By TIOL News Service

CHENNAI, JULY 06, 2016: THE issue before the Bench is - Whether when a petition is filed before the SC seeking leave to appeal and the same having been converted into an appeal by SC, the HC should not entertain a review petition in relation to that and the High Court also cannot reverse and modify the order impugned before the Supreme Court. YES is the verdict.

Facts of the case

The assessee company, is a license holder of a warehousing complex consisting of buildings, godowns, weigh bridge and other equipments for the purpose of maintaining a Container Freight Station (CFS). They suffered an adverse order and hence an appeal was filed. CIT(A) observed that the first issue was with regard to disallowance of deduction of Rs.3,02,65,882 under Section 80-IA (4) holding that the appellant's facility cannot be defined as "Infrastructure facility" or fit into the definition of either "Port" or "Inland Port" as per the provisions of the Act. The AO referred to the provisions of Section 80-IA and stated that all the defined infrastructure facility will not be eligible to claim deduction but which fulfills all the conditions set out in Section 80-IA 4 (i) (a), (b) & (c) will only be eligible. He also referred to Circular No.717 dated 14/8/1995 and stated that the Board's circular also reveals that the deductions can be claimed only by the public facilities created in agreement with the government and not to the private facilities. CIT(A) held since on the similar issue in the appellant's own case for AY 09-10, the ITAT, Chennai and the Madras High Court has decided the issue in favour of assessee as mentioned above, respectfully following the decisions of the ITAT, Chennai and Madras High Court, the ground is allowed. On further appeal, Tribunal dismissed the revenue appeal.

Held that,

++ contending interalia with the principles enunciated by the SC in Kunhayammed and Others Vs. State of Kerala and Another 2002-TIOL-50-SC-LMT-LB on the doctrine of merger, would be applicable to the instant case and in the normal circumstances, when an issue is pending before SC, matters are entertained and kept alive, the Revenue's counsel, seeks for admission of the instant appeal. Admittedly, facts and law, decided in Container Corporation of India Limited Vs. ACIT & CIT followed in A.L.Logistics P Ltd's case are stated to be squarely applicable to the case on hand and thus, following the same, CESTAT, Madras, vide order, dated 16/12/2015 has dismissed the revenue appeal. Though Container Corporation's case and A.L.Logistics's case have been challenged by the revenue before the SC, we are of the considered view that there cannot be any impediment in following the said decisions to cases arising out of similar set of facts and law. However, when a petition is filed before the SC seeking leave to appeal and the same having been converted into an appeal by SC, the HC should not entertain a review petition. The HC also cannot reverse and modify the order impugned before the SC. But the judgment rendered by HC is not erased. The principles of Law enunciated by the SC in Kunhayammed and Others Vs. State of Kerala and Another 2002-TIOL-50-SC-LMT-LB, with due respect is not in strict sense be applied to the facts and law in hand. The case relates to exercise of review jurisdiction by the High Court, when Civil Appeal is pending in the Apex Court. We are not exercising such powers in the case on hand. Statute itself, provides for a remedy to the revenue as to how a judgment of the SC should be given effect. In the light of the statutory provision and discussion, we are not inclined to accept the contentions of the counsel for the appellant. Substantial questions of law have already been answered against the revenue in the case of CIT Vs. A.L. Logistics Pvt Ltd 2015-TIOL-93-HC-MAD-IT. Following the same, instant Tax Case Appeal No.405 of 2016 is dismissed.

(See 2016-TIOL-1290-HC-MAD-IT)