REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL Nos.  19650 of 2017 (Arising out of SLP(C) No.24055 of 2017)

DIRECTOR OF INCOME TAX, CIRCLE 26(1) NEW DELHI ….Appellant

versus

S.R.M.B. DAIRY FARMING (P) LTD.          ….Respondent

And

CIVIL APPEAL No. 19651 of 2017 (Arising out of SLP(C) No.24056 of 2017)

J U D G M E N T

SANJAY KISHAN KAUL, J.

1. Leave granted.

2. The  propensity  of  Government  Departments  and  public  authorities  to  keep

litigating  through  different  tiers  of  judicial  scrutiny  is  one  of  the  reasons  for

docket explosion.  The Income Tax Department of the Government of India is one

of the major litigants.  There are two departmental scrutinies at the level of the

Assessing Officer and the Commissioner of Income Tax (Appeals) and thereafter

an independent judicial scrutiny at the Income Tax Appellate Tribunal (hereinafter

referred to as the ‘ITAT’) level followed by the legal issue which can be inquired

into by the High Courts.  The last tier is, of course, the jurisdiction under Article

136 of the Constitution of India before the Supreme Court.

3. Mindful of the phenomenon of the docket explosion and the rising litigation in the

country, the Union of India in order to ensure the conduct of responsible litigation

framed what is today known as the National Litigation Policy, to bring down the

pendency of cases and get meaningful issues decided from the judicial forums

rather than multiple tiers of scrutiny just for the sake of it.   The Government,

being a litigant in well over 50 per cent of the cases, has to take a lead in not

being a compulsive litigant.

4. It is towards the aforesaid avowed object that the Income Tax Department, from

time  to  time,  has  come  out  with  administrative  circulars/notifications  for  the

Department not to litigate where the revenue impact is low.

5. In  the  present  proceedings,  we  are  concerned  with  the  implementation  of

Instruction No.3 of 2011 dated 9.2.2011, providing for  appeals not  to be filed

before the High Court(s) where the tax impact was less than Rs.10 lakh.  It also

contains certain other conditions which will be reverted to later, but suffice to say

that this Instruction was in supersession of the earlier Instruction No.1979 of 2000

dated  27.3.2000  where  the  limit  of  the  tax  effect  was  Rs.4  lakh.   The

Instruction/Circular in question is stated to have a prospective effect as per the

Revenue and, thus, cases which were pending in the High Court(s) and had been

filed prior to the Instruction in question (Instruction No.3) but had tax effect of

less than Rs.10 lakh were, thus, required to be determined on their merits and not

be dismissed by applying the circular/instruction.

6. There has been a divergence of legal opinion on this aspect amongst the High

Courts.

7. There have also been certain orders passed by this Court which appear to have a

divergence of view and we consider it necessary to examine this issue in detail so

that  conflicting  orders  do  not  arise  and  the  High  Courts  are  also  guided

appropriately.  This is also necessary, as in the mean time, a large number of cases

have been disposed of on the application of the Instruction/Circular in question

though the appeals were preferred by the Revenue prior to the Instruction/Circular

being issued as a large number of High Courts took that view.

     High Courts of  the View that the Circular in question would apply to pending appeals as well:

A. Karnataka High Court:  Commissioner of Income Tax, Bangalore v. Ranka & Ranka1.  The issue was squarely  addressed by the Division Bench of the Karnataka High Court recognizing that the  concept of providing the monetary limit was not new and has been invoked from 1992.   The limit was raised from time to time.  The clause in the circular has explained the  meaning of ‘Tax Effect’ as the “difference between the tax on total income assessed and  the tax that would have been chargeable had such total income been reduced by the  amount of income in respect of the issues against which appeal is intended to be filed  without impact of interest.”  The different clauses protected the interest of the Revenue  so as not to have any precedentiary impact.  There were, however, certain exclusions  from this, i.e., challenge to constitutional validity of an Act or Rule, declaration of any  Board Order, Notification, Instruction or Circular being held to be illegal or ultra vires,  audit objections of the Revenue Department being accepted by the Department.  These  Circulars have been given statutory recognition having been issued under Section 268A  of the Income Tax Act, 1961 (hereinafter referred to as the ‘IT Act’).

