The DCIT, Circle-3(1), Visakhapatnam v. M/s Jayalakshmi Sea Foods Pvt. Ltd., Visakhapatnam

MA 210/VIZ/2010 | 2001-2002
Pronouncement Date: 22-12-2010 | Result: Allowed

Appeal Details

RSA Number 21025324 RSA 2010
Assessee PAN AABCD0248B
Bench Visakhapatnam
Appeal Number MA 210/VIZ/2010
Duration Of Justice 1 month(s) 9 day(s)
Appellant The DCIT, Circle-3(1), Visakhapatnam
Respondent M/s Jayalakshmi Sea Foods Pvt. Ltd., Visakhapatnam
Appeal Type Miscellaneous Application
Pronouncement Date 22-12-2010
Appeal Filed By Department
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 22-12-2010
Assessment Year 2001-2002
Appeal Filed On 12-11-2010
Judgment Text
MP NO.204 TO 207 203-209 210-212/VIZAG/2010-M/S DEVI FISHERIES LTD VIZAG PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV JUDICIAL MEMBER AND SHRI BR BASKARAN ACCOUNTANT MEMBER MP NO.204 TO 207/VIZAG/2010 (ARISING OUT OF ITA NO. 434 TO 437 /VIZAG/ 20 06) ASSESSMENT YEAR: 2000-01 TO 2002-03 AND 2004-05 DY.COMMISSIONER OF INCOME TAX CIRCLE-3(1) VISAKHAPATNAM. VS. M/S DEVI FISHERIES LTD VISAKHAPATNAM. (APPELLANT) (RESPONDENT) PAN NO:AACD 7852Q MP NO.200 TO 203 & 209/VIZAG/2010 (ARISING OUT OF ITA NOS.430 TO 433/VIZAG/2006) ASSESSMENT YEAR: 2000-01 TO 2002-03 AND 2004-05 DY.COMMISSIONER OF INCOME TAX CIRCLE-3(1) VISAKHAPATNAM. VS. M/S DEVI SEA FOODS LTD VISAKHAPATNAM. (APPELLANT) (RESPONDENT) PAN NO:AABCD 0248B MP NO.210 TO 212/VIZAG/2010 (ARISING OUT OF ITA NO.32 63 & 431VIZAG/2007 ASSESSMENT YEAR: 2001-02 TO 2002-03 AND 2004-05 DY.COMMISSIONER OF INCOME TAX CIRCLE-3(1) VISAKHAPATNAM. VS. M/S JAYALAKSHMI SEA FOODS PVT. LTD. VISAKHAPATNAM. (APPELLANT) (RESPONDENT) PAN NO:AAACS 5628 A APPELLANT BY: SHRI J SIRI KUMAR DR RESPONDENT BY: S/SHRI TVBS KISHORE BABU C.V.S MURTHY & G.V.N. HARI CAS ORDER PER BENCH: THESE MISCELLANEOUS APPLICATIONS HAVE BEEN FILED A T THE INSTANCE OF THE REVENUE SEEKING RECALL OF THE ORDERS PASSED BY THE TRIBUNAL IN THE HANDS OF THE ASSESSEES CITED ABOVE ON THE GROUND TH AT THE DECISION OF SPECIAL BENCH WHICH WAS DIRECTED TO BE FOLLOWED HAS SINCE BEEN MP NO.204 TO 207 203-209 210-212/VIZAG/2010-M/S DEVI FISHERIES LTD VIZAG PAGE 2 OF 5 REVERSED BY THE HON'BLE BOMBAY HIGH COURT. SINCE SIMILAR PETITIONS HAVE BEEN FILED IN ALL THE CASES CITED ABOVE THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. BRIEFLY STATED THE ISSUE URGED IN THE ORIGI NAL APPEALS RELATED TO THE TREATMENT OF PROFIT ON SALE OF DEPB LICENSES. SINCE THE TRIBUNAL IS BOUND BY THE DECISION OF SPECIAL BENCH OF TRIBUNAL IT SET ASIDE THE SAID ISSUE IN ALL THE ABOVE CITED CASES TO THE FILE OF THE RESPECTIVE ASSESSING OFFICERS WITH THE DIRECTION TO RE-ADJUDICATE THE IS SUE IN THE TERMS INDICATED IN THE ORDER OF THE SPECIAL BENCH IN THE CASE OF TOPMAN EXPORTS (ITA NO.5769/MUM/2006; 318 ITR (AT) 87). 