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SUPREME COURT JUDGMENTS 2008

AIT-2008-352-SC
B.M. Malani Vs. Commissioner of Income Tax

Section 220(2A) of the Income Tax Act - jurisdiction upon the Chief Commissioner or Commissioner to
reduce or waive the amount of interest paid or payable by an assessee-Indisputably, the Commissioner has the discretion not to accede to the request of the assessee, but that discretion must be judiciously exercised. He has to arrive at a satisfaction that the three conditions laid down therein have been fulfilled before passing an order waiving interest.

Compulsion to pay any unjust dues per se would cause hardship. But a question, however, would further arise as to whether the default in payment of the amount was due to circumstances beyond the control of the assessee

AIT-2008-357-SC
Shreyans Industries Ltd Vs CIT, Punjab

Whether the Tribunal was justified in law in allowing the expenditure incurred by the assessee under the head "Building Account", for the construction of drainage for disposal of effluents by treating the same as Revenue Expenditure, while ignoring the facts that the assessee had acquired an asset of enduring benefit in nature and enjoys exclusive rights for the usage of the same

AIT-2008-358-SC
M/s. Mewar Bartan Nirmal Udyog Vs CCE, Jaipur

exemption Notification has to be read strictly. A notification of exemption has to be interpreted in terms of its language. Where the language is plain and clear, effect must be given to it. While interpreting the exemption notification, one cannot go by rules of interpretation applicable to cases of classification under the Tariff

AIT-2008-359-SC
Padam Narain Aggarwal Vs Union of India, New Delhi
High Court directed that in case the Customs Authorities find that any non-bailable offence has been committed by the respondents, they shall not be arrested without ten days prior notice.The order passed by the High Court to the extent of directions issued to the Custom Authorities is set aside
AIT-2008-363-SC
M/s Dharamendra Textile Processors and Ors Vs. Union of India

Larger Bench: Section 11AC of the Central Excise Act, 1944 inserted by Finance Act, 1996 with the intention of imposing mandatory penalty on persons who evaded payment of tax should not be read to contain mens rea as an essential ingredient and there is no scope for levying penalty below the prescribed minimum.
the plea that the Rules 96ZQ and 96ZO have a concept of discretion inbuilt cannot be sustained. Dilip Shroff's case was not correctly decided

AIT-2008-364-SC
Cosmopolitan Club Vs. State of Tamil Nadu & ors.

Liability of club to pay sales tax under the Tamil Nadu General Sales Tax Act, 1959, on the supplies of food and drinks to its members

AIT-2008-366-SC
Ratan Melting & Wire Industries Vs. Commissioner of Central Excise, Bolpur

(5 Member Full Bench)

Circulars and instructions issued by the Board are no doubt binding in law on the authorities under the respective statutes, but when the Supreme Court or the High Court declares the law on the question arising for consideration, it would not be appropriate for the Court to direct that the circular should be given effect to and not the view expressed in a decision of this Court or the High Court. a circular which is contrary to the statutory provisions has really no existence in law

AIT-2008-367-SC
Vijay Ship Breaking Corpn. & Ors Vs. Commissioner of Income Tax, Ahmedabad

Tribunal was right in allowing the deduction under Sections 80HH and 80I to the assessee holding that the ship breaking activity gave rise to the production of a distinct and different article. The assessee was not bound to deduct tax at source once Explanation-2 to Section 10(15)(iv)(c) stood inserted as TDS arises only if the tax is assessable in India.

AIT-2008-368-SC
M/s Gujarat Siddhi Cement Ltd Vs CIT, Rajkot

the effect of Section 43A of the Act. The effect of fluctuation of foreign exchange rate resulting in increase of cost of plant and machinery

AIT-2008-369-SC
M/s Rajpurohit GMP India Ltd. Vs CCE, Mumbai

cutting and slitting of steel sheets of polyester films used for lamination purposes does not amount to manufacture

AIT-2008-374-SC
Ratnakar Bank Ltd Vs CIT, Kolhapur

whether interest earned by the assessee bank on government securities was liable to be assessed under Section 2(7) of the Interest Act

AIT-2008-375-SC
Sarabhai Holdings Pvt. Ltd Vs CIT, Ahmedabad

the assessee had reasonably believed that the income of interest which was written off by the Resolution, could not be added to its income. If it genuinely proceeded under that bonafide impression, then in our opinion, the High Court was right in writing off the penalty

