Out-of-Court Settlement Not A Litigant’s Fundamental Right; Can Be Availed Only As Per The Law: Allahabad High Court
The bench was dealing with a rejection order under the Direct Tax Vivaad Se Vishwas Act, 2020
The Allahabad High Court has held that a litigant does not have a fundamental or inherent right to claim settlement of the dispute outside the Court. The right being created by statute must be availed in accordance with it.
The bench comprising Justice Saumitra Dayal Singh and Justice Shiv Shanker Prasad was dealing with a rejection order under the Direct Tax Vivaad Se Vishwas (DTVSV) Act, 2020.
The Court stated, “In the first place, settlement of disputes outside the Courts/judicial process is not a fundamental or inherent right of any litigant. That right was created by the statute i.e. the Act. Being a statutory right, the same may have been availed strictly in accordance with the statutory conditions. Furthermore, as it was a stipulation that the application/declaration may be maintainable only if there was pending litigation between the parties before the cut-off date, it remained from the petitioner to satisfy that condition.”
The issue arose when a demand of Rs.1,71,371 was raised against the petitioner under Section 271 AAB of the Income Tax Act, 1961.
In the first appeal, the amount was partly reduced. However, after a delay of 1261 days, the petitioner filed a second appeal, which was condoned by the tribunal. The appeal remains pending.
Meanwhile, the designated authority rejected the petitioner’s application for amicable settlement under the DTVSV Act, as the second appeal was filed beyond the cut-off period.
The counsel for the petitioner argued that the petitioner did not want to litigate the matter with the authorities. He pointed out that the policy of the Union government was also to prefer settlement over litigation.
On the other hand, the respondent’s counsel cited the judgment of the Supreme Court in the Yashi Constructions v. Union of India case, wherein the petitioner not only failed to file the appeal within the limitation period but also the prescribed cut-off period. He added that no delay condonation application was filed by the petitioner for the authorities to consider condoning the delay.
The judge held that the petitioner did not have a fundamental right to settle the dispute with the government outside the judicial process. Since availing the right of settlement was granted by an Act, it was imperative to fulfill the conditions.
The bench observed that since the petitioner failed to appeal within the prescribed time limit and did not file a delay condonation application before the revenue authorities, “No right vested or accrued to the petitioner to seek a settlement in terms of the conditions prescribed by the Act.”
Thus, while dismissing the writ petition, the Court added that the petitioner’s right to appeal before the tribunal was preserved upon condonation of the 1261 days’ delay. Therefore, he was not at a loss.
The petitioners were represented by advocates Kartikeya Saran, Divyansh Jain, Paritosh Jain, and Ujjawal Satsangi.
ASGI Abrar Ahmad, along with advocates Gaurav Mahajan and Krishna Agarawal appeared for the respondents.