3. THE REVENUE CHALLENGED THE ORDER OF THE SPEC IAL BENCH IN THE CASE OF TOPMAN EXPORTS (SUPRA) BEFORE THE HON'BLE BOMB AY HIGH COURT. THE BOMBAY HIGH COURT BY ITS ORDER DATED 28/29 JUN E 2010 IN THE CASE OF CIT VS. KALPATARU COLOURS AND CHEMICALS REVERSE D THE ORDER PASSED BY THE SPECIAL BENCH IN THE CASE OF TOPMAN EXPORTS. HENCE THESE PETITIONS HAVE BEEN FILED BY THE REVENUE SEEKING RE CALL OF THE RESPECTIVE ORDERS PASSED BY THE TRIBUNAL. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMI TTED THAT THERE IS NO NECESSITY TO RECALL AS PRAYED IN THE PETITION BUT APPROPRIATE AMENDMENTS MAY BE CARRIED OUT IN THE IMPUGNED ORDER S OF THE TRIBUNAL. HE SUBMITTED THAT THE ASSESSING OFFICER HAS BEEN DIRECTED TO FOLLOW THE DECISION OF SPECIAL BENCH IN THE CASE OF TOPMAN EXPORTS SUPRA AND SINCE IT HAS BEEN OVERRULED BY THE HON'BL E BOMBAY HIGH COURT IN THE CASE OF KALPATARU CHEMICALS A DIFFICU LTY HAS ARISEN TO THE ASSESSING OFFICER IN COMPLYING WITH THE DIRECTIONS OF THE TRIBUNAL. HE FURTHER SUBMITTED THAT THE DECISION OF HON'BLE BOMB AY HIGH COURT IS THE SOLE DECISION ON THE IMPUGNED ISSUE THE SAME IS BI NDING ON ALL INCLUDING THE TRIBUNAL. ACCORDINGLY HE PRAYED THAT APPROPRIATE AMENDMENTS MAY BE MADE IN THE IMPUGNED ORDERS PASSE D BY THE TRIBUNAL. MP NO.204 TO 207 203-209 210-212/VIZAG/2010-M/S DEVI FISHERIES LTD VIZAG PAGE 3 OF 5 5. HOWEVER THE SUBMISSIONS OF THE LEARNED COUN SEL FOR THE ASSESSEES ARE THAT THE TRIBUNAL HAS PASSED THE IMPU GNED ORDERS ON THE BASIS OF THE DECISION OF THE HIGHER FORUM WHICH WAS BINDING UPON THE TRIBUNAL ON THE MATERIAL DATE; THAT THE TRIBUNAL NE ED NOT AMEND THE ORDERS AS PRAYED BY THE REVENUE; THAT THE ORDER IN THE CASE OF KALPATARU COLOURS AND CHEMICALS RELIED UPON BY THE REVENUE PERTAINS TO THE NON-JURISDICTIONAL HIGH COURT AND IN ANY CASE T HE VIEW EXPRESSED BY THE TRIBUNAL IS ONE OF THE POSSIBLE VIEWS. ACCORDI NGLY IT WAS SUBMITTED THAT THE TRIBUNAL NEED NOT MAKE ANY AMENDMENT AS PR AYED BY THE REVENUE. 