Nirma Industries Ltd. v. Deputy Commissioner Of Income-Tax

D.A Mehta, J.:— The following two substantial questions of law have been formulated at the time of admission:

“1. What is the effect of dismissal of tax appeal by the High Court holding that no substantial question of law arises?

2. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in holding that while computing deduction under section 80-I of the Income-tax Act, 1961, interest received from trade debtors towards late payment of sales consideration is required to be excluded from the profits of the industrial undertaking as the same cannot be stated to have been derived from the business of the industrial undertaking?”

2. The assessment year is 1992-93 and the relevant previous year is the financial year 1991-92. The assessee, a limited company, claimed deduction under section 80-I of the Income-tax Act, 1961 (the Act) in relation to two units—Vatva unit and Mandali unit. The Assessing Officer held while computing the amount allowable as deduction under section 80-I of the Act that a sum of Rs. 1,25,23,324 being late payment interest received from the debtors in the case of the vatva unit and Rs. 53,67,140 being late payment interest received from the debtors in respect of the Mandali unit had to be excluded from the profits of the industrial undertaking. According to the Assessing Officer, as held in the assessment order for the immediately preceding assessment year, viz., the assessment year 1991-92 late payment interest was received by the assessee due to default of the customers and had nothing to do with industrial activity or the manufacturing activity of the assessee. That it was not an integral part of the profits of the industrial undertaking. The assessee carried the matter in appeal before the Commissioner of Income-tax (Appeals), who followed the appellate order in the assessee's own case for the assessment year 1991-92 and held that the assessee was entitled to include the aforesaid two sums while computing the profits on which relief under section 80-I of the Act is available. The appellate order came to be challenged by the Revenue by way of appeal before the Tribunal. The Tribunal while passing the impugned order dated April 25, 2005, allowed the appeal of the Revenue. When the appeal was heard before the Tribunal on behalf of the assessee, a contention was raised that in the assessee's own case for the assessment years 1990-91 and 1991-92 the fact situation was identical and the Tribunal had held in favour of the assessee; that the Revenue had carried the matter in appeal against the decision of the Tribunal for the said assessment years. However, the High Court admitted the appeal only on one another ground while rejecting the appeal on the ground of availability of relief under sections 80HH and 80-I of the Act on interest received from trade debtors.

3. The Tribunal, after taking note of the aforesaid fact, has recorded the following findings from which question No. 1 arises:

“18.9 The question therefore is what is the effect of dismissal of a tax appeal by the High Court holding that no substantial question of law arises? Section 260A prescribes the provision for an appeal to the High Court. Sub-sections (1) to (5) of section 260A read as under:

‘260A.(1) An appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal, if the High Court is satisfied that the case involves a substantial question of law.

(2) The Chief Commissioner or the Commissioner or an assessee aggrieved by any order passed by the Appellate Tribunal may file an appeal to the High Court and such appeal under this sub-section shall be—

(a) filed within one hundred and twenty days from the date on which the order appealed against is received by the assessee or the Chief Commissioner or Commissioner;…

(c) in the form of a memorandum of appeal precisely stating therein the substantial question of law involved.

(3) Where the High Court is satisfied that a substantial question of law is involved in any case, it shall formulate that question.

(4) The appeal shall be heard only on the question so formulated, and the respondents shall, at the hearing of the appeal, be allowed to argue that the case does not involve such question:

Provided that nothing in this sub-section shall be deemed to take away or abridge the power of the court to hear, for reasons to be recorded, the appeal on any other substantial question of law not formulated by it, if it is satisfied that the case involves such question.

(5) The High Court shall decide the question of law so formulated and deliver such judgment thereon containing the grounds on which such decision is founded and may award such cost as it deems fit.’

From the above, it is clear that under sub-section (1) an appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal, only if the High Court is satisfied that the case involves a substantial question of law. Sub-section (2) of the said section permits a party aggrieved by any order passed by the Appellate Tribunal to file an appeal to the High Court and it has to be in the form of memorandum of appeal to the High Court precisely stating therein the substantial question of law involved. Sub-section (3) provides that where the High Court is satisfied that a substantial question of law is involved in any case, it shall formulate that question and the appeal shall thereafter as provided in sub-section (4) be heard on the question so formulated and at the time of hearing the respondent is also permitted to argue on the appeal that the case does not involve such question without taking away or to abridge the power of the High Court to hear, for reasons to be recorded, the appeal on any other substantial question of law not formulated by it. Sub-section (5) of this section further provides that the High Court shall decide the question of law so formulated and deliver such judgment thereon containing the grounds on which such decision is founded and may award such cost as it deems fit. From these provisions it is clear that an appeal lies to the High Court only where a substantial question of law is involved. In an appeal filed by the party, when the High Court dismisses the same by stating that no substantial question of law arises, it cannot, in our opinion, be said that it was a decision of the High Court on the merits. What the High Court can be said to have observed is that they declined to entertain/admit the appeal in the absence of any substantial question of law, which is prerequisite for assuming the jurisdiction of the High Court, if there is no substantial question of law, in the opinion of the High Court, then by virtue of the provision of sub-section (1) of section 260, there lies no appeal. Therefore, when the High Court dismisses an appeal stating that no substantial question of law arises, it only means that the High Court has declined to entertain/admit the appeal in the absence of any substantial question of law. There is no decision on the merits by the jurisdictional High Court on the issues raised by the parties.”

4. In relation to question No. 2, the Tribunal has primarily placed reliance on the ratio of the apex court decision in the case of Pandian Chemicals Ltd. v. CIT, [2003] 262 ITR 278, which in turn has applied the Privy Council decision in the case of CIT v. Raja Bahadur Kamakhaya Narayan Singh, [1948] 16 ITR 325. In the process, the Tribunal has chosen to follow its own decision in the case of Deputy CIT v. Mira Industries, [2003] 87 ITD 475 (Ahd) by reproducing the relevant extracts from the said order in paragraph No. 18.4 of the impugned order. The sum total of the reasoning of the Tribunal is that…. “The interest is not arising because of manufacturing of detergent powder/cake by the industrial undertaking but because the sale proceeds remained unpaid for a stipulated period….”. That interest cannot be said to be derived from the industrial undertaking.

