.12-A does not fall
in the category of “orders” mentioned in s.21 of the General Clauses
Act – The expression “order” employed in s.21 would show that
such “order” must be in the nature of a “notification”, “rules” and
[2018] 10 S.C.R. 481
                                                     481
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482
SUPREME COURT REPORTS
[2018] 10 S.C.R.
“bye laws” – The order, which can be modified or rescinded by
applying s.21 of the General Clauses Act, has to be either executive
or legislative in nature whereas the order, which the CIT is required
to pass u/s.12-A , is neither legislative nor an executive order but it
is a quasi judicial order – It is for this reason, s.21 has no
application in instant case – Order of the ITAT restored – General
Clauses Act – s.21 – Finance (No-2) Act 2004.
Allowing the appeal, the Court
HELD: 1. The CIT had no express power of cancellation of
the registration certificate once granted by him to the assessee
under Section 12A of the Income Tax Act, 1961 till 01.10.2004.
It is for the reasons that, first, there was no express provision in
the Act vesting the CIT with the power to cancel the registration
certificate granted under Section 12A of the Act. Second, the order
passed under Section 12A by the CIT is a quasi judicial order
and being quasi judicial in nature, it could be withdrawn/recalled
by the CIT only when there was express power vested in him
under the Act to do so.  In this case there was no such express
power. Indeed, the functions exercisable by the CIT under Section
12A are neither legislative and nor executive but as mentioned
above they are essentially quasi judicial in nature. [Paras 21 and
22] [487-C-D]
2. Third, an order of the CIT passed under Section 12A
does not fall in the category of “orders” mentioned in Section 21
of the General Clauses Act. The expression “order” employed
in Section 21 would show that such “order” must be in the nature
of a “notification”, “rules” and  “bye laws” etc. In other words,
the order, which can be modified or rescinded by applying  Section
21, has to be either executive or legislative in nature whereas
the order, which the CIT is required to pass under Section 12A
of the Act, is neither  legislative nor an executive order but it is
a  “quasi judicial order”.  It is for this reason, Section 21 has no
application in this case. [Paras 23 and 24] [487-E-G]
3. The general power, under Section 21 of the General
Clauses Act, to rescind a notification or order has to be
understood in the light of the subject matter, context and the
effect of the relevant provisions of 

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