6. WE HAVE HEARD THE RIVAL CONTENTIONS. THERE C ANNOT BE ANY DISPUTE THAT THE DECISION OF THE SPECIAL BENCH IN THE CASE OF TOPMAN EXPORTS (SUPRA) WAS BINDING UPON THE TRIBUNAL ON THE DAY WH EN THE IMPUGNED ORDERS WERE PASSED AND HENCE THE TRIBUNAL HAS DIREC TED THE ASSESSING OFFICER TO RE-ADJUDICATE THE ISSUE IN TERMS OF THE DECISION OF SPECIAL BENCH. THERE IS ALSO NO DISPUTE WITH REGARD TO THE FACT THAT THE ORDER OF HON'BLE BOMBAY HIGH COURT HAS BEEN RENDERED SUBS EQUENT TO THE DATE OF IMPUGNED ORDERS OF THE TRIBUNAL. HOWEVER BEFORE GIVING EFFECT TO THE ORDER OF THE TRIBUNAL THE ASSESSING OFFICER HAS NOTICED THAT THE DECISION OF SPECIAL BENCH IN THE CASE OF TOPMAN EXP ORTS HAS SINCE BEEN REVERSED BY THE HON'BLE BOMBAY HIGH COURT AND HE HA S FACED DIFFICULTY IN IMPLEMENTING THE ORDERS OF THE TRIBUNAL. IN VIE W OF THE ABOVE CITED REASONS THE REVENUE HAS MOVED THESE PETITIONS BEFO RE US. 7. THOUGH THE REVENUE HAS PRAYED FOR THE RECALL OF THE IMPUGNED ORDERS AS ADMITTED BY LEARNED D.R THERE IS NO NEC ESSITY TO RECALL THE IMPUGNED ORDERS OF THE TRIBUNAL. WE NOTICE THAT THE PRAYER MADE IN THESE PETITIONS PERTAINS TO THE QUESTION OF THE INT ERPRETATION OF LEGAL PRINCIPLES IN IMPLEMENTING THE ORDER OF THE TRIBUNA L. IT IS A WELL SETTLED PRINCIPLE OF LAW THAT WHEN THE ORDER PASSED BY A LO WER AUTHORITY IS APPROVED OR MODIFIED OR REVERSED BY AN APPELLATE AU THORITY THE ORDER OF LOWER AUTHORITY GETS MERGED WITH THE APPELLATE O RDER AND IT IS THE MP NO.204 TO 207 203-209 210-212/VIZAG/2010-M/S DEVI FISHERIES LTD VIZAG PAGE 4 OF 5 ORDER OF THE APPELLATE AUTHORITY THAT IS EFFECTIVE AND CAN BE ENFORCED IN VIEW OF THE PRINCIPLES OF DOCTINE OF MERGER. THE SAID PRINCIPLE OF DOCTRINE OF MERGER HAS BEEN EXPLAINED BY THE HON' BLE DELHI HIGH COURT IN THE CASE OF CIT VS. TONY ELECTRONICS LTD ( 320 ITR 378). THE RELEVANT OBSERVATIONS ARE EXTRACTED BELOW: THE LEGAL POSITION WITH WHICH THERE CANNOT B E ANY QUARREL IS THAT ONCE AN APPEAL AGAINST THE ORDER PASSED BY AN AUTHORITY IS PREFERRED AND IS DECIDED BY THE APPELLATE AUTH ORITY THE ORDER OF THE SAID AUTHORITY MERGES INTO THE ORDER OF THE APPELLATE AUTHORITY. WITH THIS MERGER THE ORDER OF THE ORIGINAL AUTHORITY CEASES TO EXIST AND THE ORDER OF THE APPELLATE AUTHORITY PREVAILS IN WHICH THE ORDER OF THE ORIGINAL AUTHORITY IS MERGED. FOR ALL INTENTS AND PURPOSES IT IS THE ORDER OF THE APPELLATE AUTHORITY THAT WOULD BE SEEN. THE DOCTRINE OF MERGER HAS BEEN EXPLAINED BY THE CO URTS IN A NUMBER OF JUDGMENTS. OUR PURPOSE WILL SUFFICE BY RE FERRING TO ONE JUDGMENT WHERE THIS DOCTRINE IS EXPLAINED ALONG WITH THE RATIONALE BEHIND IT. IT IS IN THE CASE OF GOJER B ROS. (PVT.) LTD. V. RATAN LAL SINGH [1974] 2 SCC 453 WHICH READS A S UNDER (PAGE 458) : 11. THE JURISTIC JUSTIFICATION OF THE DOCTRI NE OF MERGER MAY BE SOUGHT IN THE PRINCIPLE THAT THERE CANNOT BE AT ONE AND THE SAME TIME MORE THAN ONE OPERATIVE ORDER GOVERNING THE SAME SUBJECT MATTER. THEREFORE THE