The CJI said that such delay by the government authorities was not in the interest of investment climate in India and that timely pursuit of a case was an important part of ease of doing business.
Bhavini Mishra New Delhi
The Supreme Court on Wednesday dismissed an appeal by the Income Tax Department against Xerox's Indian subsidiary on the grounds that the application was filed 215 days late.
“How can the Supreme Court tolerate a 215-day delay by the Income Tax Department? What message will it send to foreign investors, like, 'Look, the Supreme Court is tolerating such huge delays'? Sorry, that cannot be done. These companies are working here and they are generating revenue, jobs and the courts are also signalling that there has to be some balance, you understand. Sorry,” said Chief Justice of India (CJI) DY Chandrachud.
The Chief Justice of India (CJI) said that such delay by the government authorities is not in the interest of the investment climate in India and that timely prosecution of a case is crucial for smooth conduct of business.
As per the Limitation Act, the limitation period for an appeal to a higher court is 90 days from the date of the order/directive. For appeals to any other court, the limitation period is 30 days from the date of the order/directive.
Last year, the Bombay High Court observed that governments are the largest litigants. The government is currently working on a national litigation policy to make the government an “efficient” litigant and ensure that it is well represented in court proceedings.
In January 2024, the Supreme Court had expressed its dismay and surprise at the department's four-year delay in filing the appeal. The Supreme Court also said in January that no specific time is prescribed for filing an appeal but it is subject to the principle of “reasonable time” for which, by its nature, there can be no compulsory formula and which is to be determined according to the facts and circumstances of the particular case.
On Wednesday, the Supreme Court considered whether Xerox's marketing expenditure amounted to an international transaction and was taxed accordingly.
The Delhi High Court agreed with the decision of the Income Tax Appellate Tribunal (ITAT) and ruled in favour of Xerox.
“We allow the taxpayer's (Xerox) appeal on this ground and direct that the impairment be recalculated and that the taxpayer be awarded the necessary compensation,” the High Court said in its decision.
Xerox, an American company, was the first manufacturer of xerographic plain paper copiers.
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