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8. The judgment took note of  the fact  that  the Madras High Court,  Kerala  High

Court,  Chhattisgarh  High Court  and the  Punjab  and Haryana High Court  had

taken a contra view, opining that the existing Circular/Instruction prevailing at the

relevant time when the appeal/reference was made would apply and there would

be no retrospective application of the circular.  On the other hand, the Bombay

High Court, Madhya Pradesh High Court, Delhi High Court had taken the view,

which was sought to be taken by the Karnataka High Court.

9. The line of reasoning adopted is that as the value of money went down and the

cases of the Revenue increased, the choking docket required such an endeavour

and there is no reason why the same policy should not be applied to old matters to

achieve the objective of the policy laid down by the Central Board of Direct Taxes

(‘CBDT’).  An earlier Circular dated 5.6.2007 issued by the CBDT was also taken

note of, which required all appeals pending before the Court to be examined, with

direction  to  withdraw  the  cases  wherein  criteria  for  monetary  limit  as  per

prevailing instructions was not satisfied unless the question of law involved or

raised in the appeal referred to High Court was of recurring nature, and therefore,

required to be settled by a higher court.

10. The  Bench  considered  the  issuance  of  the  Circular  in  the  conspectus  of  the

National Litigation Policy Document Released.  The said Policy Document which

has  been  extracted  in  the  judgment  for  its  reliance  has  been  reproduced

hereinunder: “Introduction

Whereas at the National consultation for strengthening the judiciary toward reducing pendency and delays held on October 24/25, 2009, the Union Minister for Law and Justice,  presented  resolutions  which  were  adopted  by  the  entire  conference unanimously.

And  wherein  the  said  resolution  acknowledged  the  initiative  undertaken  by  the Government of India to frame the National Litigation Policy with a view to ensure conduct of responsible litigation by the Central Government and urges every State Government to evolve similar policies.

The National Litigation Policy is as follows:

The Vision/Mission 1. The National Litigation Policy is based on the recognition that the Government and its various agencies are the pre-dominant litigants in courts and Tribunals in the country. Its  aim is to transform the Government into an efficient  and responsible litigant. This policy is also based on the recognition that it is the responsibility of the Government to protect the rights of citizens, to respect fundamental rights and those in charge of the conduct of the Government litigation should never forget this basic principle.

“Efficient litigant” means - Focusing  on  the  core  issues  involved  in  the  litigation  and  addressing  them

squarely. - Managing and conducting litigation in a cohesive, co-ordinated and time-bound

manner. - Ensuring that good cases are won and bad cases are not needlessly persevered

with. - A litigant who is represented by competent and sensitive legal persons: competent

in their skills and sensitive to the facts that the Government is not, an ordinary litigant and that a litigation does not have to be won at any cost.

“Responsible litigant” means

- That litigation will not be resorted to for the sake of litigating. - That false pleas and technical points will not be taken and shall be discouraged. - Ensuring that the correct facts and all relevant documents will be placed before

the court. - That nothing will be suppressed from the court and there will be no attempt to

mislead any court or tribunal.

2.  The Government  must  cease  to  be  a  compulsive  litigant.  The philosophy that matters should be left to the courts for ultimate decision has to be discarded. The

easy approach, “Let the court decide” must be eschewed and condemned—

3. The purpose underlying this policy is also to reduce the Government litigation in courts so that valuable court time would be spent in resolving other pending cases so as  to  achieve the  goal  in  the  principles  incorporated  in  the  National  mission for judicial reforms which includes identifying bottlenecks which the Government and its  agencies  may be concerned with and also removing unnecessary Government cases.  Prioritisation  in  litigation  has  to  be  achieved  with  particular  emphasis  on welfare  legislation,  social  reform,  weaker  sections  and  senior  citizens  and  other categories requiring assistance must be given utmost priority.