Contentions:

Question No. 1

5. Mr. S.N Soparkar, the learned senior advocate appearing on behalf of the appellant-assessee, submitted that an appeal is nothing else but a continuation of the original proceedings and when a High Court, after adjudication endorses the view expressed by the Tribunal, the High Court endorses the decision on the issue arising before the Tribunal. That the Tribunal had erred in stating that when the High Court dismisses an appeal holding that no substantial question of law arises, there is no merger of the order of the Tribunal. According to him, the High Court in exercise of its appellate jurisdiction is called upon to decide whether a question proposed in the appeal is a question of fact or a question of law, and at the time of dismissal of the appeal, if the High Court concurs with the view of the Tribunal either on facts, or on law, or on both, the order of the Tribunal merges with the order of the High Court and thereafter it is only the order of the High Court which is effective and operative. In support of the submissions made by him he relied upon the following decisions:

(i) Gojer Bros. (Pvt.) Ltd. v. Ratan Lal Singh (Shri)., (1974) 2 SCC 453 : AIR 1974 SC 1380;

(ii) CIT v. Cadila Chemicals P. Ltd., [1998] 230 ITR 885 (Guj);

(iii) V.M Salgaocar and Bros. P. Ltd. v. CIT, [2000] 243 ITR 383 (SC); (2000) 5 SCC 373.;

(iv) Kunhayammed v. State of Kerala, [2000] 245 ITR 360 (SC); [2000] 119 STC 505 (SC); (2000) 6 SCC 359.

(v) Chandi Prasad v. Jagdish Prasad, (2004) 8 SCC 724.

6. Mr. M.R Bhatt, learned senior standing counsel appearing on behalf of the respondent-Revenue, supported the order of the Tribunal by referring to the provisions of section 260A of the Act with special reference to subsections (1), (3), (4) and (5) of section 260A of the Act. According to him, the said section envisages that in the absence of a substantial question of law, the appeal does not lie; therefore, when the High Court dismisses an appeal it cannot be stated that there is any decision on appeal. In other words, the High Court is not deciding the appeal. He gave an illustration: that the provisions of section 260A of the Act are akin to a gate, only if the gate opens, entry is permissible, i.e, only if an appeal is admitted the court exercises appellate jurisdiction and only then the doctrine of merger would apply. In a case where an appeal is summarily dismissed, the appeal is not entertained. There can be a judgment only after formulation of a substantial question of law and merger can be only when jurisdiction is exercised by the High Court after notice to the either side and full hearing thereafter. He also submitted that the provisions of section 260A(1) of the Act have to be equated with the provisions of article 136 of the Constitution of India. In support of the various propositions he has placed reliance on the following decisions:

(i) Shankar Ramchandra Abhyankar v. Krishnaji Dattatraya Bapat, (1969) 2 SCC 74 : AIR 1970 SC 1;

(ii) V.M Salgaocar and Bros. P. Ltd. v. CIT, [2000] 243 ITR 383 (SC); (2000) 5 SCC 373;

(iii) Kunhayammed v. State of Kerala, [2000] 245 ITR 360 (SC);

(iv) State of Orissa v. Krishna Stores, [1997] 104 STC 594 (SC); (1997) 3 SCC 246 : AIR 1997 SC 871;

(v) Madan Naik v. Mst. Hansubala Devi, (1983) 3 SCC 15 : AIR 1983 SC 676;

(vi) Manicka Poosali v. Anjalai Animal, (2005) 10 SCC 38 : AIR 2005 SC 1777;

(vii) Thiagarajan v. Sri Venugopalaswamy B. Koil, (2004) 5 SCC 762 : AIR 2004 SC 1913;

(viii) S. Shanmugavel Nadar v. State of Tamil Nadu, [2000] 132 STC 284; (2002) 8 SCC 361 : AIR 2002 SC 3484;

(ix) Ratansingh v. Vijaysingh, (2001) 1 SCC 469 : AIR 2001 SC 279;

(x) Amba Bai v. Gopal, (2001) 5 SCC 570 : AIR 2001 SC 2003;

(xi) Rekha Mukherjee v. Ashish Kumar Das, (2004) 1 SCC 483 : AIR 2004 SC 443.

7. In rejoinder Mr. Soparkar submitted that when the High Court dismisses an appeal holding that no substantial question of law arises it does not mean that the High Court has no powers. By way of illustration it was pointed out that in case of a matter where the tax effect is low the High Court may refuse to entertain the appeal, and the impact of such a decision would be that though the High Court exercises appellate jurisdiction, it is limited qua that matter but the order does not operate as a precedent. However, that cannot be the situation when the High Court in exercise of its appellate jurisdiction dismisses an appeal on the ground that no substantial question of law arises, because whether the High Court dismisses the appeal at the stage of admission or after notice of hearing to the other side, the High Court exercises the same jurisdiction and the same powers. That section 260A of the Act cannot be dissected into two parts as the Revenue contends.

Question No. 2

8. On the merits it was submitted by Mr. Soparkar, in relation to question No. 2, that the Tribunal had erred in not following the order in the asses-see's own case for earlier assessment years and for this purpose he placed reliance on the compilation submitted at the time of hearing which consisted of various orders made by this court as well as the Tribunal. He also placed reliance on the Madras High Court decision in the case of Commissioner Of Income-Tax v. Madras Motors Ltd./M.M Forgings Ltd., [2002] 257 ITR 60 as well as the apex court decision in the case of CIT v. Govinda Choudhury and Sons, [1993] 203 ITR 881 to submit that the assessee was entitled to consider the interest receipts towards late payment of sales consideration by the customers as being part and parcel of the profits derived from the industrial undertaking for the purpose of relief under section 80-I of the Act.

9. Mr. Bhatt submitted that the interest receipts had no nexus with the profits derived from the industrial undertaking because the immediate source was non-payment of the sale consideration by the buyer and the immediate source was not the sales. Therefore, interest receipts could not be stated to be derived from the manufacturing activity even though they might be attributable to the manufacturing activity.

