Whether judgment is fit to be recalled by HC when it was given without framing substantial questions of law - YES: Supreme Court

THE issue before the Supreme Court is - Whether a judgment is fit to be recalled by the High Court when it was given without framing the substantial questions of law. The verdict was YES.

Facts of the assessee

The assessee had claimed deductions u/s 80IB of the Income Tax Act and availed transport subsidies along with other incentives. The matter went into dispute and the appeal went upto the High Court of Guwahati. The High Court in its judgment dated 16.09.2010 answered the first question in favour of Revenue, and the second question was answered in favour of the assessee. The assessee filed a review petition before the same Division Bench of the High Court and the Court recalled its earlier judgment dated 16.09.10 in the judgment dated 08.04.13 on the ground that the Court did not formulate the substantial questions of law for adjudication before hearing of the appeal on merit. Hence, this appeal by the Revenue.

Supreme Court held that,

++ by the review order dated 08.04.2013, the Division Bench felt that it should not have gone into the matter at all given the fact that on an earlier occasion, before 16.09.2010, it had reserved judgment on whether substantial questions of law in fact exist at all or not. On the issue of review powers of the High Court under section 260A, the Supreme Court held that on a cursory reading of Section 260A (7), the said Section does not purport in any manner to curtail or restrict the application of the provisions of the Code of Civil Procedure. Section 260A(7) only states that all the provisions that would apply qua appeals in the Code of Civil Procedure would apply to appeals under Section 260A. The review power of High Court lies in its inherent jurisdiction and is not curtailed in any manner by section 260A.