In respect of filing of appeals in revenue matters it is stated as under:

“(G) Appeals in revenue matters will not be filed:

(a) if the stakes are not high and are less than that amount to be fixed by the Revenue authorities:

(b) if the matter is covered by a series of judgments of the Tribunal or of the High Court which have held the field and which have not been challenged in the Supreme Court:

(c) where the assessee has acted in accordance with long standing industry practice:

(d) merely because of change of opinion on the part of the jurisdictional officers.

Review of pending cases (A)  All  pending  cases  involving  the  Government  will  be  reviewed.  This  due diligence process shall involve drawing upon statistics of all pending matters which shall  be  provided  for  by  all  Government  departments  (including  public  sector undertakings). The Office of the Attorney General and the Solicitor General shall also  be  responsible  for  reviewing  all  pending  cases  and  filtering  frivolous  and vexatious matters from the meritorious ones.

(B)  Cases  will  be  grouped  and  categorized.  The  practice  of  grouping  should  be introduced  whereby  cases  should  be  assigned  a  particular  number  of  identity according to the subject and statute involved. In fact, further sub-grouping will also be  attempted.  To facilitate  this  process,  standard  forms  must  be  devised  which lawyers  have  to  fill  up  at  the  time  of  filing  of  cases.  Panels  will  be  set  up  to implement  categorization,  review  such  cases  to  identify  cases  which  can  be withdrawn. These include cases which are covered by decisions of courts and cases which  are  found  without  merit  withdrawn.  This  must  be  done  in  a  time  bound fashion.”

11.  We consider it appropriate to refer to some of the observations in the judgment of

the Karnataka High Court, which have our imprimatur, as under:

“22. The Government has formulated the National Litigation Policy with a view to ensure conduct of responsible litigation by the Central Government and urges every State Government to evolve similar policies. Its aim is to transform Government into an efficient and responsible litigant. “Efficient  litigant” means ensuring that good cases are won and bad cases are not needlessly persevered with. The litigation should not be resorted to for the sake of litigating. The Government must cease to be a compulsive litigant. The philosophy, “that matters should be left  to the courts for ultimate decision”, has to be discarded. The easy approach, “Let the court decide,” must be eschewed and condemned. The purpose underlying this policy is  also to reduce the Government litigation in courts so that valuable court time would be spent in resolving other pending cases,  so as to achieve the goal in the National Legal Mission to reduce average pendency time from 15 years to 3 years. All pending cases involving the Government has to be reviewed with the intention of filtering frivolous and  vexatious  matters  from  the  meritorious  one.  Panels  have  to  be  set  up  to implement  categorization,  review  such  cases,  to  identify  cases,  which  can  be withdrawn. These include cases which are covered by decisions of courts and the cases which are found without merit. Such cases have to be withdrawn. This must be done in a time bound fashion.

23. Instruction No. 3 of 2011 is issued subsequent to the aforesaid National Litigation Policy.  A perusal  of  the  aforesaid  policy  makes  it  clear  that  though  the  said instruction  was  issued  as  a  measure  for  reducing  litigation,  it  was  issued  in supersession of the earlier instruction enhancing the monetary limits and prescribing certain conditions.  The very fact  that  clause 11 provides that  this instruction will apply to appeals filed on or after February 9, 2011, and where appeals have been filed before that date, the same will be governed by the instructions on this subject, operative at the time when the said appeal was filed, makes it  clear that the said instruction  is  not  applicable  to  the  pending  proceedings.  The National  Litigation Policy provides that appeals in revenue matters should not be filed if the stakes are not high and are less than that  amount to be fixed by the Revenue authorities, it equally provided that  cases  which are found without merit  should be withdrawn. Similarly, cases  which are covered by the decision of  the courts  also have to be withdrawn. For that purpose, a nodal officer has to be appointed and all  pending cases have to be reviewed and frivolous and vexatious matters have to be filtered from the meritorious cases and the same are withdrawn. In other words, the National Litigation Policy dealt with the pending cases and wanted the pending cases to be reduced by way of withdrawal, so that valuable time of the courts would be spent in resolving other pending cases so as to achieve the goal in the National Legal Mission

to reduce the average pendency from time from 15 years to 3 years.

