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TMI Blog2004 (2) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... et tea, conventional and instant coffee, oleo resins, meat products and marine products. On March 7, 1994, Lipton India Ltd. was amalgamated with Brooke Bond India Ltd. and the amalgamated company changed its name to Brooke Bond Lipton India Ltd. which has since amalgamated with the Hindustan Lever Ltd. For the assessment year 1984-85, the assessee made a claim for deduction in respect of investment allowance of Rs. 91,84,078 under section 32A of the Income-tax Act, 1961, in respect of new machinery purchased and put to use during the previous year relevant to the said assessment year. The 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 taste, liquor, aroma and hygienically packed through mechanical contrivances which the assessee markets in packets 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. An argument advanced by learned counsel for the appellant was only to the aforesaid aspect and therefore the facts relating t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R 105 (SC); Chrestien Mica Industries Ltd. v. State of Bihar [1961] 12 STC 150 (SC); CIT v. N. C. Budharaja and Co. [1993] 204 ITR 412 (SC); North Bengal Stores Ltd. v. Member, Board of Revenue [1938-50] 1 STC 157 (Cal); Brooke Bond India Ltd. v. Union of India [1988] 34 ELT 590 (Cal); CIT v. Mercantile Construction Co. [1994] 74 Taxman 41 (Cal); Khalsa Brothers v. CIT [1996] 217 ITR 185 (Cal) and CIT v. G. S. Atwal and Co. (GUA) [2002] 254 ITR 592 (Cal). Special reference was made on the judgment of the Division Bench of this court in the case of G. A. Renderian Ltd. [1984] 145 ITR 387 (Cal). 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. With regard to the judgment of the Division Bench of the 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 the said judgment was dismissed on the merits. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... back to the facts of the present case, as noticed above, the industrial unit of the petitioner produces blended tea packages by the operation of modern automatic machines 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 altogether 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 Ujagar 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." Another Division Bench of this court in the case of Aippeejay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the view taken by the Division Bench of this court will be having a binding effect as a decision of a coordinate Bench of the same High Court. But on behalf of the assessee, it is contended that the special leave petition against the judgment of the Division Bench of the Karnataka High Court was dismissed with the following order: "Delay condoned. The special leave petitions are dismissed on merits." Learned counsel for the assessee contended that when the apex court dismissed the special leave petitions specially mentioning that it was being dismissed on the merits, it has only one meaning that the apex court approved the finding recorded in the impugned judgment on the merits and, therefore, the judgment of the Division Bench of the 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. But the law in this regard appears to have been settled by the apex court in the case of Kunhayammed v. State of Kerala [2000] 245 ITR 360 holding, inter alia, as follows: "A petition seeking grant of special leave to appeal may be rejected for several reasons. For example, it ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve and are stated in the order still the order remains one rejecting the prayer for the grant of leave to appeal. The petitioner has been turned away at the threshold without having been allowed to enter in the appellate jurisdiction of this court. Here also the doctrine of 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 it 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 . . . 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the rejection of the special leave petition on the merits had a binding effect. It appears that in the same factual background dismissal of the special leave petition in one case was held to be having a binding effect in the subsequent litigations in the same factual background. As the present case in hand does not appear to involve all facts similar as were involved in the Karnataka case, the said judgment does not apply. In the above view of the law as it stands settled, the dismissal of the special leave petition even on the merits in respect of the judgment of the Division Bench of the 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 Kunhayammed [2000] 245 ITR 360 (SC) and Supreme Court Employees' Welfare Association, AIR 1990 SC 334. In such circumstances, the finding of the co-ordinate Bench of this court in the case of Appeejay Pvt. Ltd. [1994] 206 ITR 367 being binding on this court while deciding the present appeal and as the facts available in the case decided by the Division Bench of the Karnataka High Court including the fact of user of sophis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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