Reasons:

Question No. 1

10. In so far as question No. 1 is concerned, before proceeding to discuss the legal position, an incidental question that requires to be addressed is, what is the jurisdiction and what are the powers exercised by the High Court while hearing an appeal under section 260A of the Act. The jurisdiction and powers of the High Court are available in respect of—(i) the original side, (ii) the appellate side (inclusive of revision), and (iii) extraordinary jurisdiction, viz. under articles 226 and 227 of the Constitution of India. Admittedly, while hearing an appeal, even for deciding whether a substantial question of law arises or not from the order of the Tribunal, the High Court does not exercise either original jurisdiction or the jurisdiction to issue writs. On a plain reading of section 260A of the Act, inclusive of sub-sections of the said section, the only jurisdiction, and powers that the High Court can exercise are to hear an appeal. The High Court does not have any powers under the statute to grant any leave as such for filing an appeal. An aggrieved person has the right, statutorily provided, of filing an appeal. The rules framed by this court describe such an appeal as a “tax appeal” to distinguish the same from other appeals, like first appeal and second appeal. In fact, an appeal gets filed with the registry of the High Court as a matter of fact and the person filing the appeal is not required to seek any leave from any authority, much less the High Court, prior to filing of the appeal. It is not as if the Legislature is not aware of such a procedure, i.e, requirement of leave. Under section 149(2) of the Motor Vehicles Act, 1988 (“the M.V Act”) the grounds on which an insurer can take up defence have been specified. Under section 170 of the Motor Vehicles Act the Motor Accident Claims Tribunal is entitled to make a direction that the insurer shall be impleaded as a party to the proceedings and thereupon, without prejudice to the provisions of section 149(2) of the Motor Vehicles Act, the insurer has a right to contest the claim on all or any of the grounds that would be available to the person against whom the claim is made. Section 173 of the Act provides for appeals before the High Court against an award made by the Claims Tribunal. In this context in the case of Sadhana Lodh v. National Insurance Co. Ltd., [2003] 114 Comp Cas 1, 2 (SC); (2003) 3 SCC 524 the apex court has reiterated the position explaining the right of appeal in the following words (page 527):

“4. It is not disputed that under section 173 of the Act, an insurer has right to file an appeal before the High Court on limited grounds available under section 149(2) of the Act. However, in a situation where there is a collusion between the claimant and the insured or the insured does not contest the claim and further, if the Tribunal does not implead the insurance company to contest the claim, in such a situation it is open to an insurer to seek permission of the Tribunal to contest the claim on the ground available to the insured or to a person against whom a claim has been made. If permission is granted and the insurer is allowed to contest the claim on merits, in that case it is open to the insurer to file an appeal against the award of the Tribunal on merits. Thus, in such a situation, the insurer can question the quantum of compensation awarded by the Tribunal.

5. However, learned counsel for the respondent argued that since an insurer has limited grounds available under section 173 of the Act, it is open to an insurer to file a petition under article 226/227 of the Constitution.

6. The right of appeal is a statutory right and where the law provides remedy by filing an appeal on limited grounds, the grounds of challenge cannot be enlarged by filing a petition under article 226/227 of the Constitution on the premises that the insurer has limited grounds available for challenging the award given by the Tribunal. Section 149(2) of the Act limits the insurer to file an appeal on those enumerated grounds and the appeal being a product of the statute, it is not open to an insurer to take any plea other than those provided under section 149(2) of the Act (see National Insurance Co. Ltd. v. Nicolletta Rohtagi, [2002] 112 Comp Cas 257 (SC); (2002) 7 SCC 456; 2002 SCC (Cri) 1788). This being the legal position, the petition filed under article 227 of the Constitution by the insurer was wholly misconceived. Where a statutory right to file an appeal has been provided for, it is not open to the High Court to entertain a petition under article 227 of the Constitution….”

11. The provisions of the Act, with special reference to section 260A of the Act, do not require any such prior permission. Therefore, the only jurisdiction that the High Court exercises is the appellate jurisdiction. Merely because the High Court decides in the first instance, whether or not, a substantial question of law arises from the order of the Tribunal, it cannot be stated that the High Court does not exercise the appellate powers or that no appeal lies, or that there is no decision on appeal, when the High Court dismisses an appeal holding that no substantial question of law arises from the order of the Tribunal. Therefore, it is not possible to bifurcate the jurisdiction or powers available to the High Court while dealing with an appeal under section 260A of the Act as canvassed by the Revenue. The view expressed by the Tribunal that there is no decision on appeal, when the High Court holds that no substantial question of law arises from the order of the Tribunal, when the High Court dismisses an appeal, is not a correct reading of law.

12. Before dealing with the contentions of the parties, it is necessary to have a bird's eye view as to the pronouncements made by the apex court from time to time on the doctrine of merger as well as the powers expressed by the apex court under article 136 of the Constitution of India.

(I) Gojer Bros. (Pvt.) Ltd. v. Ratan Lal Singh (Shri)., (1974) 2 SCC 453 : AIR 1974 SC 1380 (page 1384):

“18. The fundamental reason of the rule that where there has been an appeal, the decree to be executed is the decree of the appellate court is that in such cases the decree of the trial court is merged in the decree of the appellate court. In course of time, this concept which was originally restricted to appellate decrees on the ground that an appeal is a continuation of the suit, came to be gradually extended to other proceedings like revisions and even to proceedings before quasi-judicial and executive authorities.

19. It will now be appropriate to refer to the decisions bearing on the principle of merger.

20. In Commissioner Of Income Tax, Bombay v. Amritlal Bhogilal & Co. and Co., [1958] 34 ITR 130 (SC); AIR 1958 SC 868; [1959] SCR 713, the question which arose for decision was whether the order passed by the Income-tax Officer allowing the registration of a firm merged in the order passed by the Appellate Assistant Commissioner in the appeals filed by the firm against the order of assessment. If it did, the Commissioner of Income-tax could not in the exercise of his revisional powers under section 33B(1) set aside the order of registration passed by the Income-tax Officer. This court held on the merits of the matter that though the appellate order of the Appellate Assistant Commissioner was the only order which was valid and enforceable in law, what merged in the appellate order was the Income-tax Officer's order under appeal and not his order of registration which was not and could not have become the subject-matter of an appeal before the appellate authority. The position in regard to the doctrine of merger was stated thus by Gajendra Gadkar, J. who spoke for the court:

‘There can be no doubt that, if an appeal is provided against an order passed by a Tribunal, the decision of the appellate authority is the operative 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.’