AIT-2008-381-SC
Krishak Bharati Cooperative Ltd Vs. JCIT

CIT(A) held that since the receipt of service charges was not directly connected or linked with the manufacturing activity carried out in the industrial undertaking of the assessee, the service charges received by the assessee from the said activity of producing Heavy Water cannot be considered as the profit derived from its industrial undertaking so as to qualify for deduction under Section 80-I of the Income Tax Act, 1961 (for short, "the 1961 Act"). For the said reasons, the CIT(A) disallowed the assessee's claim for deduction under Section 80-I. This view of CIT(A) has been affirmed by the judgment of the Tribunal as well as by the impugned judgment of Delhi High Court dated 15.11.2006 in ITA Nos. 1252/06, 1253/06 and 1254/06.
The most important aspect, in our view, is costing, pricing and sharing of revenue between the parties, which was required to be examined by the Tribunal. All these facts were relevant because in this case we are concerned with the issue, namely, receipt of service charges was or was not directly connected or linked with the manufacturing activity carried out in the industrial undertaking of the appellant. The exact meaning of the manufacturing carried out in the industrial undertaking of the appellant requires in-depth examination of various aspects indicated hereinabove. Prima facie it appears that, under the earlier dispensation, which prevailed at the relevant time, the HAEP was an extended link of the Ammonia Plant and in that context, as stated above, both the plants were interdependent on each other. This matter is also of some importance. It concerns not only the interdependence of the plants but it also gives rise to an important question of law as to the interpretation of Section 80-I in the context of Heavy Water Plant and the Ammonia Plant, particularly when it concerns synthesis gas flowing from Ammonia plant to the HWP, extraction of deuterium from synthesis gas and return of the balance synthesis gas to the Ammonia Plant.

AIT-2008-384-SC
M/s. Kanpur Edibles Pvt. Ltd Vs Commissioner Trade Tax, UP

order passed by the Commissioner of Trade Tax, U.P. under Section 10-B of the U.P. Sales Tax Act, 1948
If the revisional authority was of the view that the order dated 29.5.2003 was not legal, then that order would have been varied if it was found that order lacked legality or propriety. The expression "with respect thereof" makes the position clear that for testing the legality or propriety of the order (in the instant case the order dated 29.5.2003) if any order was to be passed that had to be passed with respect thereof. Such an order does not empower the revisional authority to make an order of assessment. As noted above, what the revisional authority has done is to substitute the original orders of assessment in the garb of testing the legality and/or propriety of the order cancelling the notices. Such a course is not countenanced and has no legal basis. Therefore, the High Court was not justified in interfering with the order of the Tribunal

AIT-2008-398-SC
National Organic Chemical Industries Limited† Vs.CCE, Mumbai†

Ethylene and propylene manufactured by the respondent assessee and used in its factory in the further manufacture of the same goods would be entitled to the benefit of exemption contained in notification no.217/86.

AIT-2008-399-SC
M.M.T.C. Limited Vs. Commissioner of Commercial Tax & Ors

Larger Bench: Held that the order was passed in exercise of power of superintendence under Article 227 of the Constitution against which the Letters Patent Appeal is not maintainable.- the High Court was not justified in holding that the Letters Patent Appeal was not maintainable.

AIT-2008-400-SC
PNB Finance Ltd Vs CIT, New Delhi

It was not possible to compute capital gains and, therefore, the said amount of Rs. 10.20 cr. was not taxable under Section 45 of the 1961 Act

AIT-2008-402-SC
Bajaj Electricals Ltd Vs. Assistant Commercial Taxes Officer

The Legislature seeks to clarify the expression "person in-charge of the goods" occurring in Section 78(5) as it stood earlier by Act No.7 of 2002. In fact, it is interesting to note that even under Section 22A(3) of the 1954 Act, penalty was leviable on the "owner of the goods" for possession of goods not covered by the Goods Vehicle Record [including Declaration under Section 22A(3)]

AIT-2008-403-SC
J.K. Charitable Trust Vs. CIT, Kanpur

Larger Bench: Whether the revenue can be precluded from filing an appeal even though in respect of some other years involving identical dispute no appeal is filed.

AIT-2008-412-SC
Khoday Distilleries Ltd Vs. Commissioner of Income Tax and Anr

(i) Whether any "gift" arose in terms of Section 2(xii) of the Gift-tax Act, 1958 on the allotment of rights issue by the appellant company to its shareholders vide Board's Resolution dated 29.1.1986?
(ii) Whether there was any element of "gift" as defined under Section 2(xii) in the appellant issuing Bonus shares in the ratio of 1:23 in April/May, 1986?

AIT-2008-413-SC
India Cine Agencies Vs. CIT, Madras

The entitlement of benefit in terms of Section 32AB, Section 80HH and Section 80I of the Income Tax Act, 1961- conversion of Jumbo rolls of photographic films into small flats and rolls in the desired sizes amounted to manufacture/production.

AIT-2008-415-SC
M/s. Atam Manohar Ship Breakers Ltd. Vs CC, Gujarat
determination of the value of a ship imported by M/s. Atam Manohar Ship Breakers Ltd.- Commissioner came to the conclusion, that since the price stood reduced prior to the filing of the Bill of Entry, that price constituted the value of the vessel
AIT-2008-418-SC
M/s. G.P. Ceramics Pvt. Ltd Vs. CTT, UP

It is now a well established principle of law that whereas eligibility criteria laid down in an exemption notification are required to be construed strictly, once it is found that the applicant satisfies the same, the exemption notification should be construed liberally

AIT-2008-419-SC
Haleema Zubair, Tropical Traders
Vs. State of Kerala

The business activities relating to transaction of M/s. Poseidon Food Company unless otherwise proved cannot bring the appellant within the purview of definition of 'dealer'
If she was not a dealer, the professional fees earned by her would not be exigible to payment of sales tax; only because the appellant happens to be the proprietress of M/s. Tropical Traders also

AIT-2008-428-SC
Sambhaji & Ors. Vs Gangabai & Ors.

Processual law is not to be a tyrant but a servant, not an obstruction but an aid to justice. A Procedural prescription is the handmaid and not the mistress, a lubricant, not a resistant in the administration of justice

AIT-2008-436-SC
Srikumar Agencies Vs CCE, Bangalore

Larger Bench: whether the printing on the package is merely incidental or primary

AIT-2008-453-SC
Haleema Zubair, Tropical Traders Vs State of Kerala

The total turnover for the purpose of payment of sales tax was disclosed on the basis of the business carried out in the name of M/s. Tropical Traders. Whereas the taxable turnover was shown as 28,20,474.97, an addition of Rs.45,80,168.09 thereto was made by the Assessing Authority assessing a sum of Rs.3,58,87,960.97 by way of total turnover.†† The order of assessment proceeded on the basis that receipt shown as commission amounting to Rs.45,80,168.09 from M/s. Poseidon Food Company is not supported and proved by any documentary evidence. Appellant contended that the services so rendered is not a `sale' and thus, the said order of assessment is wholly illegal and without jurisdiction.

AIT-2008-454-SC
S. S. Ayodhya Distillery & Ors. Vs Commissioner of Trade Tax, UP

Whether Paddy Husk and Rice Husk connote the same commodity or not
If, according to the Government of Uttar Pradesh, rice husk is this cover which further requires husking, no exception thereto can be taken. When a paddy is dehusked, it becomes paddy husk and when the rice is dehusked, it becomes rice husk.

AIT-2008-455-SC
Sicom Ltd. & Anr Vs. Union of India & Ors

Whether realization of the duty under the Central Excise Act will have priority over the secured debts in terms of the State Financial Corporation Act, 1951
A debt which is secured or which by reason of the provisions of a statute becomes the first charge over the property having regard to the plain meaning of Article 372 of the Constitution of India must be held to prevail over the Crown debt which is an unsecured one. It is trite that when a Parliament or State Legislature makes an enactment, the same would prevail over the common law

AIT-2008-458-SC
M/s. A & G Projects & Technologies Ltd Vs State of Karnataka

if the sales stood covered under Section 3(a) and if they were not entitled to exemption under Section 6(2), whether the appellant could have been taxed by the Department by invoking the proviso to Section 9(1) of the CST ACT 1956?

AIT-2008-462-SC
Hongo India (P) Ltd.& Anr Vs. CC & CE

Whether the High Court was entitled to condone the delay of 16 days in filing the Reference Application by the Commissioner under Section 35H(1) of the Central Excise Act, 1944?
we direct the Office to keep this matter before the Hon'ble the Chief Justice for appropriate directions referring this matter to a larger Bench of this Court

AIT-2008-479-SC
Kothari Filaments & Anr Vs CC(Port), Kolkata & Ors

A person charged with mis-declaration is entitled to know the ground on the basis whereof he would be penalized. He may have an answer to the charges or may not have. But there cannot be any doubt whatsoever that in law he is entitled to a proper hearing which would include supply of the documents.

AIT-2008-493-SC
Jaiprakash Associates Ltd. Vs State of MP and Ors.

refer the matter to a larger Bench in terms of Article 145(3) of the Constitution. The following questions are referred for the aforesaid purpose:
Whether the State enactments relating to levy of Entry Tax have to be tested with reference to both Clauses (a) and (b) of Article 304 of the Constitution for determining their validity and whether Clause (a) of Article 304 is conjunctive with or separate from Clause (b) of Article 304?
Whether imposition of Entry Tax levied in terms of Entry 52 List II of 7th Schedule is violative of Article 301 of the Constitution?

SC-2008 Page 1SC-2008 Page 2††† SC-2008 Page 3


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