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TMI Blog2004 (2) TMI 642X X X X Extracts X X X X X X X X Extracts X X X X ..... machinery purchased and put to use during the previous year relevant to the said assessment year. Contention of the assessee was that it is not merely a blender of tea, it produces a new and distinct type of tea having a pre-determined quality in terms of test, liquor, aroma and hygienically packed through mechanical contrivances which the assessee markets in packet and under different brand names and therefore, the assessee should be considered not only as a blender of tea but also a manufacturer or at least a producer of certain types of tea in packed condition. Argument advanced by the learned counsel for the appellant was only to the aforesaid aspect and therefore facts relating to items other than tea need not be discussed here. 3. The Assessing Officer held that at best the assessee can be considered to be engaged in processing only for which deduction for investment allowance under Section 32A of the Act would not be available and accordingly the claim of the assessee towards the same was not entertained by the Assessing Officer. 4. Assessee preferred an appeal which was dismissed. Further appeal filed by the assessee before the Tribunal having also failed, the presen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mercantile Construction Co. reported in 74 Taxman 41, Khalsa Brothers v. Commissioner of Income Tax reported in 217 ITR 185 and Commissioner of Income Tax v. G.S. Atwal Co. (GUA) reported in 254 ITR 592 in Special reference was made on the the judgment of Division Bench of this Court in the case of G.A. Renderian Ltd. (supra). 7. Mr. Kapoor learned counsel appearing for the revenue contended that in the present case admittedly even after completion of the process undertaken by the assessee tea remained tea and there was no new product and therefore, the assessee could not have been held to be involved in any manufacturing process or in production. 8. With regard to the judgment of the Division Bench of Karnataka High Court, it has been contended that the said law does not become a declaration of law by the Apex Court when the Special Leave Petition filed against said judgment was dismissed on merit. 9. Reliance was placed on behalf of the revenue on the judgment in the case of Kunhay Ahmed v. State of Kerala reported in 2001 (129) E.L.T. 11 (S.C.) = 2000 (6) SCC 359 and Supreme Court Employees Welfare Association v. Union of India reported in AIR 1990 SC 334. 10. In re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hines ensuring unadulterated blended tea in order to maintain its basic qualities and properties like colour and flavour for longer period. It is also not in dispute that the packaged blended tea so produced has its own price structure much higher than the blended tea available in loose or ordinary packings with distinct class of customers and having all together different commercial incidents as has been placed on record before the assessing authority and the Tribunal by way of affidavits and statements of the technical experts, wholesalers, bulk consumers and retailers. 50. For the said reasons, keeping in view the law laid down in the Ujjagar Singh s case and the uncontroverted facts brought on record, it is quite permissible to take it as a possible view that the packaged blended tea produced in the industrial unit of the petitioner is a manufactured product, the contributing inputs being garden teas of various colour and flavour and the packing materials. 14. Another Division Bench of this court in the case of Appeejay Pvt. Ltd. (supra) while considering the similar aspect took into consideration a similar business of blending different types of tea and sale them so blend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ehalf of the assessee, it is contended the Special Leave Petition against the judgment of the Division Bench of Karnataka High Court was dismissed with the following order : Delay condoned. The Special Leave Petitions are dismissed on merits. 16. The learned counsel for the assessee contended that when the Apex Court dismissed the special leave petitions specially mentioning that it was being dismissed on merits, it has only one meaning that the Apex Court approved the finding recorded in the impugned judgment on merit and therefore, the judgment of the Division Bench of Karnataka High Court got the stamp of approval from the Apex Court and therefore, is a law declared within the meaning of Article 141 of the Constitution of India. 17. But law in this regard appears to have been settled by the Apex Court in the case of Kunhay Ahmed (supra) holding, inter alia, as follows : 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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. * * * * 44. To sum up, our conclusions are : * * * * (iv) An order refusing special leave to appeal may be a non-speaking order or a speaking one. In either case it does not attract the doctrine of merger. An order refusing special leave to appeal does not stand substituted in place of the order under challenge. All that it means is that the Court was not inclined to exercise its discretion so as to allow the appeal being filed. (v) If the order refusing leave to appeal is a speaking order, i.e., given reasons for refusin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al background. As the present case in hand does appear to involve all facts similar as were involved in the Karnataka case, the said judgment does not apply. 20. In above view of the law as it stands settled, the dismissal of special leave petition even on merit in respect of the judgment of the Division Bench of Karnataka High Court did not amount to a declaration of law by the Apex Court thereby making it binding under Article 141 of the Constitution as has been held in the case of Kunhay Ahmed (supra) and Supreme Court Employees Welfare Association (supra). In such circumstances, the finding of the co-ordinate Bench of this court in the case of Appeejay Pvt. Ltd (supra) being binding on this Court while deciding the present appeal and as the facts available in the case decided by the Division Bench of Karnataka High Court including the fact of user of sophisticated mechanical process and electro-mechanical weighers being not available in present case, we hold that the assessee is not entitled to deduction for investment allowance under Section 32A of the Income Tax Act, 1961 as the assessee cannot be held to be a manufacturer or producer in the facts available. Therefore, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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