Principal Commissioner Of Income Tax Kolkata-2 v. M/S V.n. Enterprises Limited

IN THE HIGH COURT AT CALCUTTA CIVIL APPELLATE JURISDICTION (Original Side) R.V.W.O No. 21 of 2021 With ITAT 129 OF 2016IA No. GA 1 OF 2021 (Through Video Conference)Reserved on : 05.07.2022Pronounced on: 30.08.2022 Principal Commissioner of Income Tax Kolkata-2 -Vs- ...Appellant M/s V.N. Enterprises Limited ...Respondent -Present: Mr. Soumen Bhattacharjee Advocate …. for the Appellant Mr. J.P. Khaitan, Sr. Advocate, Ms. Swapna Das, Mr. P. Jhunjhumwala, Mr. Siddharth Das, Advocates .... for the Respondent/Review Petitioner Coram: THE HON’BLE JUSTICE PRAKASH SHRIVASTAVA, CHIEF JUSTICE THE HON’BLE JUSTICE RAJARSHI BHARADWAJ, JUDGE - - -2 Rajarshi Bharadwaj, J: 1.The instant review application has been filed in the original side of thisHon’ble Court. The Review applicant being aggrieved by and dissatisfied withthe judgement dated 30.09.2021 passed in ITAT 129 of 2016 has preferred tofile the instant review application owing to an error apparent from the recordsin an order passed in appeal under section 260A of the Income Tax Act. 2.The fact in a nutshell is that the Hon’ble Court disposed of the appeal ofrevenue in respect of an order dated August 14, 2015 for the assessmentyears 2002-03, 2003-04 and 2004-05. Although the revenue’s appeal for theassessment year 2005-06 was dismissed as withdrawn on account of low taxeffect, however, the facts and circumstances giving rise to the appeal for theassessment year 2002-03 and 2003-04 are as follows: A.The applicant a 100 % Export Oriented Unit bought varieties of teas inbulk, blended and packed it for export. Owing to such nature of thebusiness the petitioner claimed exemption under section 10B of the IncomeTax Act, 1961 for ten years, commencing from the assessment year2002-03.bulk, blended and packed it for export. Owing to such nature of thebusiness the petitioner claimed exemption under section 10B of the IncomeTax Act, 1961 for ten years, commencing from the assessment year2002-03. B.The assessing officer however disallowed the claim of the applicant on thegrounds that blending of tea did not amount to manufacturing. Thecommissioner of Income tax (Appeals) held for both the years that blendingof tea did not amount to manufacturing. However, on further appeal, thetribunal by its order dated August 14, 2015 granted relief to the applicant.grounds that blending of tea did not amount to manufacturing. Thecommissioner of Income tax (Appeals) held for both the years that blendingof tea did not amount to manufacturing. However, on further appeal, thetribunal by its order dated August 14, 2015 granted relief to the applicant. 3.The revenue preferred an appeal under section 260A of the Income TaxAct before the Hon’ble Court in respect of the order dated August 14, 2015. 4.After hering both the parties, the Hon’ble Court reformulatedsubstantial question of law and answered in favour of the revenue and againstthe assessee. The reformulated substantial question of law reads as- - - -3 A.Whether in the facts and circumstance of the case the assessee will beentitled to exemption under section 10B of the Income Tax Act for businessof blending of tea being carried on by it taking aid from provisions of otherstatutes and the policies?entitled to exemption under section 10B of the Income Tax Act for businessof blending of tea being carried on by it taking aid from provisions of otherstatutes and the policies? 5.Thus, being aggrieved by the Judgement of the Hon’ble Court thepresent revision application has been filed.present revision application has been filed. 6.Mr. J.P. Khaitan, learned senior Counsel appearing for the applicantsubmits:submits: - - -3 A.Whether in the facts and circumstance of the case the assessee will beentitled to exemption under section 10B of the Income Tax Act for businessof blending of tea being carried on by it taking aid from provisions of otherstatutes and the policies?entitled to exemption under section 10B of the Income Tax Act for businessof blending of tea being carried on by it taking aid from provisions of otherstatutes and the policies? 5.Thus, being aggrieved by the Judgement of the Hon’ble Court thepresent revision application has been filed.present revision application has been filed. 6.Mr. J.P. Khaitan, learned senior Counsel appearing for the applicantsubmits:submits: i.The said judgement and order suffers from an error apparent on theface of the record inasmuch as a substantial question of law wasreformulated after the conclusion of the hearing while preparing thejudgement without affording any opportunity to the parties to makesubmissions on the reformulated question.face of the record inasmuch as a substantial question of law wasreformulated after the conclusion of the hearing while preparing thejudgement without affording any opportunity to the parties to makesubmissions on the reformulated question. ii.If given an opportunity, the applicant would have submitted that the re-formulated question did not cover within its scope the principalargument that the definition of “manufacture” in section 10B of theIncome Tax Act, 1961 prior to its substitution by the Finance Act, 2000continued to apply even for the purposes of the substituted section.formulated question did not cover within its scope the principalargument that the definition of “manufacture” in section 10B of theIncome Tax Act, 1961 prior to its substitution by the Finance Act, 2000continued to apply even for the purposes of the substituted section. iii.Reference was made to the provisions of the Export & Import policy andto the SEZ Act to submit that the definition of “manufacture” in section10B of the Act prior to its substitution was in accord with the definitionin such policy and statute under which the eligible undertakings wereset up and that the earlier definition continued to apply even for thepurposes of the substituted section. It was not contended that thebenefit under section 10B of the Act should be granted because of thedefinition of “manufacture” in the Export & Import policy or the SEZ Actas erroneously recorded in the said judgement and order.to the SEZ Act to submit that the definition of “manufacture” in section10B of the Act prior to its substitution was in accord with the definitionin such policy and statute under which the eligible undertakings wereset up and that the earlier definition continued to apply even for thepurposes of the substituted section. It was not contended that thebenefit under section 10B of the Act should be granted because of thedefinition of “manufacture” in the Export & Import policy or the SEZ Actas erroneously recorded in the said judgement and order. - - -4 iv. Reliance was placed upon the judgement of the Hon’ble Supreme Courtin Indore Vikas Pradhikaran v. Pure Industrial Coke & Chemicals Ltd.,(2007) 8 SCC and although duly noted, it had not been considered. Thenon-consideration of the said judgement was an error apparent on theface of the record. The view taken in the said judgement and order wasalso contrary to the view taken by the division bench of this court inPrincipal Commissioner of Income Tax v. A.P., (2019). 410 ITR 168 (Cal)and that in case the division bench found itself in disagreement with theprevious division bench, it ought to have referred the matter to theHon’ble Chief Justice for constitution of a larger bench and ought not tohave decided the appeal. v. iv. Reliance was placed upon the judgement of the Hon’ble Supreme Courtin Indore Vikas Pradhikaran v. Pure Industrial Coke & Chemicals Ltd.,(2007) 8 SCC and although duly noted, it had not been considered. Thenon-consideration of the said judgement was an error apparent on theface of the record. The view taken in the said judgement and order wasalso contrary to the view taken by the division bench of this court inPrincipal Commissioner of Income Tax v. A.P., (2019). 410 ITR 168 (Cal)and that in case the division bench found itself in disagreement with theprevious division bench, it ought to have referred the matter to theHon’ble Chief Justice for constitution of a larger bench and ought not tohave decided the appeal. v. The constitution bench of the Hon’ble Supreme Court in Commisioner ofCustoms v. Dilip Kumar & Company, (2018) 9 SCC 1, held thatambiguity in exemption provision should be resolved in favour of therevenue. In Government of Kerela v. Mother Superior AdorationConvent, (2021) 5 SCC 602, the Hon’ble Supreme Court held that thedecision in Commisioner of Customs v. Dilip Kumar & Company, (2018)9 SCC 1, was not applicable in respect of exemption provisions whichhad a beneficial purpose and that an exemption provision should beliberally constructed in accordance with the object sought to beachieved if such provision was to grant incentive for promotingeconomic growth or otherwise had some beneficial reason behind it. Theprovisions of sections 10A and 10B have a beneficial purpose andgrant exemption with the object of promoting exports and earningvaluable foreign exchange for the country and therefore, the decision ofthe Hon’ble Supreme Court in Government of Kerela v. Mother SuperiorAdoration Convent, (2021) 5 SCC 602 is squarely applicable and isdirectly contrary to the said judgement and order. The said judgementand order suffers from an error apparent on the face of record since - - -5 there is a direct conflict with the judgement and order of the Hon’bleSupreme Court in Government of Kerela v. Mother Superior AdorationConvent,(2021) 5 SCC 602. vi.The said judgement and order suffers from an error apparent on theface of record since Dilip Kumar & Co.’s case has no application in thefacts and circumstances of the instant case and ought not to have beenapplied. Thus, this Hon’ble Court ought to have dismissed the appeal ofthe revenue for the assessment years 2002-03 and 2003-04 andanswered the substantial questions of law arising out of the Tribunal’sorder dated August 14,2015 in the petitioners favour and against therevenue. 