The DCIT, Circle-3(1), Visakhapatnam v. M/s Andhra Ferro Alloys Ltd., Visakhapatnam

MA 216/VIZ/2010 | 2004-2005
Pronouncement Date: 25-01-2011 | Result: Allowed

Appeal Details

RSA Number 21625324 RSA 2010
Assessee PAN AACCA4847Q
Bench Visakhapatnam
Appeal Number MA 216/VIZ/2010
Duration Of Justice 2 month(s) 1 day(s)
Appellant The DCIT, Circle-3(1), Visakhapatnam
Respondent M/s Andhra Ferro Alloys Ltd., Visakhapatnam
Appeal Type Miscellaneous Application
Pronouncement Date 25-01-2011
Appeal Filed By Department
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 25-01-2011
Assessment Year 2004-2005
Appeal Filed On 23-11-2010
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.216/VIZAG/2010 (ARISING OUT OF ITA NO. 206 /VIZAG/20 07 ) ASSESSMENT YEAR: 2000-01 TO 2002-03 AND 2004-05 DY.COMMISSIONER OF INCOME TAX CIRCLE-3(1) VISAKHAPATNAM. VS. M/S. ANDHRA FERRO ALLOYS LTD. VISAKHAPATNAM (APPELLANT) (RESPONDENT) PAN NO:AACCA 4847 Q APPELLANT BY: SHRI D.S.SUNDER SINGH SR.DR RESPONDENT BY: S/SHRI C. SUBRAMANYAM CA ORDER PER B.R. BASKARAN ACCOUNTANT MEMBER: THIS MISCELLANEOUS APPLICATION HAS BEEN FILED AT T HE INSTANCE OF THE REVENUE SEEKING RECALL OF THE ORDER DATED 11-11 -2009 PASSED BY THIS BENCH IN THE HANDS OF THE ASSESSEE CITED ABOVE ON THE GROUND THAT THE DECISION OF SPECIAL BENCH WHICH WAS DIRECTED T O BE FOLLOWED HAS SINCE BEEN REVERSED BY THE HON'BLE BOMBAY HIGH COUR T. 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 TO THE FILE OF THE ASSESSING OFFICER WITH A D IRECTION TO RE-ADJUDICATE THE ISSUE IN THE TERMS INDICATED IN THE ORDER OF TH E SPECIAL BENCH IN THE CASE OF TOPMAN EXPORTS (ITA NO.5769/MUM/2006; 318 I TR (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 (145 DTR 193 (BOM)) MP NO.204 TO 207 203-209 210-212/VIZAG/2010-M/S DEVI FISHERIES LTD VIZAG PAGE 2 OF 5 REVERSED THE ORDER PASSED BY THE SPECIAL BENCH IN T HE CASE OF TOPMAN EXPORTS. HENCE THIS PETITION HAS BEEN FILED BY THE REVENUE SEEKING RECALL OF THE ORDER PASSED BY THE TRIBUNAL CITED A BOVE. 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 AND HENCE THE S AID ORDER IS BINDING ON ALL INCLUDING THE TRIBUNAL. ACCORDINGLY HE PRAYED THAT APPROPRIATE AMENDMENTS MAY BE MADE IN THE IMPUGNED ORDERS PASSED BY THE TRIBUNAL. 5. HOWEVER THE SUBMISSIONS OF THE LEARNED COUN SEL FOR THE ASSESSEE ARE THAT THE TRIBUNAL HAS PASSED THE IMPUG NED 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. IN THIS REGARD THE LEARNED DEPARTMENTAL R EPRESENTATIVE RELIED UPON THE ORDER DATED 22-12-2010 PASSED BY TH IS BENCH ON MISCELLANEOUS PETITIONS FILED BY THE DEPARTMENT ON IDENTICAL FACTS IN THE CASE OF M/S DEVI FISHERIES LTD AND OTHERS. MP NO.204 TO 207 203-209 210-212/VIZAG/2010-M/S DEVI FISHERIES LTD VIZAG PAGE 3 OF 5 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 THIS PETITION BEFORE 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 ORDER 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 ORDER OF THE APPELLATE AUTHORITY THAT IS EFFECTIVE AND CAN BE ENFORCED IN VIEW OF THE PRINCIPLES OF DOCTRINE OF MERGER. TH E 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 MP NO.204 TO 207 203-209 210-212/VIZAG/2010-M/S DEVI FISHERIES LTD VIZAG PAGE 4 OF 5 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 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 GETS MERGED WITH THE SAID DECISION OF HON'BLE BOMBAY HIGH COURT. HE NCE IN ORDER TO MP NO.204 TO 207 203-209 210-212/VIZAG/2010-M/S DEVI FISHERIES LTD VIZAG PAGE 5 OF 5 GIVE EFFECT TO THE ORDER OF THE TRIBUNAL THE ASSES SING OFFICER IS REQUIRED TO FOLLOW THE DECISION OF HON'BLE BOMBAY H IGH COURT CITED ABOVE. 9. IN THE RESULT THE PETITION FILED BY THE REVENUE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 25 TH JANUARY 2011. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEM BER PVV/SPS VISAKHAPATNAM DATE: 25-01-2011 COPY TO 1 THE DY.COMMISSIONER OF INCOME TAX CIRCLE-3(1) VISA KHAPATNAM 2 M/S ANDHRA FERRO ALLOYS LTD. C/O C. SUBRAMAYAM CHARTERED ACCOUNTANT 102 LAXMI APARTMENTS FACOR LAY OUT WA LTAIR UPLANDS VISAKHAPATNAM 3 4 THE CIT VISAKHAPATNAM THE CIT(A)-I VISAKHAPATNAM. 5 THE DR ITAT VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM