6 Important Supreme Court Judgments July 2, 2019

1. M/s Craft Interiors (P) Ltd. v. The Joint Commissioner of Commercial Taxes (Intelligence), Bangalore

The Karnataka Sales Tax Rules, 1957 - Rule 6(4)(m)(i) read with Explanation III to Rule 6(4) - Validity of - Whether the condition of ‘use in the same form in which such goods are purchased’ under Rule 6(4)(m)(i) of the KST Rules expands the scope of charging section i.e. Section 5B under KST Act, 1957.



What emerges from the scheme of the Act and Rules framed thereunder is that Rule 6(4)(m)(i) purports to grant benefit to the assessee by allowing deductions for the value of goods which have already suffered taxation and which goods substantially retain their original identity while being used in the execution of a works contract. Explanation III to Rule 6(4) clarifies it further by categorically providing that in case the goods are transformed into a different commodity which then is used in the execution of works contract, then the benefit of deduction cannot be availed. [Para 24]

Tax Law - tax provisions granting exemptions/concessions are required to be strictly construed.

There is no variance between Rules 6(4)(m)(i) read with Explanation III and Section 5B of the KST Act, 1957 and what is contended by the appellant in assailing the validity of Rule impugned hereunder is misconceived and without substance. So far as the submissions made by the learned counsel for the appellant on merits in reference to the five impugned notices of provisional assessment served under Section 28(6) is concerned, whether the assessee was eligible under Rule 6(4)(m) (i) is a question of fact which has to be determined in the assessment proceedings and since the provisional assessment has not been finalised due to pendency of the instant proceedings, it may not be advisable for this Court to dilate on the subject issue of the notices served upon the appellant at this stage and leave it open to the appellant to address before the assessing authority in the pending appropriate assessment proceedings, if so advised. [Para 29]

Case Number : C.A. No. 8898 of 2011 02-07-2019
Petitioner's Advocate : Rajesh Mahale
Bench : Hon'ble Mr. Justice A.M. Khanwilkar, Hon'ble Mr. Justice Ajay Rastogi


2. Sunil Vasudeva v. Sunder Gupta

The Code of Civil Procedure, 1908 - Order 47 Rule 1 - Review - The basic principles in which the review application could be entertained.

The following grounds of review are maintainable as stipulated by the statute: 

When the review will be maintainable

1. Discovery of new and important matter or evidence which, after the exercise of due diligence, was not within knowledge of the petitioner or could not be produced by him; 

2. Mistake or error apparent on the face of the record; 

3. Any other sufficient reason. 

The words “any other sufficient reason” have been interpreted in Chhajju Ram v. Neki [(1921-22) 49 IA 144 and approved by this Court in Moran Mar Basselios Catholicos v. Most Rev. Mar Poulose Athanasius AIR 1954 SC 526 to mean “a reason sufficient on grounds at least analogous to those specified in the rule”. The same principles have been reiterated in Union of India v. Sandur Manganese & Iron Ores Ltd. (2013) 8 SCC 337.


When the review will not be maintainable

1. A repetition of old and overruled argument is not enough to reopen concluded adjudications. 

2. Minor mistakes of inconsequential import. 

3. Review proceedings cannot be equated with the original hearing of the case. 

4. Review is not maintainable unless the material error, manifest on the face of the order, undermines its soundness or results in miscarriage of justice. 

5. A review is by no means an appeal in disguise whereby an erroneous decision is reheard and corrected but lies only for patent error. 

6. The mere possibility of two views on the subject cannot be a ground for review. 

7. The error apparent on the face of the record should not be an error which has to be fished out and searched. 

8. The appreciation of evidence on record is fully within the domain of the appellate court, it cannot be permitted to be advanced in the review petition. 

9. Review is not maintainable when the same relief sought at the time of arguing the main matter had been negatived.

Case Number : C.A. No. 5140 of 2019 02-07-2019
Petitioner's Advocate : Vikas Mehta
Bench : Hon'ble Mr. Justice A.M. Khanwilkar, Hon'ble Mr. Justice Ajay Rastogi

3. Sundar Gupta v. Sunil Vasudeva

In view of the order passed in Civil Appeal arising out of SLP(C ) No. 5449 of 2015 dated 2nd July, 2019, contempt petition has become infructuous and is accordingly dismissed.

Case Number : Conmt. Pet. (C) No. 1721 of 2017 02-07-2019
Petitioner's Advocate : Ranjan Mukherjee
Bench : Hon'ble Mr. Justice A.M. Khanwilkar, Hon'ble Mr. Justice Ajay Rastogi

4. M/s. Adani Power (Mundra) Ltd. v. Gujarat Electricity Regulatory Commission

Agreement - the clauses in the agreement ought to be given the plain, literal and grammatical meaning of the expression used in the same. No doubt, that the courts will also try to gather as to what intention the parties wanted to give them.

Principle of Business Efficacy

The principle of business efficacy could be invoked only if by a plain literal interpretation of the term in the agreement or the contract, it is not possible to achieve the result or the consequence intended by the parties acting as prudent businessmen. This test requires that a term can only be implied, if it is necessary to give business efficacy to the contract, to avoid such a failure of consideration that the parties cannot as reasonable businessmen have intended. If the contract makes business sense without the term, the courts will not imply the same. It is amply clear that courts can imply a clause only if it is found that the plain and literal meaning given to the expression used in the terms is not in a position to make out the intention of the parties. Reading an unexpressed term in an agreement would be justified on the basis that such a term was always and obviously intended by and between the parties thereto. An unexpressed term can be implied if and only if the court finds that the parties must have intended that term to form part of their contract. It is not enough for the court to find that such a term would have been adopted by the parties as reasonable men if it had been suggested to them. It must have been a term that went without saying, a term necessary to give business efficacy to the contract, a term which, although tacit, forms part of the contract. For invoking the business efficacy test and carving out an implied condition, not expressly found in the language of the contract, the following five conditions will have to be satisfied: (1) Reasonable and equitable; (2) Necessary to give business efficacy to the contract; (3) It goes without saying i.e. the Officious Bystander Test; (4) Capable of clear expression; and (5) Must not contradict any express term of the contract.

Case Number : C.A. No. 11133 of 2011 02-07-2019
Petitioner's Advocate : Praveen Kumar
Respondent's Advocate : Hemantika Wahi
Bench : Hon'ble Mr. Justice Arun Mishra, Hon'ble Mr. Justice B.R. Gavai, Hon'ble Mr. Justice Surya Kant 
Judgment By : Hon'ble Mr. Justice B.R. Gavai

5. M/s Star Wire (India) Vidyut Pvt. Ltd. v. Haryana Electricity Regulatory Commission

Judicial Review - the challenge to the validity of the regulations can be decided only in judicial review proceedings before the courts and not by way of appeal or review.

The Haryana Electricity Regulatory Commission (Terms and Conditions for determination of Tariff from Renewable Energy Sources, Renewable Purchase Obligation and Renewable Energy Certificate) Regulations, 2010

Case Number : C.A. No. 5139 of 2019 02-07-2019
Petitioner's Advocate : P.S. Sudheer
Bench : Hon'ble Mr. Justice A.M. Khanwilkar, Hon'ble Mr. Justice Ajay Rastogi
Judgment By : Hon'ble Mr. Justice A.M. Khanwilkar

6. Dalbir Singh v. Union of India

Army Law - In the matter of protecting the border, a soldier cannot live merely on past glory but should rise to the occasion on every occasion to defend the integrity of the nation since such is the trust reposed in a soldier.

Army Act, 1950 - Section 34 (c) - Summary General Court Martial (SGCM) - Though in service matters the past conduct, both positive and negative will be relevant not only while referring to the misconduct but also in deciding the proportionality of the punishment, the Court should be cautious while considering the case of an officer / soldier / employee of a disciplined force and the same yardstick or sympathetic consideration as in other cases cannot be applied.

The resources of the country are spent on training a soldier to retaliate and fight when the integrity of the nation is threatened and there is aggression. In such grave situation if a soldier turns his back to the challenge, it will certainly amount to cowardice. If in that background, the action taken against the appellant is taken note, we are of the opinion, that the SGCM and the Armed Forces Tribunal were justified.

Case Number : C.A. No. 9885 of 2011 02-07-2019
Petitioner's Advocate : Ravindra Keshavrao Adsure
Bench : Hon'ble Mrs. Justice R. Banumathi, Hon'ble Mr. Justice A.S. Bopanna
Judgment By : Hon'ble Mr. Justice A.S. Bopanna

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