GOA CARBON LTD. vs. THE ASSISTANT COMMISSIONER OF INCOME TAX, PANAJI

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TXA/4/2008HC BombayHCBM05003198200708 September 2011Author: F. M. REIS,MOHIT S. SHAH, C.J.2 pages
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What did the High Court hold?

The High Court held that the Income Tax Appellate Tribunal was incorrect in classifying the calcined petroleum coke manufactured by the appellant as a 'mineral oil' under Section 80HHC(2)(b) of the Income Tax Act, 1961. The Court followed its previous decision in Tax Appeal No. 13 of 2005 and other connected appeals, which had addressed the same question of law. The reasoning was that the calcined petroleum coke does not fit the definition or common understanding of a 'mineral oil' for the purpose of the said section. Consequently, the question of law was answered in favour of the assessee and against the Revenue. The judgment of the ITAT, which confirmed the order of the Commissioner of Income Tax (under Section 263(1)), was quashed and set aside. No issue was expressly left undecided.

What were the facts?

The appeals were filed by Goa Carbon Ltd. against the Deputy Commissioner of Income Tax and the Assistant Commissioner of Income Tax. The assessment years are not explicitly stated. The appeals challenge orders passed by the Income Tax Appellate Tribunal (ITAT). The core issue revolves around whether calcined petroleum coke manufactured by the appellant qualifies as a 'mineral oil' for the purpose of Section 80HHC of the Income Tax Act, 1961. The appellant is the assessee, and the income tax authorities are the respondent revenue. The procedural history indicates that these appeals raise the same question of law previously decided by a Division Bench of the Bombay High Court in Tax Appeal No. 13 of 2005 and connected appeals.

What were the issues?

1. Whether the calcined petroleum coke manufactured by the appellant is a 'mineral oil' within the meaning of Section 80HHC(2)(b) of the Income Tax Act, 1961? The assessee contends that calcined petroleum coke is not a mineral oil. The revenue's contentions are not explicitly recorded in the judgment, but by implication, they would argue that it is a mineral oil. The Tribunal had previously held that it was a mineral oil. The High Court is deciding the correctness of the Tribunal's holding. The question is one of mixed law and fact, turning on the interpretation of 'mineral oil' in the context of the specific product manufactured by the assessee.

Which sections of the Income-tax Act were involved?

Section 80HHC,Section 260-A,Section 263

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
1 IN THE HIGH COURT OF BOMBAY AT GOA TAX APPEALS NOS.3 & 4 OF 2008 TAX APPEAL NO.3 OF 2008 Goa Carbon Ltd., Dempo House, Campal, Panaji, Goa. …. Appellant V/s The Deputy Commissioner of Income Tax, Panaji, Goa, Having office at Aayakar Bhavan, Patto-Plaza, Panaji-Goa. … Respondent AND TAX APPEAL NO.4 OF 2008 Goa Carbon Ltd., Dempo House, Campal, Panaji, Goa. …. Appellant V/s The Assistant Commissioner of Income Tax, Panaji, Goa, Having office at Aayakar Bhavan, Patto-Plaza, Panaji-Goa. … Respondent Shri Sudin Usgaonkar, Advocate for the Appellant. Mrs. A. Dessai, Advocate for the Respondent. CORAM : MOHIT S. SHAH, C.J. & F.M. REIS, J. DATE : 8th SEPTEMBER, 2011

JUDGMENT : (Per MOHIT S. SHAH, C.J.) These Tax Appeals under Section 260-A of the Income Tax Act, 1961 raises the same question which was raised in Tax Appeal No.13 of 2005 and other connected Tax Appeals, which came to be decided by the Division Bench of this Court, to which one of us

2 was a party (F.M. Reis, J.), by judgment dated 21/10/2010. There is no dispute about the fact that the same questions of law are raised in the present appeals also.

2.

Following the aforesaid decision dated 21/10/2010 in Tax Appeal No.13 of 2005 and other connected Tax Appeals, we allow these appeals and hold that the Income Tax Appellate Tribunal was not right in holding that the calcined petroleum coke manufactured by the appellant was a “mineral oil” within the meaning of Section 80 HHC (2)(b) of the Act. The question of law accordingly is answered in favour of the assessee and against the Revenue. The decision of the Income Tax Appellate Tribunal confirming the order of the Commissioner of Income Tax as also the judgment and order of the Commissioner of Income Tax dated 13/08/2007 under Section 263(1) of the Income Tax Act, 1961 are quashed and set aside.

4.

Both the appeals accordingly stand disposed of. MOHIT S. SHAH, C.J. F.M. REIS, J. NH/-

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