JUDGMENT OF AN INFERIOR COURT IF SUBJECTED TO AN EXAMINATION BY THE SUPERIOR COURT CEASES TO HAVE EXISTENCE IN THE EYE OF LAW AND IS TREATED AS BEING SUPERSEDED BY THE JUDGMENT OF THE SUPERIOR COURT. IN OTHER WORDS THE JUDGMENT OF THE INFERIOR COURT LOSES ITS IDENTITY BY ITS MERGER WIT H THE JUDGMENT OF THE SUPERIOR COURT. IN ANOTHER CASE OF CIT V. AMRITLAL BHOGILAL A ND CO. [1958] 34 ITR 130 (SC) THE POSITION IN REGARD TO THE DOCTR INE OF MERGER WAS STATED THUS BY GAJENDRAGADKAR J. WHO S POKE FOR THE COURT (PAGE 136) : 16. THERE CAN BE NO DOUBT THAT IF AN A PPEAL IS PROVIDED AGAINST AN ORDER PASSED BY A TRIBUNAL THE DECISION OF THE APPELLATE AUTHORITY IS THE OPERATIV E DECISION IN LAW. IF THE APPELLATE AUTHORITY MODIFIES OR REVERSES THE DECISION OF THE TRIBUNAL IT IS OBVIOUS THAT IT IS THE APPELLATE DECISION THAT IS EFFECTIVE AND CAN BE ENFORCED. IN LAW THE POSITION WOULD BE JUST THE SAME EVEN IF THE APPELLATE DECISION MERELY CONFIRMS THE DECISION OF THE MP NO.204 TO 207 203-209 210-212/VIZAG/2010-M/S DEVI FISHERIES LTD VIZAG PAGE 5 OF 5 TRIBUNAL. AS A RESULT OF THE CONFIRMATION OR AFFIRMANCE OF THE DECISION OF THE TRIBUNAL BY THE APPELLATE AUTHORITY THE ORIGINAL DECISION MERGES IN THE APPELLATE DECISION AND IT IS THE APPELLATE DECISION ALONE WHICH SUBSISTS AND IS OPERATIVE AND CAPABLE OF ENFORCEMENT. 8. IN THE LIGHT OF ABOVE CITED LEGAL PROPOSITIO N THE ORDER OF THE SPECIAL BENCH IN THE CASE OF TOPMAN EXPORTS WHICH HAS BEEN REVERSED BY THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF KAL PATARU COLOURS AND CHEMICALS (SUPRA) LOOSES ITS IDENTITY AND THE SAM E IS MERGED WITH THE SAID DECISION OF HON'BLE BOMBAY HIGH COURT. HENCE IN ORDER TO GIVE EFFECT TO THE ORDER OF THE TRIBUNAL THE ASSESSING OFFICER IS REQUIRED TO FOLLOW THE DECISION OF HON'BLE BOMBAY HIGH COURT CI TED ABOVE. 9. IN THE RESULT ALL THE PETITIONS FILED BY THE REV ENUE ARE ALLOWED. PRONOUNCED IN THE OPEN COURT ON 22 ND DECEMBER 2010. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEM BER PVV/SPS VISAKHAPATNAM DATE: 22-12-2010 COPY TO 1 M/S. DEVI FISHERS LTD. DR NO.7-8-20/1 NEAR RK M ISSION KASTURIBA MARG VISAKHAPATNAM 530 003. 2 M/S DEVI SEA FOODS 9-14-18/1 CBM COMPOUND VISAK HAPATNAM 3 M/S JAYALAKSHMI SEA FOODS PVT. LTD. FLAT NO.6 D .NO.8-3-21(5) DHANISHTA APARTMENTS PEDAWALTAIR VISAKHAPATNAM 4 THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-3 (1) RANGE-3 AAYAKAR BHAVAN DABAGARDENS VISAKHAPATNAM 5 6 THE CIT VISAKHAPATNAM THE CIT(A)-I VISAKHAPATNAM. 7 THE DR ITAT VISAKHAP ATNAM. 8 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM