Nine Years of Silence Cannot Be Wiped Away by a Last-Minute Tax Payment: Karnataka High Court Reverses Relief to Infra Company in Income Tax Appeal

“A writ petition is not a tool to reopen time-barred appeals—delay and laches matter, even if the cheque has finally cleared”, In a crucial judgment reaffirming judicial discipline over belated tax litigation, the Karnataka High Court set aside an earlier order passed by a Single Judge that had allowed a 2022 writ petition reviving appeals dismissed by income tax authorities way back in 2010 and 2013.

The Division Bench of Justice V. Kameswar Rao and Justice S. Rachaiah held that the Assessee’s nine-year delay in challenging those orders could not be excused merely because the admitted tax dues were belatedly paid in 2022.

“Such an order, if allowed to stand, shall have precedential value resulting in every assessment order susceptible to be reopened after a long lapse of time, only on the ground that the assessee has decided to pay the tax liability due as per his convenience. That cannot be the intent of the law.”

“Appeals Were Dismissed Twice for Non-Prosecution”—Assessee Had Failed to Appear or Pay Dues Since 2010

The facts date back to assessments for the years 2004–05 to 2007–08, during which the first appellate authority rejected the Assessee’s challenge to assessment orders on the ground that tax on returned income had not been paid—violating Section 249(4)(a) of the Income Tax Act.

Even after a brief restoration of the appeal by the ITAT in late 2012, the Assessee failed to appear on 12 February 2013, 13 February 2013, and again on 22 February 2013, when the appeal was dismissed ex parte. The Assessee did not file any appeal under Section 260A, and waited until 2022 to move a writ petition—claiming lack of communication from the Tribunal.

The Bench rejected this explanation:

“There is no justification given for nonappearance on the listed dates. The ground that the respondent came to know about the dismissal only in 2022 cannot be accepted—knowledge after nine years is too late.”

“Writ Jurisdiction Is Not a Rescue Path for Negligence”—Court Rejects Justice-Oriented Reasoning by Single Judge

The Single Judge had previously allowed the writ petition, citing the Assessee’s “bonafide circumstances”, subsequent payment of dues, and the High Court’s ruling in Komalakshi v. DCIT to take a justice-oriented approach.

But the Division Bench decisively ruled that the facts of Komalakshi were inapplicable. In that case, there was no inordinate delay, and the appeal had not lapsed into finality for nine years.

“Komalakshi does not apply here—the respondent allowed final orders to stand unchallenged for nearly a decade. Delay and laches are central to the writ court’s discretion.”

“One Late Letter and a Tax Receipt Do Not Revive Final Orders”—Bench Cautions Against Setting a Dangerous Precedent

The Assessee argued that it had learned of the 2013 dismissal only in March 2022 and received the certified copy on 29 April 2022, after which it immediately filed the writ petition. But the Court found that this explanation lacked diligence or credibility.

“The Respondent has not stated why it failed to ascertain the status of its appeals for nine years. Silence is not a sufficient cause.”

“Discharging tax liability after nine years does not revive the right to file a writ petition.”

This ruling underscores a core tenet of tax and administrative law—that litigants cannot remain inactive for years and then expect courts to set aside final orders merely on post-facto compliance. The judgment strikes a strong blow against misuse of writ jurisdiction in fiscal cases and protects the integrity of the appellate process under the Income Tax Act.

“Delay defeats equity. A writ court cannot be transformed into a forum of limitless second chances.”

Date of decision:  20 May 2025