21. Collector of Customs v. East India Commercial Co. Ltd., [1963] 2 SCR 563 : AIR 1963 SC 1124 is a typical example of that class of cases in which prior to the amendment of article 226 of the Constitution by the insertion of clause 1-A, the High Courts were faced with the question whether a writ could issue against an authority whose seat was situated beyond the territorial jurisdiction of the High Court. The respondent filed a writ petition in the Calcutta High Court against the decision of the Central Board of Revenue which had dismissed his appeal. A Full Bench of the High Court held that though it had no jurisdiction to issue a writ against the Central Board of Revenue which was permanently located outside its territorial jurisdiction, the Board having merely dismissed the respondent's appeal against the order passed by the Collector of Customs, the real effective order was that of the Collector whose seat was located within the jurisdiction of the High Court and therefore a writ could issue as against him. After referring to the decisions of the High Courts of Allahabad, Nagpur, Pepsu and Rajasthan which had taken the view that the order of the original authority merges in the appellate order even when the appellate authority dismisses the appeal without any modification of the order appealed against, Wanchoo, J. speaking for the Constitutional Bench observed thus:

‘The question, therefore, turns on whether the order of the original authority becomes merged in the order of the appellate authority even where the appellate authority merely dismisses the appeal without any modification of the order of the original authority. It is obvious that when an appeal is made; the appellate authority can do one of three things, namely, (i) it may reverse the order under appeal, (ii) it may modify that order, and (iii) it may merely dismiss the appeal and thus confirm the order without any modification. It is not disputed that in the first two cases where the order of the original authority is either reversed or modified it is the order of the appellate authority which is the operative order and if the High Court has no jurisdiction to issue a writ to the appellate authority it cannot issue a writ to the original authority…. It seems to us that on principle it is difficult to draw a distinction between the first two kinds of orders passed by the appellate authority and the third kind of order passed by it. In all these three cases after the appellate authority has disposed of the appeal, the operative order is the order of the appellate authority whether it has reversed the original order or modified it or confirmed it.

It is this principle, viz., that the appellate order is the operative order after the appeal is disposed of, which is in our opinion the basis of the rule that the decree of the lower court merges in the decree of the appellate court, and on the same principle it would not be incorrect to say that the order of the original authority is merged in the order of the appellate authority whatsoever its decision—whether of reversal or modification or mere confirmation.’

The decision of the High Court was accordingly set aside by this court….

24. An interesting question arose in Shankar Ramchandra Abhyankar v. Krishnaji Dattatraya Bapat, [1970] 1 SCR 322; (1969) 2 SCC 74 : AIR 1970 SC 1, where after a single judge had dismissed a civil revision application filed by the tenant under section 115 of the Code of Civil Procedure, against a decree passed by the District Court, a Division Bench of the Bombay High Court entertained the tenant's writ petition under articles 226 and 227 of the Constitution against the same decree and allowed it. The Bombay High Court had followed its earlier judgment in Sipahimalani's case, [1956] 58 Bom LR 344 which had taken the view that an order passed by the lower court does not merge in the order passed by the revisional court because whereas a right of appeal is a vested right and an appeal is a continuation or rehearing of the suit, a revision is not a continuation or rehearing of the suit and it is not obligatory upon the revisional court to interfere with the order even if it is improper or illegal. This court disapproved of that view and held following a judgment of the Privy Council in Nagendra Nath Dey v. Suresh Chandra Dey, AIR 1932 PC 165; 59 Ind App. 283 that the revisional jurisdiction is a part and parcel of the appellate jurisdiction of the High Court and therefore the principle of merger would apply to orders passed in exercise of revisional jurisdiction also.

25. In Somnath Sahu v. The State of Orissa, (1969) 3 SCC 384 the principle of merger was extended to an executive order dismissing a Government servant. The appellant in that case was dismissed by an order passed by respondent No. 4, the Indian Aluminium Company Ltd., Calcutta. The appeal filed by the appellant to the State Government was dismissed on January 2, 1962. The appellant thereafter moved the Orissa High Court under article 226 of the Constitution asking that the orders passed by the State Government and respondent No. 4 to be quashed on the ground that no notice was given to him for any misconduct and no inquiry was held by respondent No. 4 into the alleged misconduct before passing the order of dismissal. This court assumed in favour of the appellant that the order passed by respondent No. 4 was illegal but it held that it had merged in the appellate order of the State Government dated January 2, 1962, and unless the order of the State Government was shown to be defective, the appellant would not be entitled to any relief. Speaking on behalf of the court, Ramaswami, J. observed ‘There can be no doubt that if an appeal is provided by a statutory rule against an order passed by a Tribunal the decision of the appellate authority is the operative decision in law if the appellate authority modifies or reverses it. 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 is subsisting and is operative and capable of enforcement.’

26. The learned judge of the High Court has referred to some of these decisions in his judgment but he took the view : ‘I am of opinion that in cases where the appellate court merely dismisses the appeal, the principle of merger have no application in cases of execution of the original decree except as to limitation and will not affect an executable decree passed by an inferior court, in so far as its execution is concerned. The position would be otherwise if the decree is modified or varied by such appellate authority as, in such event, the original decree will be inexecutable.’ This conclusion is clearly opposed to the view taken by this court in the decisions referred to above and the learned judge was in error in making a distinction between an appellate judgment whereby an appeal is dismissed and an appellate judgment modifying or reversing the decree of the lower court. This distinction is unsound and is based on no discernible principle.”

(II) Kunhayammed v. State of Kerala, [2000] 245 ITR 360, 366, 368, 380 (SC); (2000) 6 SCC 359; [2000] 119 STC 505 (SC);

“The doctrine of merger

7. The doctrine of merger is neither a doctrine of constitutional law nor a doctrine statutorily recognised. It is a common law doctrine founded on principles of propriety in the hierarchy of justice delivery system. On more occasions than one this court had an opportunity of dealing with the doctrine of merger. It would be advisable to trace and set out the judicial opinion of this court as it has progressed through the times.

12. The logic underlying the doctrine of merger is that there cannot be more than one decree or operative order governing the same subject-matter at a given point of time. When a decree or order passed by an inferior court, Tribunal or authority was subjected to a remedy available under the law before a superior forum then, though the decree or order under challenge continues to be effective and binding, nevertheless its finality is put in jeopardy. Once the superior court has disposed of the lis before it either way—whether the decree or order under appeal is set aside or modified or simply confirmed, it is the decree or order of the superior court, Tribunal or authority which is the final, binding and operative decree or order wherein merges the decree or order passed by the court, Tribunal or the authority below. However, the doctrine is not of universal or unlimited application. The nature of jurisdiction exercised by the superior forum and the content or subject-matter of challenge laid or which could have been laid shall have to be kept in view.”