24. The National Litigation Policy expressly stated that the Government must cease to be a compulsive litigant. The philosophy, that the matters should be left to the courts for ultimate decision is to be discarded and the easy approach that “let the court decide”, must be eschewed and condemned. The Revenue has not applied its mind in this direction. No attempt is made to reduce the pendency of the litigation by filtering frivolous and vexatious matters from meritorious ones and the said cases are withdrawn.  The only  measure  taken for  reducing the  litigation  is,  by raising  the monetary limit. However, as the same is made prospective, it had no application to the pending cases. Therefore, the said Instruction No. 3 of 2011 do not fulfil  the requirement prescribed by the National Litigation Policy. It only partially satisfies the requirement in respect of future litigation. Under the aforesaid instruction, the crucial date is the date of filing of the appeal. It is that date when the tax effect is less than the monetary limit prescribed, the Revenue is precluded from filing such appeals. Though the date of filing of the appeal may be the criteria, that by itself would not provide a rationale sufficient to distinguish between pending cases and cases to be filed in future. The earlier monetary limit was fixed in the year 2005. So it is after six years, the monetary limit is enhanced. If only Instruction No. 3 of 2011 had been made applicable to the pending cases also, as laid down in the National Litigation Policy, the object of the policy would have been fulfilled. One of the ways of giving effect to the said policy is to make that instruction applicable retrospectively to all pending appeals as on the date of the circular. It would substantially serve the object of the policy.\

25. It is in this context, the question arises, when the instruction expressly states that the benefit of the said policy is prospective, still can the courts place a construction on such instruction so as to make it retrospective. In this context, the apex court in the case of  CCE v. Mysore Electricals Industries Ltd. reported in [2006] 204 ELT 517 (SC) : [2007] 8 RC 1, dealing with the question how a beneficial circular is to be construed, has approached this question in the following manner. At paragraph 13 of the judgment, it is stated that the learned counsel further submitted that the circular being oppressive and against  the respondent, has to apply only prospectively and cannot  be  applied  retrospectively. In  other  words,  a  beneficial  circular  has  to  be applied prospectively. Thus, when the circular is against the assessee they have a right to claim the enforcement of the same prospectively. It is further submitted that for  the  period  in  question,  trade  notices  had  been  issued  classifying  the  circuit breakers under heading No. 85.35 or 85.36. When the approved classification was proposed to be revised to reclassify the single panel circuit breakers under heading No.85.37 of the tariff, such re-classification can take effect only prospectively from the date of communication of the show-cause notice proposing reclassification.

26. Following this judgment, the apex court in the case of Suchitra Components Ltd.

v. CCE reported in [2007] 208 ELT 321 (SC) held as under:

“The point raised by the learned counsel for the appellant is covered by the recent judgment of this court in Civil Appeal No. 4488 of 2005. CCE v. Mysore Electricals Industries Ltd. reported in [2006] (204) ELT 517 (SC). In the said judgment, this court held that a beneficial circular has to be applied retrospectively while oppressive circular  has  to  he  applied  prospectively.  Thus,  when  the  circular  is  against  the assessee, they have the right to claim the enforcement of the same prospectively.”

27. In the instant case, Instruction No. 3 of 2011 is more beneficial than Instruction No. 2 of 2005. If Instruction No. 3 of 2011 is also made applicable to the pending appeals before this court, it would grant relief to the assessee. Apart from granting relief to the assessee, if a number of appeals pending before this court are disposed of on the basis of the said circular, the precious time which would be saved by this court could be better utilized for deciding disputes where the tax effect is enormous. That apart, the duration, an appeal takes in this court would be reduced as desired by the National Litigation Policy.

28. It is also not out of context to mention that periodically, the Revenue introduces what is called as the Kar Vivadh Samadhan Scheme and the Voluntary Disclosure of Income Scheme to annul black money and to give benefit to persons who are not prompt in filing returns and paying tax. But unfortunately, persons who are paying tax regularly but have succeeded before the Tribunal in showing that there is no tax liability, are made to face these litigations, instead of concentrating their time and energy in productive work. Under these circumstances, we are of the view that it is settled  law  that  any  notification  issued  under  this  fiscal  legislation  granting exemption  from  payment  of  tax  has  to  be  construed  strictly.  Any circulars/instructions issued conferring the benefit on the assessees who are still to come to the court and who already inside the court, at any rate, if such a benefit is given to the pending matters, it would be only in the nature of one-time settlement, which most of the financial institutions throughout the country extend to defaulters who have borrowed money and who refuse to pay the same.

29.  It  is  also not out of place to mention herein that  Parliament wanted to grant statutory recognition to these orders/instructions/circulars, issued by the Department from time to time retrospectively to take care to protect the interests of the Revenue by introducing sub-sections  (2)  and (3)  in  section  268A of the  Act.  This  benefit conferred  on these  assessees would be  only in  the nature  of  one-time settlement because if the same issue arises for consideration in the subsequent years and the tax effect  is  more  than Rs.  10 lakhs,  it  is  not  open to  them to plead that  either  the Department is estopped from claiming such amount or that the order passed by this court  dismissing  the  appeals  on  the  ground  that  the  tax  effect  being  within  the monetary limit would come in the way of the Department proceeding against the

assessee.  The circular  also makes it  clear  that  in  the pending appeals,  where the constitutional validity of the provisions of the Act or Rule are under challenge, or where  the  Board's  order,  notification,  instruction  or  circular  has  been  held  to  be illegal or ultra vires or whether the Revenue audit objection in the case has been accepted by the Department, notwithstanding the fact that the tax effect is less than the monetary limit fixed under the aforesaid circular, still it is open to the Department to request the court to permit them to prosecute such appeals. Thus, the Department has to apply its mind in all the pending appeals and point out to the court, which are those appeals in which they intend to prosecute. Therefore, sufficient safeguards have been made to protect the interests of the public revenue. By this approach we would be saving the time of the court, the time of the Department and public time in general and giving effect to the Nation Litigation Policy, 2011, so that it can be used for better and productive purpose.”

12. The Division Bench also pointed out the anomaly in the working of the Circular,

were it to apply only prospectively, in the following words:

“31. Yet another anomaly which requires to be noticed is, if a Tribunal where the number of cases which are pending are more, decides the appeal, subsequent to these latest circulars and the amount involved is less than Rs. 10 lakhs, the assessee in such cases get the benefit of the latest circular. However, if the Tribunal has decided a case expeditiously or in Tribunals where the pendency is less and if the subject-matter of the appeal preferred by the Revenue in such cases is more than Rs. 4 lakhs and less than Rs. 10 lakhs, the assessees in those appeals are denied the benefit of the latest circular. In other words, where there is huge pendency of cases in the Tribunal or court, an appeal filed earlier is disposed of after the circular, the benefit accrues to the assessee. However, in Tribunals and the courts where the pendency of cases is less,  an appeal filed recently is decided before the circular or where the assessee co-operates with the court in speed disposal of the appeal and the appeal is disposed of before the date of circular, he is denied the benefit of the circular. Therefore, the benefit to which the assessee is entitled to should not be dependant on the date of the decision, over which neither the assessee nor the Revenue has no control. In this context, the circular would be discriminatory, if it is held to be prospective only. It could be saved from such vice of discrimination by holding it as retrospective.

32. Though Circular/Instruction 3 of 2011 is issued by the Department in pursuance of  the  power  conferred  under  the  statutory  provisions  while  issuing  such circular/instruction, the Department has not kept in mind the object with which such circulars/instructions are issued from time to time. The object sought to be achieved by  such  circulars/instructions  and  also  the  law  declared  by  the  apex  court,  the National Litigation Policy, 2011, as well as the various schemes introduced by the Department granting relief to persons who have not even filed returns and paid taxes,

are  kept  in  mind,  to  bring  the  circular/instruction  in  harmony  with  the  National Litigation  Policy,  it  would  be  appropriate  to  hold  that  the  benefit  of  such circular/instruction also applies to the pending cases in appeal in various courts and Tribunals on the date of the circular/instruction.”

B. Bombay High Court:

13. Commissioner of Income Tax v. Pithwa Engg. Works2:  This judgment of the

Division Bench pertains to the Circular dated 27.3.2000 enhancing the previous

limit but the ratio is the same.

14. In Commissioner of Income Tax v. Madhukar K. Inamdar (HUF)3 the Circular

dated  15.5.2008  was  examined,  opining  that  it  was  in  public  interest  if  the

Revenue concentrates on the cases wherein tax effect is substantially high rather

than running after the assessees wherein the tax impact is less than Rs.4 lakhs,

considering the  cost  of  litigation  and other  administrative  cost  which may  be

much more than the tax recovery, especially in the context of the Circular dated

5.6.2007 requiring the current matters also to be examined.

C & D. Madhya Pradesh High Court & Delhi High Court: 15. In  Commissioner of Income Tax v. Ashok Kumar Manibhai Patel & Co.4 and

Commissioner of Income Tax v. P.S. Jain & Co.5:  In both the above cases, the

Circular in question was dated 27.3.2000, but the ratio is the same.

High Courts of the View that the Circular in question would apply only prospectively:

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A. Punjab & Haryana High Court:

16. In  Commissioner  of  Income  Tax  v.  Varindera  Construction  Co.6 Instruction

No.5/2008  dated  15.5.2008 was  held  to  apply  only  prospectively.  The  Court

disagreed with the view taken by other High Courts to the contra.

B, C & D. Chhattisgarh High Court; Madras High Court & Kerala High Court:

17. In  Commissioner  of  Income  Tax  v.  Navbharat  Explosives  Co.  P.  Ltd.7;

Commissioner of Income Tax v. Kodanand Tea Estates Co8. and CWT v. John

L. Chackola9, the opinion is to the same effect as aforesaid applying the circular

prospectively as they state so.

The view of the Supreme Court:

18. The view adopted by the Delhi  High Court  making the Circular  applicable to

pending matters came up before a three Judge Bench of this Court in SLP(C)

No.CC  13694/2011  titled  CIT  Central-III  v.  Surya  Herbal  Ltd. when  the

following order was passed on 29.8.2011:

“Delay condoned.

Liberty is given to the Department to move the High Court  pointing out that  the Circular dated 9th February, 2011, should not be applied ipso facto, particularly, when the matter has a cascading effect.  There are cases under the Income Tax Act, 1961, in which a common principle may be involved in subsequent group of matters or large number of matters.  In our view, in such cases if attention of the High Court is drawn, the High Court will not apply the circular ipso facto.  For that purpose, liberty

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is granted to the Department to move the High Court in two weeks.

The Special Leave Petition is, accordingly, disposed of.”

19. The aforesaid order, in our view, actually should have laid the controversy to rest.

The retrospective applicability of the Circular dated 9.2.2011 was not interfered

with, but with two caveats – (i) Circular should not be applied by the High Courts

ipso facto when the matter had a cascading effect; (ii) where common principles

may be involved in subsequent group of matters or a large number of matters.  It

was opined that in such cases, the attention of the High Court would be drawn and

the Department was even given liberty to move the High Court in two weeks.  In

our view this order holds the field and should continue to hold the field.

20. Unfortunately, this order was not  brought to the notice of  the subsequent two

Judges Bench of this Court in Commissioner of Income Tax-VII, New Delhi v.

Suman Dhamija10 again arising from a Delhi High Court order, wherein it was

simply  stated  that  since  the  appeals  were  preferred  before  2011  and  the

Instructions were dated 9.2.2011, the earlier cases would not be covered by the

Instruction.  This order in turn had been followed by another two Judges Bench in

Civil Appeal No.16815/2017 titled The Commissioner of Income Tax Bangalore

I & Anr. v. M/s. Gemini Distilleries dated 12.10.2017.

21. Once again, in another matter  Commissioner of Income Tax &Anr. V. Century

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Park11,  the line adopted by the three Judges Bench in  Surya Herbal Ltd. case

(supra) has been followed.

22. We have already given our imprimatur to the observations made by the Karnataka

High Court in a detailed analysis in Ranka & Ranka case (supra), which has dealt

with the litigation policy philosophy behind applying the Circular and the benefit

being extended in view thereof to all Assessees where appeals have been pending,

but below the financial limit, as otherwise an anomalous situation would arise.

23. We may also take note of the judgment of this Court in  Suchitra Components

Ltd. v. Commissioner of Central  Excise, Guntur12 on the general principle of

application  of  Circulars.   Reliance  was  placed  on  the  view  expressed  in

Commissioner of Central  Excise,  Bangalore v. Mysore Electricals Industries

Ltd.13 opining that a beneficial circular has to be applied retrospectively while an

oppressive circular has to be applied prospectively.

24. We are of the view that the matter needs to be put to rest and a clarity be obtained

in view of the impact of this issue on pending cases before the High Courts as

well  as  the  cases  which  have  been  disposed  of  by  various  High  Courts  by

applying the Circular of 2011 to pending litigations.  In our view the matter has

been squarely put to rest taking further care of the interest of the Revenue by the

order passed by the three Judges Bench of this Court in Surya Herbal Ltd. case

(supra), which had put two caveats even to the retrospective application of the 11

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Circular.  The  subsequent  orders  have  been passed by  the  two Judges  Bench

without those orders being brought to the notice of the Court, a duty which was

cast on the Department to have done so to avoid the ambiguity which has arisen.

Thus, the said view of the three Judges Bench would hold water and the Circular

would apply even to pending matters but subject to the two caveats provided in

Surya Herbal Ltd. case (supra).

25. The appeals of the Revenue are, thus, dismissed in the aforesaid terms.

..….….…………………….J.     (Rohinton Fali Nariman)

              ...……………………………J.         (Sanjay Kishan Kaul)

New Delhi. November 23, 2017.

ITEM NO.1501               COURT NO.8               SECTION XIV                S U P R E M E  C O U R T  O F  I N D I A                        RECORD OF PROCEEDINGS C.A. NO. 19650/2017 @ Petition(s) for Special Leave to Appeal (C) No(s).  24055/2013 DIRECTOR OF INCOME TAX NEW DELHI                   Petitioner(s)                                 VERSUS M/S S.R.M.B.DIARY FARMING (P) LTD.                 Respondent(s)

WITH C.A. NO. 19651/2017 @ SLP(C) No. 24056/2013  Date : 23-11-2017 These  matters  were  called  on  for

pronouncement of JUDGMENT today.

For Petitioner(s) Mr. Arijit Prasad, Adv.                      Mrs. Anil Katiyar, AOR                     For Respondent(s) Ms. Sharmila Upadhyay, AOR                    Mr. Kamal Mohan Gupta, AOR                                

* * * * * * * * * * * * *  Hon'ble Mr. Justice Sanjay Kishan Kaul pronounced the Reportable Judgment of the Bench comprising Hon'ble Mr. Justice Rohinton Fali Nariman and His Lordship.   

Leave granted.  The Civil Appeals are dismissed in terms of signed reportable

judgment.   

(SONALI SAUND)                                  (CHANDER BALA) SENIOR PERSONAL ASSISTANT                        COURT MASTER

(signed reportable Judgment is placed on the file)