| Case ID |
67d8e6fc-8ca6-4b00-819b-e1d437a283d9 |
| Body |
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| Case Number |
CIVIL APPEAL No. 1520 OF 1981 |
| Decision Date |
Apr 29, 1981 |
| Hearing Date |
|
| Decision |
The Supreme Court ruled that the question of whether Nylon-6 is classified as a 'petrochemical' under the Income-tax Act is a factual determination rather than a legal one. The court emphasized that the finding of the Tribunal, which had previously established Nylon-6 as a 'petrochemical', had acquired finality. As such, the High Court's decision to call for a reference on this matter was erroneous. The court ultimately allowed the appeal, set aside the High Court's order, and dismissed the reference application. This ruling reaffirmed the Tribunal's authority in determining factual issues without legal interference. |
| Summary |
In the landmark case of J.K. Synthetics Ltd. v. Commissioner of Income Tax, the Supreme Court of India addressed the classification of Nylon-6 as a 'petrochemical' under the Income-tax Act, 1961. The case stemmed from a dispute over the eligibility of the company for development rebates and deductions under sections 33 and 80-I of the Act for the assessment year 1968-69. The Tribunal had previously ruled in favor of the company, affirming that Nylon-6 qualifies as a petrochemical and thus entitled to tax benefits. However, the Additional Commissioner rejected this claim, prompting the company to appeal. The Supreme Court highlighted the distinction between factual and legal questions, concluding that the issue at hand was factual. This decision is significant for tax law and the interpretation of the Income-tax Act, affirming the Tribunal's role in determining factual questions related to tax benefits. Legal practitioners and businesses involved in manufacturing and tax compliance will find this ruling particularly relevant, as it sets a precedent for similar cases regarding the classification of products for tax purposes. The case underscores the importance of clarity in legal definitions and the role of tribunals in tax-related disputes. |
| Court |
Supreme Court of India
|
| Entities Involved |
Commissioner of Income Tax,
J.K. Synthetics Ltd.
|
| Judges |
P.N. Bhagwati,
R.S. Pathak
|
| Lawyers |
N.A. Palkhivala,
S.P. Mehta,
H.P. Ranina,
Ravindra Narain,
Mrs. A.K. Verma,
Talat Ansari,
A.N. Haksar,
Ramesh Diwan,
Miss Arti Mehta,
Lal Narayan Sinha,
B.B. Ahuja,
Miss A. Subhashini
|
| Petitioners |
J.K. Synthetics Ltd.
|
| Respondents |
Commissioner of Income Tax
|
| Citations |
1981 SLD 1748,
(1981) 130 ITR 23
|
| Other Citations |
CIT v. Nirlon Synthetic Fibres and Chemicals Ltd. [1981] 130 ITR 14 (SC)
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
33,
80-I
|