“Conclusions

39. We have catalogued and dealt with all the available decisions of this court brought to our notice on the point at issue. It is clear that as amongst the several two-judge Bench decisions there is a conflict of opinion that needs to be set at rest. The source of power conferring binding efficacy on decisions of this court is not uniform in all such decisions. Reference is found having been made to (i) article 141 of the Constitution, (ii) doctrine of merger, (iii) res judicata, and (iv) rule of discipline flowing from this court being the highest court of the land.

40. A petition seeking grant of special leave to appeal may be rejected for several reasons. For example, it may be rejected (i) as barred by time, or (ii) being a defective presentation, (iii) the petitioner having no locus standi to file the petition, (iv) the conduct of the petitioner disentitling him to any indulgence by the court, (v) the question raised by the petitioner for consideration by this court being not fit for consideration or deserving being dealt with by the apex court of the country and so on. The expression often employed by this court while disposing of such petitions are—‘heard and dismissed’, ‘dismissed’, ‘dismissed as barred by time’ and so on. May be that at the admission stage itself the opposite party appears on caveat or on notice and offers contest to the maintainability of the petition. The court may apply its mind to the meritworthiness of the petitioner's prayer seeking leave to file an appeal and having formed an opinion may say ‘dismissed on merits’. Such an order may be passed even ex parte, that is, in the absence of the opposite party. In any case, the dismissal would remain a dismissal by a non-speaking order where no reasons have been assigned and no law has been declared by the Supreme Court. The dismissal is not of the appeal but of the special leave petition. Even if the merits have been gone into, they are the merits of the special leave petition only. In our opinion neither the doctrine of merger nor article 141 of the Constitution is attracted to such an order. Grounds entitling exercise of review jurisdiction conferred by order 47, rule 1, CPC or any other statutory provision or allowing review of an order passed in exercise of writ or supervisory jurisdiction of the High Court (where also the principles underlying or emerging from order 47, rule 1, CPC, act as guidelines) are not necessarily the same on which this court exercises discretion to grant or not to grant special leave to appeal while disposing of a petition for the purpose. Mere rejection of a special leave petition does not take away the jurisdiction of the court, the Tribunal or forum whose order forms the subject-matter of petition for special leave to review its own order if grounds for exercise of review jurisdiction are shown to exist. Where the order rejecting an SLP is a speaking order, that is, where reasons have been assigned by this court for rejecting the petition for special leave and are stated in the order, still the order remains the one rejecting prayer for the grant of leave to appeal. The petitioner has been turned away at the threshold without having been allowed to enter in the appellate jurisdiction of this court. Here also the doctrine of merger would not apply. But the law stated or declared by this court in its order shall attract applicability of article 141 of the Constitution. The reasons assigned by this court in its order expressing its adjudication (expressly or by necessary implication) on point of fact or law shall take away the jurisdiction of any other court, Tribunal or authority to express any opinion in conflict with or in departure from the view taken by this court because permitting it to do so would be subversive of judicial discipline and an affront to the order of this court. However, this would be so not by reference to the doctrine of merger.

41. Once a special leave petition has been granted, the doors for the exercise of appellate jurisdiction of this court have been let open. The order impugned before the Supreme Court becomes an order appealed against. Any order passed thereafter would be an appellate order and would attract the applicability of the doctrine of merger. It would not make a difference whether the order is one of reversal or of modification or of dismissal, affirming the order appealed against. It would also not make any difference if the order is a speaking or non-speaking one. Whenever this court has felt inclined to apply its mind to the merits of the order put in issue before it though it may be inclined to affirm the same, it is customary with this court to grant leave to appeal and thereafter dismiss the appeal itself (and not merely the petition for special leave) though at times the orders granting leave to appeal and dismissing the appeal are contained in the same order and at times the orders are quite brief. Nevertheless, the order shows the exercise of appellate jurisdiction and therein the merits of the order impugned having been subjected to judicial scrutiny of this court.

42. ‘To merge’ means to sink or disappear in something else; to become absorbed or extinguished; to be combined or be swallowed up. Merger in law is defined as the absorption of a thing of lesser importance by a greater, whereby the lesser ceases to exist, but the greater is not increased; an absorption or swallowing up so as to involve a loss of identity and individuality (see Corpus Juris Secundum, Vol. LVII, pages 1067-68).

43. We may look at the issue from another angle. The Supreme Court cannot and does not reverse or modify the decree or order appealed against while deciding a petition for special leave to appeal. What is impugned before the Supreme Court can be reversed or modified only after granting leave to appeal and then assuming appellate jurisdiction over it. If the order impugned before the Supreme Court cannot be reversed or modified at the SLP stage obviously that order cannot also be affirmed at the SLP stage.”

(III) Chandi Prasad v. Jagdish Prasad, (2004) 8 SCC 724:

“10. Where a statutory appeal is provided for, subject, of course to the restrictions which may be imposed, it is a continuation of suit. It is also not in dispute that when a higher forum entertains an appeal and passes an order on merit, the doctrine of merger applies.

23. The doctrine of merger is based on the principles of propriety in the hierarchy of the justice delivery system. The doctrine of merger does not make a distinction between an order of reversal, modification or an order of confirmation passed by the appellate authority. The said doctrine postulates that there cannot be more than one operative decree governing the same subject-matter at a given point of time.

24. It is trite that when an appellate court passes a decree, the decree of the trial court merges with the decree of the appellate court and even if and subject to any modification that may be made in the appellate decree, the decree of the appellate court supersedes the decree of the trial court. In other words, merger of a decree takes place irrespective of the fact as to whether the appellate court affirms, modifies or reverses the decree passed by the trial court. When a special leave petition is dismissed summarily, doctrine of merger does not apply but when an appeal is dismissed, it does (see V.M Salgaocar and Bros. P. Ltd. v. CIT, (2000) 5 SCC 373).”

