Income Tax Dept. Failed To Incorporate Revised CPWD Rates As Quantum Of Rent For Building: Calcutta High Court

The Calcutta High Court has held that the income tax department was delaying the matter for a prolonged period and failed to incorporate the revised Central Public Works Department (CPWD) rates as the quantum of rent for the building.

The bench of Chief Justice T.S. Sivagnanam and Justice Hiranmay Bhattacharyya, while dismissing the appeal filed by the department, observed that ultimately a partial reprieve was given to the owners of the building by virtue of the interim order. Considering all these aspects, it is evidently clear that there is no disputed question of fact and all that the hiring department was harping upon with regard to the CPWD rates.

The appeal was filed by the Principal Commissioner of Income Tax, Asansol, challenging the order passed by the Single Bench. By the order, the Single Bench allowed the writ petition and directed the appellant Department to disburse to the writ petitioners the arrears of rent to Rs. 2,84,39,242/- in terms of the respondent CPWD revisions of rent for the period from January 31, 1994, to June 30, 2021, and the payment was directed to be made positively by May 31, 2023. In default, the Income Tax Department was directed to pay to the writ petitioner interest on such an amount from June 1, 2023, at 16% per annum till the date of disbursement.

The Income Tax Department was given liberty to institute a proper civil suit in respect of the money claimed on the alleged municipal tax arrears and repair and maintenance charges, if incurred by the Income Tax Department, from the writ petitioners.

If such a claim is made, the same was directed to be adjudicated in accordance with law by the competent civil court upon following due process of law, and nothing in the order passed in the writ petition shall prejudice the rights of the department in suit if instituted by them within the period of limitation. The Income Tax Department, aggrieved by such directions, has filed the present appeal.

The department contended that Single Bench has virtually passed a money decree, adjudicated disputed questions of fact, and directed the sum of Rs. 2,84,39,242 to be paid to the writ petitioners, being the arrears of rent alleged to be payable to the writ petitioners. It is not maintainable since the matter is purely a contractual relationship between the owner of the building, namely, the writ petitioner, and the appellant department, which had taken the building on rent. It is a contractual dispute purely in the private law realm, and the petition is not maintainable when, admittedly, the contract is a non-statutory contract.

The respondent contended that there was no dispute on facts that were already on record, and the appellant department willfully defaulted to pay the rents revised from time to time as per their CPWD norms and as per the orders and instructions given by the Income Tax Department. The learned Single Bench rightly took note of the factual position that had allowed the writ petition and issued the directions contained therein, and the order does not call for any interference. As far as the maintainability of the writ petition is concerned, it is no doubt true that in a non-statutory contract and when facts are in serious dispute, a writ petition will not be maintainable.

The court found that not only the writ petitioners/owners of the building were unfairly dealt with for all these years, driven from pillar to post, and the department, being the state, ought to have dealt with its citizens/landlord in a better manner. Apart from that, there is no dispute that requires any adjudication in the matter, and therefore the writ petition was maintainable and rightly entertained by the learned Single Bench, and the directions issued are sustainable in law.

Counsel For Appellant: Ashok Chakraborty

Counsel For Respondent: Soumya Majumder

Case Title: Principal Commissioner Of Income Tax, Asansol Versus Sri Manoj Parmar And Others

Case No.: MAT/1394/2023

Click Here To Read The Order