7.Learned Counsel appearing for the revenue submits that when thelearned senior Counsel appearing for applicant, who has himself appeared forthe respondents in appeal and accepts that the question formulated wasanswered in detail by him at the hearing in appeal, then how can he aggitateon the issue of not framing the question in appeal. This clearly shows that thereview application has no merit and should be dismissed with cost. 8.We have given our thoughtful considerations to the respectivesubmissions raised by the bar. Order 47 Rule 1 (1) of the Code of Civil Procedure, 1908 provides for anapplication for review which reads as under: “1.Application for review of judgment.--(1) Any person considering himselfaggrieved—aggrieved— (a)by a decree or order from which an appeal is allowed, but from whichno appeal has been preferred,no appeal has been preferred, 8.We have given our thoughtful considerations to the respectivesubmissions raised by the bar. Order 47 Rule 1 (1) of the Code of Civil Procedure, 1908 provides for anapplication for review which reads as under: “1.Application for review of judgment.--(1) Any person considering himselfaggrieved—aggrieved— (a)by a decree or order from which an appeal is allowed, but from whichno appeal has been preferred,no appeal has been preferred, (b)by a decree or order from which no appeal is allowed, or(c)by a decision on a reference from a Court of Small Causes, and who,from the discovery of new and important mater or evidence which,after the exercise of due diligence, was not within his knowledge orcould not be produced by him at the time when the decree was passedor order made, or on account of some mistake or error apparent on theface of the record, or for any other sufficient reason, desires to obtain areview of the decree passed or order made against him, may apply fora review of judgment to the court which passed the decree or made theorder.”(c)by a decision on a reference from a Court of Small Causes, and who,from the discovery of new and important mater or evidence which,after the exercise of due diligence, was not within his knowledge orcould not be produced by him at the time when the decree was passedor order made, or on account of some mistake or error apparent on theface of the record, or for any other sufficient reason, desires to obtain areview of the decree passed or order made against him, may apply fora review of judgment to the court which passed the decree or made theorder.” - - -6 9.Supreme Court in Kamalesh Verma Vs. Mayawati & Others reported in (2013) 8 SCC 320 has categorically held that- “12.This Court has repeatedly held in various judgments that thejurisdiction and scope of review is not that of an appeal and it can beentertained only if there is an error apparent on the face of the record. Amere repetition through different counsel, of old and overruled arguments,a second trip over ineffectually covered grounds or minor mistakes ofinconsequential import are obviously insufficient.” “8. It is well settled that a party is not entitled to seek a review of ajudgment delivered by this Court merely for the purpose of a rehearingand a fresh decision of the case. The normal principle is that a judgmentpronounced by the Court is final, and departure from that principle isjustified only when circumstances of a substantial and compellingcharacter make it necessary to do so.” 10.The question framed by the Court was argued by the counsels duringhearing of the appeal and each and every issue was considered in thejudgement dated 30.09.2021. A review of the judgment dated 30.09.2021 is byno means an appeal in disguise whereby a decision is reheard and corrected,but only if an error is apparent on the face of the record.Mere repetition of thesame grounds agitated in review is not maintainable when the same reliefsought at the time of arguing the appeal had been negatived. 11.In the light of the above discussion, the review application is disposed ofwith the above observation. (PRAKASH SHRIVASTAVA)CHIEF JUSTICE (RAJARSHI BHARADWAJ) JUDGE Kolkata 30.08.2022PA(BS)