JOSHI TECHNOLOGIES INTERNATIONAL INC. versus UNION OF INDIA & ORS.

Citation: [2015] 6 S.C.R. 1042 · Decided: 14-05-2015 · Supreme Court of India · Bench: A.K. SIKRI · Disposal: Dismissed

Cited by 6 judgment(s) · cites 2 · see the full citation network in Lexace

Judgment (excerpt)

[2015) 6 S.C.R. 1042 
A 
JOSHI TECHNOLOGIES INTERNATIONAL INC. 
B 
c 
v. 
UNION OF INDIA & ORS. 
(Civil Appeal No. 6929 of 2012) 
MAY 14, 2015 
[A. K. SIKRI AND R. F. NARIMAN, JJ] 
Income Tax Act, 1961: 
s.42 - Deduction - If Production Sharing Contract 
(PSC) between the government and the assessee does not 
contain any stipulation providing for allowance uls.42 then 
assessee is not entitled to benefit under the said section -
0 
By virtue of this section, it is the PSC which governs the 
field, as without it, such deductions are not permissible under 
the Act - When benefit of deduction u/s.42 was wrongly 
granted in initial years of commencement of commercial 
production in the oil fields, it would not amount to a wrong 
E act on part of income tax authorities and would not enure to 
the benefit of assessee in subsequent assessment years. 
s.42 -
Whether Model Production Sharing Contract 
(MPSC) can be read as part of and incorporated in the PSCs 
F - Held: It is not permissible for assessee to take aid of MPSC 
or the clauses contained therein while construing the terms 
of PSCs. 
s.42 - Whether there was any intention between the 
contracting parties, namely, the MoPNG and the appellant 
G for giving benefit of deductions u/s. 42 of the Act - Held: In 
the instant case, PSC between the parties categorically 
provided that the contract shall not be amended, modified 
varied or supplemented in any respect except by an 
H instrument in writing signed by all parties, which shall state 
1042 
JOSHI TECHNOLOGIES INTERNATIONAL INC. v. 
1043 
UNION OF INDIA & ORS. 
the date upon which the amendment or modification shall A 
become effective - MoPNG had requested MoF to give its 
nod for amending the contract by incorporating provision of 
s.42 which was allegedly left out inadvertently - However, 
no authorisation came from MoF - Therefore, question of 
any intention to give benefit of deduction uls.42 between 
B 
the parties would not arise. 
s.42 - Non-inclusion of provision in the contract -
Held: Cannot be treated. as accidental and intentional 
omission - A contracting party cannot claim to be oblivious C 
of the provisions of the law or the contents of the contract at 
the time of signing. 
s.42- Non-inclusion of provision of s. 42 in the contract 
- Whether mandamus can be issued by the Court to the o 
parties to amend the contract and incorporate provisions to 
this effect - On the facts of the present case, it is not a fit 
case where the High Court should have exercised 
discretionary jurisdiction u/Article 226 of the Constitution -
First, the matter is in the realm of pure contract - It is, not a E 
case where any statutory contract is awarded- The contract 
in question was signed after the approval of Cabinet was 
obtained- In the said contract, there was no clause pertaining 
to s.42 of the Act - The appellant is presumed to have 
knowledge of the legal provision, namely, in the absence of F 
such a clause, special allowances uls.42 would be 
impermissible - Still it signed the contract without such a 
clause, with open eyes - No doubt, the appellant claimed 
these deductions in its income tax returns which were allowed 
by the Income Tax Authorities - Further, no doubt, on this G 
premise, it shared the profits with the Government as well -
However, this conduct of the appellant or even the 
respondents, was outside the scope of the contract and that 
by itself may not give any right to the appellant to claim a H 
1044 
SUPREME COURT REPORTS 
[2015) 6 S.C.R. 
A 
relief in the nature of Mandamus to direct the Government 
to incorporate such a clause in the contract, in the face of 
the specific provisions in the contract to the contrary as noted 
above, particularly, Article 32 thereof - It was purely a 
contractual matter with no element of public law involved 
B thereunder. 
Constitution of India, 1950: 
Art.226- Writ jurisdiction - Contractual obligation -
c Contracts entered into by State/Public Authority with private 
parties - Legal position in different situations relating to such 
contracts - Enumerated. 
Art.226 - Invocation of - Held: In pure contractual 
0 
matters extraordinary remedy of writ under Article 226 or 
Article 32 of the Constitution cannot be invoked - However. 
in a limited sphere such remedies are available only when 
the non-Government contracting party is able to demonstrate 
that its a public law remedy which such party seeks to invoke, 
E in contradistinction to the private law

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