SC : Uncertainty looms as Justice Kaul holds CBDT's appeal filing circular 'retrospective'

SC division bench of Justice Sanjay Kishan Kaul & Justice Rohinton Nariman departs from recent co-ordinate bench ruling in Gemini Distilleries,  dismisses Revenue's appeal to hold that CBDT Instruction 3/2011 (laying down monetary appeal filing limits for Revenue’s appeals) is retrospective;  SC rules that the circular would apply even to pending matters but subject to the two caveats as provided in the  three judge ruling of the apex court in Surya Herbal Ltd., namely  (i) Circular should not be applied by High Courts ipso facto when the matter had a cascading effect and (ii) where common principles may be involved in subsequent group of matters or a large number of matters; SC observes that this larger bench ruling “actually should have laid the controversy to rest.”, but notes that the Surya Herbal ruling was not brought to the notice of the co-ordinate bench in Suman Dhameja case (wherein it was held that CBDT's 2011 instruction is not retrospective in nature) and the recent Gemini Distilleries case (which merely followed Suman Dhameja case); Further, taking note of divergent views by various high courts on this issue, SC approves Karnataka HC ruling in Ranka & Ranka  wherein it was held that to bring the circular/instruction in harmony with the National Litigation Policy, it would be appropriate to hold that the such circular/instruction also applies to the pending cases as otherwise an anomalous situation would arise; SC also acknowledges that to bring down the pendency of cases and get meaningful issues decided from the judicial forums, CBDT (from time to time) has come out with administrative circulars/notifications for the Department not to litigate where the revenue impact is low; SC relies on co-ordinate bench ruling in Suchitra Components Ltd. and Mysore Electricals Industries Ltd. to hold that  a beneficial circular has to be applied retrospectively:SC