A Bench comprising Chief Justice S A Dharmadhikari and Justice Arul Murugan issued notice on the plea filed by the Revenue Bar Association (RBA) and granted the Centre four weeks to file its counter affidavit. The petitioner has been allowed two weeks thereafter to file a rejoinder. The matter is likely to be heard next on July 21, the report said.
The RBA has challenged amendments relating to transfer pricing proceedings, the Dispute Resolution Panel (DRP) mechanism, assessment timelines, reassessment provisions and validation of tax proceedings.
As per the Bar and Bench report, senior advocate Arvind P Datar, appearing for the RBA, argued that the amendments seek to override judgments delivered by the Madras High Court and other High Courts without removing the basis of those decisions.
He submitted that Parliament cannot nullify judicial rulings merely by inserting a non-obstante clause providing that amended provisions would apply notwithstanding any judgment, decree or order of a court.
Datar further argued that such legislative overruling, without curing the defects identified by courts, would violate the doctrine of separation of powers.
The petition specifically challenges the insertion of Section 92CA(3AA), which relates to references by assessing officers to transfer pricing officers for determining arm’s length prices in international and specified domestic transactions. The amendment has been given retrospective effect from June 1, 2007.
According to the report, the plea also assails amendments to Section 144C governing the DRP process, Sections 153 and 153B dealing with timelines for completion of assessments and reassessments, reassessment provisions under Sections 147 and 147A, and validation provisions under Section 292BA concerning assessment orders and computer-generated document identification numbers.
The RBA has contended that the amendments retrospectively validate tax proceedings and negate the effect of High Court judgments, including in matters that are currently pending before the Supreme Court.
The petition argues that the challenged provisions violate Articles 14, 19, 245 and 265 of the Constitution, as well as the doctrine of separation of powers and the basic structure doctrine, the report added.
Representing the Centre, Additional Solicitor General A.R.L. Sundaresan argued that an association challenging legislation must demonstrate a cause of action and cannot question a law in the abstract.
The petition was filed by advocate Sandeep Bagmar on behalf of the Revenue Bar Association, according to Bar and Bench.