(IV) V.M Salgaocar and Bros. P. Ltd. v. CIT, [2000] 243 ITR 383, 392 (SC); (2000) 5 SCC 373:

“8. Different considerations apply when a special leave petition under article 136 of the Constitution is simply dismissed by saying ‘dismissed’ and an appeal provided under article 133 is dismissed also with the words ‘the appeal is dismissed’. In the former case it has been laid by this court that when a special leave petition is dismissed, this court does not comment on the correctness or otherwise of the order from which leave to appeal is sought. But what the court means is that it does not consider it to be a fit case for exercise of its jurisdiction under article 136 of the Constitution. That certainly could not be so when an appeal is dismissed though by a non-speaking order. Here the doctrine of merger applies. In that case, the Supreme Court upholds the decision of the High Court or of the Tribunal from which the appeal is provided under clause (3) of article 133. This doctrine of merger does not apply in the case of dismissal of a special leave petition under article 136. When an appeal is dismissed the order of the High Court is merged with that of the Supreme Court. We quote the following paragraph from the judgment of this court in the case of Supreme Court Employees' Welfare Association v. Union of India, (1989) 4 SCC 187 (pages 206-07, para. 22):

‘22. It has been already noticed that the special leave petitions filed on behalf of the Union of India against the said judgments of the Delhi High Court were summarily dismissed by this court. It is now a well-settled principle of law that when a special leave petition is summarily dismissed under article 136 of the Constitution, by such dismissal this court does not lay down any law, as envisaged by article 141 of the Constitution, as contended by the learned Attorney General. In Indian Oil Corporation Ltd. v. State of Bihar, [1987] 167 ITR 897 (SC); (1986) 4 SCC 146 it has been held by this court that the dismissal of a special leave petition in limine by a non-speaking order does not justify any inference that, by necessary implication, the contentions raised in the special leave petition on the merits of the case have been rejected by the Supreme Court. It has been further held that the effect of a non-speaking order of dismissal of a special leave petition without anything more indicating the grounds or reasons of its dismissal must, by necessary implication, be taken to be that the Supreme Court had decided only that it was not a fit case where special leave petition should be granted. In Union of India v. All India Services Pensioners Association, (1988) 2 SCC 580, this court has given reasons for dismissing the special leave petition. When such reasons are given, the decision becomes one which attracts article 141 of the Constitution which provides that the law declared by the Supreme Court shall be binding on all the courts within the territory of India. It, therefore, follows that when no reason is given, but a special leave petition is dismissed simpliciter, it cannot be said that there has been a declaration of law by this court under article 141 of the Constitution.’

9. It was, therefore, contended that once this court in Civil Appeal No. 424 of 1999 has dismissed the appeal, it has upheld the order of the High Court in the case of the assessment year 1980-81 and it cannot take a different view for the assessment year 1979-80. There appears to be substance in the submission of the assessee.”

13. The contention that the powers exercised by this court at the stage of admission of appeal are akin to powers exercised by the apex court under article 136 of the Constitution deserves to be stated to be rejected. The apex court has very succinctly explained the source of powers available to it in the case of Kunhayammed, [2000] 245 ITR 360, 368, 369 (SC); (2000) 6 SCC 359; [2000] 119 STC 505 (SC) in the following words:

“13. The appellate jurisdiction exercised by the Supreme Court is conferred by articles 132 to 136 of the Constitution. Articles 132, 133 and 134 provide when an appeal thereunder would lie and when not. article 136 of the Constitution is a special jurisdiction conferred on the Supreme Court which is sweeping in its nature. It is a residuary power in the sense that it confers an appellate jurisdiction on the Supreme Court subject to the special leave being granted in such matters as may not be covered by the preceding articles. It is an overriding provision conferring a special jurisdiction providing for invoking of the appellate jurisdiction of the Supreme Court not fettered by the sweep of preceding articles. Article 136 opens with a non obstante clause and conveys a message that even in the field covered by the preceding articles, jurisdiction conferred by article 136 is available to be exercised in an appropriate case. It is an untrammelled reservoir of power incapable of being confined to definitional bound; the discretion conferred on the Supreme Court being subjected to only one limitation, that is, the wisdom and good sense or sense of justice of the judges. No right of appeal is conferred upon any party; only a discretion is vested in the Supreme Court to interfere by granting leave to an applicant to enter in its appellate jurisdiction not open otherwise and as of right.

Thus, a petition seeking grant of special leave to appeal and the appeal itself, though both dealt with by article 136 of the Constitution, are two clearly distinct stages. In our opinion, the legal position which emerges is as under:

(1) While hearing the petition for special leave to appeal, the court is called upon to see whether the petitioner should be granted such leave or not. While hearing such petition, the court is not exercising its appellate jurisdiction; it is merely exercising its discretionary jurisdiction to grant or not to grant leave to appeal. The petitioner is still outside the gate of entry though aspiring to enter the appellate arena of the Supreme Court. Whether he enters or not would depend on the fate of his petition for special leave.

(2) If the petition seeking grant of leave to appeal is dismissed, it is an expression of opinion by the court that a case for invoking appellate jurisdiction of the court was not made out;

(3) If leave to appeal is granted the appellate jurisdiction of the court stands invoked; the gate for entry in the appellate arena is opened. The petitioner is in and the respondent may also be called upon to face him, though in an appropriate case, in spite of having granted leave to appeal, the court may dismiss the appeal without noticing the respondent.

4. In spite of a petition for special leave to appeal having been filed, the judgment, decree or order against which leave to appeal has been sought for, continues to be final, effective and binding as between the parties. Once leave to appeal has been granted, the finality of the judgment, decree or order appealed against is put in jeopardy though it continues to be binding and effective between the parties unless it is a nullity or unless the court may pass a specific order staying or suspending the operation or execution of the judgment, decree or order under challenge.”

14. As far as the provisions of section 260A of the Act are concerned, there 1 is no such dichotomy of powers. Nor does the court have any powers which can be equated with the powers exercised by the Supreme Court under article 136 of the Constitution. The only jurisdiction that the High Court has, while hearing appeals filed under section 260A of the Act is the appellate jurisdiction, it has no discretionary jurisdiction which would permit the High Court to prevent a party from filing an appeal. There is no provision which requires seeking of leave to file an appeal, nor is there any provision or rule whereby the High Court can grant or refuse leave to file an appeal. As a matter of fact the appeals are filed with the registry, and after completion of the necessary formalities, including compliance with the Rules of the High Court, the appeal is numbered as such and is placed for hearing only as an appeal, whereas before the apex court what is placed at the initial stage is a special leave petition seeking permission to file appeal. In the absence of any such powers being available to the High Court under section 260A of the Act, the High Court cannot prevent any party from filing an appeal and has to hear the appeal itself when the same is notified for hearing.

