Case Law Details

Case Name : Commissioner of Income Tax Vs M/s.Meghalaya Steels Ltd. (Supreme Court of India)
Appeal Number : Civil Appeal No. 10495 of 2013
Date of Judgement/Order : 05/08/2015
Related Assessment Year :
Courts : Supreme Court of India (978)

Brief of the Case: In the case of CIT vs M/s.Meghalaya Steels Ltd. the Supreme Court held that High Courts being Courts of Record under Article 215 of the Constitution of India, the power of review would in fact inhere in them. Section 260A(7) only states that all the provisions that would apply qua appeals in the Code of Civil Procedure would apply to appeals under Section 260A. That does not in any manner suggest either that the other provisions of the Code of Civil Procedure are necessarily excluded or that the High Court’s inherent jurisdiction is in any manner affected.

Facts of the Case: The Civil Appeal arose out of two judgments delivered by the High Court of judicature at Guwahati. By the first judgment various points on merits were gone into, inter alia, as to whether deductions to be made under Section 80IB of the Income Tax Act, 1961 were allowable on facts and whether transport subsidies were or were not available together with other incentives. Ultimately the High Court the first question so framed in favour of Revenue. The second question was answered in favour of the assessee and the appeal was disposed of in the aforesaid terms.

Against the aforesaid judgment, a Review Petition was filed by the assessee before the very Division Bench. In a long judgment dated 08.04.2013, the Division Bench recalled its earlier order in the following terms:

“In the present case, since this Court did not formulate the substantial questions of law for adjudication before hearing of the appeal on merit, there can be no escape from the conclusion that hearing of the appeal prior to its admission has to be treated as a hearing on the admission of the appeal in order to determine if the substantial questions of law, as contended by the appellants, had or had not arisen and it was only upon having formulated the questions of law, which according to the High Court, were the substantial questions of law for adjudication in the appeal that the appeal could or ought to have been heard.

As the omission, on our part, to formulate the substantial questions of law and, then, invite the parties to have their say in the matter amount to denial of opportunity of effective hearing to the parties concerned, particularly, to the review petitioners, we must have the magnanimity and courage to acknowledge our mistake, recall the judgment and order dated 16.09.2010, and, then, decide the appeal, on merit, after having formulated the substantial questions of law, which this Court may deem necessary for adjudication of the appeal.

Because of what have been discussed and pointed out above, these review petitions succeed. The impugned judgment and order stand accordingly reviewed and recalled.”

The present civil appeal was filed before the Supreme Court.

Contention of the Revenue: Revenue assailed the Division Bench judgment dated 08.04.2013 stating that it was factually incorrect that no substantial questions of law have been framed and that such questions are to be found in the very beginning of the judgment dated 16.09.2010 itself.

It was further argued, referring us to Section 260A (7), that only those provisions of the Civil Procedure Code could be looked into for the purposes of Section 260A as were relevant to the disposal of appeals, and since the review provision contained in the Code of Civil Procedure is not so referred to, the High Court would have no jurisdiction under Section 260A to review such judgment.

Contention of the Assessee: Assessee countered that in point of fact the question as to whether there were substantial questions of law at all had been argued before the Division Bench which Division Bench had in fact reserved order and then gone on to dispose of the appeal on merits without any pronouncement on whether there were substantial questions of law at all. The Division Bench, however, went ahead and by its judgment dated 16.09.2010 referred to two questions and went on to answer them.

Further argued that the High Court being a Court of Record under Art. 215 of the Constitution of India, the power of review would inhere in it as such.

Held by Supreme Court: SC observed that Division Bench felt that it should not have gone into the matter at all given the fact that on an earlier occasion, before 16.09.2010, it had reserved judgment on whether substantial questions of law in fact exist at all or not. This being the case, in a lengthy order the very Division Bench has thought it fit to recall its own earlier judgment. In the circumstances recorded in the impugned judgment dated 08.04.2013 above, SC inclined to interfere with the impugned judgment.

Further, SC accepted the submission of the Assessee that High Courts being Courts of Record under Art. 215 of the Constitution of India, the power of review would in fact inhere in them by quoting a judgment reported in AIR 1963 SC 1909 5 (Shivdeo Singh & Ors. Vs. State of Punjab and Ors.), which held that there is nothing in Article 226 of the Constitution to preclude a High Court from exercising the power of review which inheres in every court of plenary jurisdiction to prevent miscarriage of justice or to correct grave and palpable errors committed by it.

It was held that on a cursory reading of Section 260A (7), the said Section does not purport in any manner to curtail or restrict the application of the provisions of the 6 Code of Civil Procedure. Section 260A(7) only states that all the provisions that would apply qua appeals in the Code of Civil Procedure would apply to appeals under Section 260A. That does not in any manner suggest either that the other provisions of the Code of Civil Procedure are necessarily excluded or that the High Court’s inherent jurisdiction is in any manner affected.

Download Judgment/Order

More Under Income Tax

Posted Under

Category : Income Tax (27008)
Type : Judiciary (11180)

Leave a Reply

Your email address will not be published. Required fields are marked *