15. In a case where an order of a subordinate forum is carried in appeal, the appellate court may (i) reverse the order under appeal, (ii) modify the order under appeal, (iii) merely dismiss the appeal and thus, confirm the order under appeal without any modification. The apex court has laid down that in all the three eventualities it is the appellate decision alone which subsists and is operative and capable of enforcement. That there is no difference in principle and it is not possible to draw any distinction between the first two kinds of orders made by the appellate authority and the third kind of order made by the appellate authority. In law the terms “affirm” and “confirm” are synonymous. Both the terms denote ratification of a judgment.

16. In the case of Somnath Sahu v. State of Orissa, (1969) 3 SCC 384, when the matter came up before the apex court it was observed that the learned single judge of the High Court of Orissa had in terms expressed opinion that where an appellate court merely dismisses the appeal, the principle of merger will have no application, but the position would be otherwise where there is modification or variation by the appellate authority. The apex court stated that “this distinction is unsound and is based on no discernible principle”. Therefore, the view expressed by the Tribunal in the impugned order that when the High Court dismisses the appeal by holding that no substantial question of law arises, the High Court does not render any decision is an incorrect proposition and cannot be accepted.

17. When one talks of merger of a judgment, order or a decision of a subordinate court or forum into the judgment, order or decision of a superior court or forum the merger may be of the entire order, i.e, the reasons and the conclusion, or only a part, viz., only the conclusion by a different process of reasoning. In that event what merges is the operative part after the confirmation, reversal or modification, but in any event, the order of the lower court or the forum does not have any independent existence thereafter. This would be a merger in a case where the reasoning of the subordinate forum is either expressly not approved, or a different reasoning is given by the superior court or forum. However, in a case where the superior court either adopts or reiterates the reasoning, or records an express approval of the reasoning, the merger is in relation to both the operative part and the reasons.

18. The net effect is that the order of the subordinate court or the forum merges in the order of the superior court or forum and has no independent existence in relation to the issue which was carried before the appellate court or forum. If the merger is issue specific, there is fusion of the orders only to that limited extent. That is the reason why the principle of merger is stated to be neither rigid nor of universal application. Therefore, it cannot be successfully contended that in the latter situation, i.e, where the appellate court or the forum merely accords approval to the reasoning of the lower court or forum, there is no decision of the appellate court or forum.

19. The doctrine of merger is founded on the principle of propriety in the hierarchy of the justice delivery system, the underlying logic being that there cannot be more than one operative order governing the same subject-matter at a given point of time. The only caveat to the doctrine of the merger is that the content or the subject-matter of challenge before the superior forum has to be borne in mind.

20. Once the High Court has dismissed an appeal on an issue brought before the High Court confirming the findings of the Tribunal it will not be open to the Tribunal thereafter to exercise powers of rectification under section 254(2) of the Act. The order of the Tribunal on the subject-matter of appeal has no existence after the order of the High Court. The Tribunal cannot, in the guise of distinguishing its own order for earlier years, ignore the fact that the only effective order for earlier years is that of the High Court. The Tribunal cannot also state that a particular argument was not raised or considered and hence, the Tribunal will not follow and apply the earlier decision of the High Court:

… As laid down by the apex court in the case of Ambika Prasad Mishra v. State of U.P, AIR 1980 SC 1762; (1980) 3 SCC 719 (pages 1764 and 1765):

“Every new discovery or argumentative novelty cannot undo or compel reconsideration of a binding precedent…. a decision does not lose its authority ‘merely because it was badly argued inadequately considered and fallaciously reasoned’…”

21. Similarly in the case of Kesho Ram and Co. v. Union of India, (1989) 3 SCC 151, it is stated by the Supreme Court thus (page 160):

“The binding effect of a decision of this court does not depend upon whether a particular argument was considered or not, provided the point with reference to which the argument is advanced subsequently was actually decided in the earlier decision”.

22. In a case where the appeal is dismissed on account of (i) being barred by limitation, (ii) being defective in nature, (iii) the appellant having no locus standi to prefer appeal, it cannot be stated that there is merger of the order of the subordinate forum in the order of the superior forum. The reason is there is no “order” made by the superior forum, i.e, on the merits, the controversy between the parties has not been gone into by the appellate forum. But, in a case where the High Court comes to the conclusion that no substantial question of law arises on a particular issue, it cannot be stated that when the appeal is dismissed by the High Court, the subject-matter of the controversy between the parties has not been dealt with by the High Court. The decision of the Tribunal is affirmed on the issue brought before the High Court.

23. As laid down by the apex court, the appellate jurisdiction is conferred on the Supreme Court by articles 132, 133 and 134 of the Constitution, while under article 136 of the Constitution a special jurisdiction is conferred on the Supreme Court which is sweeping in its nature. It carries with it a residuary power. Under the said article no right of appeal is conferred on any party; only a discretion is vested in the Supreme Court to interfere by granting leave to an applicant to enter the appellate jurisdiction which is otherwise not open and not available as a right. The legal position in this regard has been stated by the apex court in the case of Kunhayammed, [2000] 245 ITR 360 (SC); (2000) 6 SCC 359; [2000] 119 STC 505 (SC) wherein the Supreme Court makes it clear that granting of leave and filing of appeal are two distinct stages and where leave to appeal is dismissed, the apex court does not permit invoking the appellate jurisdiction of the Supreme Court.

24. In the light of what is stated hereinbefore, and more particularly on application of the doctrine of merger, the submission that unless a substantial question of law is formulated there can be no decision of the High Court under section 260A of the Act is an incorrect proposition. In the case of CIT v. Cadila Chemicals P. Ltd., [1998] 230 ITR 885 this court has laid down (page 890):

“… When a decision on a question of law is rendered by the High Court, it will remain a binding precedent, on the doctrine of ‘stare decisis’ and when an identical question of law is involved in a subsequent matter the Tribunal would be bound to follow the decision of its jurisdictional High Court and it cannot be said that a question of law arises for the opinion of the High Court from such order of the Tribunal, which has followed the High Court decision on the question which is already settled so far as it is concerned, and would be a binding precedent until reconsidered and departed from by a larger Bench of the same court or overruled by the Supreme Court.”

25. In an order of affirmation, repetition of reasons may not be elaborate, but once the order shows that the points urged have been dealt with and reasons for affirmation/approval stated, the matter ends. It is a decision of the superior court viz., the High Court and the Tribunal cannot ignore it. Where by a process of incorporation, the High Court refers to and relies upon its own order made earlier in the point of time in the case of the same assessee, or even some other assessee, by necessary implication the reasons stated in the earlier order become reasons for the subsequent order, and it is not open to anyone to contend that the High Court has dismissed the appeal only on the facts without rendering any decision. The decision of the High Court could be both on the facts and law, or on any one, where the High Court does not find any reason to interfere with the decision of the Tribunal.

26. In the result, the effect of dismissal of a tax appeal by the High Court holding that no substantial question of law arises is that the order of the Tribunal on the issue which was agitated by the appellant before the High Court stands merged in the order of the High Court, and for all intents and purposes it is the decision of the High Court which is operative and which is capable of being given effect to. It is not open to any person to contend that there is no decision of the High Court and the subordinate forum is entitled to take a contrary view than the one adopted in the earlier proceedings which have been affirmed by the High Court by a process of dismissal of the appeal simpliciter.

Question No. 2

27. In so far as question No. 2 is concerned, according to the Tribunal section 80-I of the Act uses the phrase “derived from” and hence the interest received by the assessee from its trade debtors cannot be taken into consideration for the purpose of computing profits derived from an industrial undertaking. The Tribunal has failed to appreciate that it is not the case of the Assessing Officer that the interest income is not assessable under the head “Profits and gains of business”. It is only while computing relief under section 80-I of the Act that the Revenue changes its stand. When one reads the opening portion of section 80-I of the Act it is clear that the words used are “gross total income of an assessee includes any profits and gains derived from an industrial undertaking”. Once this is the position then, in computing the total income of the assessee, a deduction from such profits and gains of an amount equal to the prescribed percentage is to be allowed. That, in fact, the gross total income of the assessee included profits and gains from such business and this is apparent on a plain glance at the computation in the assessment order. Both in relation to the Vatva unit and the Mandali unit the computation commences by taking the profit as per the statement of income filed along with the return of income. Therefore, the same item of receipt cannot be treated differently: once while computing the gross total income and secondly at the time of computing deduction under section 80-I of the Act. Therefore, on this limited count alone, the order of the Tribunal suffers from a basic fallacy resulting in an error in law and on facts. The Tribunal instead of recording findings on the facts proceeded to discuss law. This litigation could have been avoided if the parties had invited attention to the basic facts.

28. Neither the approach nor the reasons advanced by the Tribunal deserve acceptance. It is an incorrect proposition to state that interest paid by the debtors for late payment of the sale proceeds would not form part of the eligible income for the purpose of computing relief under section 80-I of the Act. The reliance on the general meaning of the term interest as well as drawing distinction between the source of sale proceeds and the source of interest is erroneous in law. In the case of CIT v. Govinda Choudhury and Sons, [1993] 203 ITR 881 the apex court was called upon to decide as to the nature of interest received by the assessee therein. In the case before the apex court the assessee who was executing Government contracts found-itself involved in disputes with the State Government with regard to the payments due under the contracts and upon reference to arbitrators, the award included the principal sum as well as the interest for delay in payment of the principal sum. The assessee claimed that the interest was of the same nature as other trading receipts, but it was held by the Tribunal that the same was “income from other sources”: The apex court laid down (page 884):

“The assessee is a contractor. His business is to enter into contracts. In the course of the execution of these contracts, he has also to face disputes with the State Government and he has also to reckon with delays in payment of amounts that are due to him. If the amounts are not paid at the proper time and interest is awarded or paid for such delay, such interest is only an accretion to the assessee's receipts from the contracts. It is obviously attributable and incidental to the business carried on by him. It would not be correct, as the Tribunal has held, to say that this interest is totally de hors the contract business carried on by the assessee. It is well settled that interest can be assessed under the head ‘Income from other sources’ only if it cannot be brought within one or the other of the specific heads of charge. We find it difficult to comprehend how the interest receipts by the assessee can be treated as receipts which flow to him de hors the business which is carried on by him. In our view, the interest payable to him certainly partakes of the same character as the receipts for the payment of which he was otherwise entitled under the contract and which payment has been delayed as a result of certain disputes between the parties. It cannot be separated from the other amounts granted to the assessee under the awards and treated as ‘income from other sources’.”

29. However, the parties having made elaborate submissions, the matter may be examined from a slightly different angle. When the assessee enters into a contract for sale of its products it could either stipulate (a) that interest at the specified rate would be charged on the unpaid sale price and added to the outstanding till the point of time of realisation, or (b) that in case of delay the payment for sale of products worth Rs. 100 to carry the sale price of Rs. 102 for first month's delay, Rs. 104 for the second month's delay, Rs. 106 for the third month's delay and so on. If the contention of the Revenue is accepted, merely because the assessee has described the additional sale proceeds as interest in the case of a contract as per illustration (a) above, such payment would not be profits derived from the industrial undertaking, but in the case of illustration (b) above, if the payment is described as sale price it would be profits derived from the industrial undertaking, this can never be because in sum and substance these are only two modes of realising sale consideration, the object being to realise the sale proceeds at the earliest and without delay. The purchaser pays a higher sale price if it delays payment of the sale proceeds. In other words, this is a converse situation to offering of cash discount. Thus, in principle, in reality, the transaction remains the same and there is no distinction as to the source. It is incorrect to state that the source for interest is the outstanding sale proceeds. It is not the assessee's business to lend funds and earn interest. The distinction drawn by the Revenue is artificial in nature and is neither in consonance with law nor commercial practice.

30. The Tribunal was, therefore, not justified in holding that while computing deduction under section 80-I of the Act, interest received from trade debtors towards late payment of sales consideration is required to be excluded from the profits of the industrial undertaking as the same cannot be stated to have been derived from the business of the industrial undertaking. In the result, both the questions stand answered as hereinbefore. The appeal is accordingly allowed and stands disposed of.

OJCA No. 160 of 2005

31. In the light of the order made in the tax appeal, i.e, Tax Appeal No. 632 of 2005, i.e, the main matter, this application has become infructuous and stands rejected accordingly.