COLUMBIA SPORTSWEAR COMPANYversusDIRECTOR OF INCOME TAX, BANGALORE

                    [2012] 7 S.C.R. 187


          COLUMBIA SPORTSWEAR COMPANY                         A
                             v.
       DIRECTOR OF INCOME TAX, BANGALORE
      (Special Leave Petition (C) No. 31543 of 2011)
                      JULY 30, 2012
                                                              B
 [S.H. KAPADIA, CJI, A.K. PATNAIK AND SWATANTER
                    KUMAR, JJ.]

     Income Tax Act, 1961 - Chapter XIX-B; Sections 245N(a}
and 245S - Authority for Advance Rulings (Income Tax) - C
Whether an advance ruling pronounced by the Authority can
be challenged u!Article 2261227 of the Constitution before the
High Court or u!Article 136 of the Constitution before the
Supreme Court - Whether the Authority, if not a court, is a
tribunal within the meaning of expression in Articles 136 and D
227 of the Constitution and whether the Authority has a duty
to act judicially and is amenable to writs of Certiorari and
Prohibition u!Article 226 of the Constitution - Held: The
Authority is a body exercising judicial power conferred on it
by Chapter XIX-B of the Act and is a tribunal within the E
meaning of the expression in Articles 136 and 227 of the
Constitution - Sub-section (1) of s.245S of the Act, insofar as,
it makes the advance ruling of the Authority binding on the
applicant, in respect of the transaction and on the
Commissioner and income-tax authorities subordinate to F
him, does not bar the jurisdiction of Supreme Court u/Article
136 of the Constitution or the jurisdiction of the High Court ul
Articles 226 and 227 of the Constitution to entertain a
challenge to the advance ruling of the Authority - It cannot be
held that an advance ruling of the Authority can only be G
challenged u!Article 136 of the Constitution before Supreme
Court and not u!Articles 226 and/or 227 of the Constitution
?efore the High Court - However, when an advance ruling of
 he Authority is challenged before the High Court u!Articles
                            187                               H
    188      SUPREME COURT REPORTS               [2012] 7 S.C.R.

A 226 and/or 227 of the Constitution, the same should be heard
  directly by a Division Bench of the High Court and decided
  expeditiously- Even if good grounds are made out in a SLP
  u!Article 136 for challenge to an advance ruling given by the
  Authority, the Supreme Court may still, in its discretion, refuse
B to grant special leave on the ground that the challenge to the
  advance ruling of the authority can also be made to the High
  Court u!Artic/es 226 and/or 227 of the Constitution on the self
  same grounds - Unless, a SLP raises substantial questions
  of general importance or a similar question is already pending
c before the Supreme Court for decision, the Supreme Court
  does not entertain a SLP directly against an order of the
  tribunal - The instant SLP neither raised any substantial
  question of general importance nor was it shown that a similar
  question was already pending before the Supreme Court for
  which the petitioner should be permitted to approach the
0
  Supreme Court directly against the advance ruling of the
  Authority - Instant SLP accordingly disposed of with liberty to
  the petitioner to move the appropriate High Court u/Article 226
  and/or 227 of the Constitution - High Court concerned to
E ensure that the Writ Petition, if filed, is heard by the Division
  Bench hearing income-tax matters and is disposed of
  expeditiously - Constitution of India, 1950 - Articles 136, 226
  and 227.

      Kihoto Hollohan v. Zachil/hu and Others 1992 Supp (2)
F SCC 651: 1992 (1) SCR 686; Jyotendrasinhji v. S.I. Tripathi
  and Others 1993 Supp (3) SCC 389: 1993 (2) SCR 938; L.
  Chandra Kumar v. Union of India and Others (1997) 3 SCC
  261: 1997 (2) SCR 1186 and Sirpur Paper Mills Ltd. v.
  Commissioner of Wealth Tax, Hyderabad AIR 1970 SC
G 1520: 1971 (1) SCR 304 - relied on.

        Durga Shankar Mehta v. Thakur Raghuraj Singh and
    Others (1955) 1 SCR 267 and Union of India & Anr. v. Azadi
    Bachao Ando/an & Anr. (2003) 263 ITR 706 - referred to.
H
COLUMBIA SPORTSWEAR COMPANY v. DIRECTOR 189
        OF INCOME TAX, BANGALORE
    Cyril Eugene Pereira, In re. (1999) 239 ITR 650 and              A
Groupe Industrial Marcel Dassault, In re (2012) 340 ITR 353
(AAR) - referred to.

    "Constitutional Law of India" (Fourth Edition) by H.M.
Seervai - referred to.                                               B

     Words and Phrases - Expression "tribunal" - Meaning of
- Held: The test for determining whether a body is a tribunal
or not is to find out whether it is vested with the judicial power
of the State by any law to pronounce upon rights or liabilities
arising out of some special law.                                     C
    Harinagar Sugar Mills v. Shyam Sunder AIR 1961 S.C.
1669: 1962 SCR 339; Jaswant Sugar Mills Ltd. v. Lakshmi
Chand & Ors. AIR 1963 SC 677: 1963 Suppl. SCR 242;
Associated Cement Companies Ltd. v. P.N. Sharma & Anr.               D
AIR 1965 SC 1595: 1965 SCR 366; Union of India v. R.
Gandhi, President, Madras Bar Association (2010) 11 · SCC
1: 2010 (6) SCR 857 - relied on.

                       Case Law Reference:
                                                                     E
     (1955) 1 SCR 267           referred to           Para 5

    1992 (1) SCR 686            relied on             Para 5

    1993 (2) SCR 938            relied on             Para 5
                                                                     F
    1997 (2) SCR 1186           relied on             Para 5

    1962 SCR 339                relied on             Para 7

    1963 Suppl. SCR 242 relied on                     Para 7
                                                                     G
    1965 SCR 366                relied on             Para 7

    2010 (6) SCR 857            relied on             Para 7

    (1999) 239 ITR 650          referred to           Para 9
                                                                     H
    190       SUPREME COURT REPORTS                 [2012] 7 S.C.R.


A         (2003) 263 ITR 706        referred to           Para 9

          (2012) 340 ITR 353        referred to           Para 12

          1971 (1) SCR 304          relied on             Para 13

B       CIVIL APPELLATE JURISDICTION : SLP (Civil) No.
    31543 of 2011 etc.

        From the Judgment & Order dated 08.08.2011 of the
    Authority for.Advanced Rulings (Income Tax}, New Delhi in MR
c   No. 862 of 2009.
                                    WITH
    SLP (C) Nos. 3318 & 13760 of 2011, C.A. Nos. 2996, 5839
    of 2008, 6987 of 2010 & 7035, 10064, 11327, 9768 & 9775
    of 2011.
D
      Mohan Parasaran, Gaurab Banerjee, ASG, Harish N.
  Salve, Ambhoj Kumar Sinha, Nageswar Rao, Shayari, Sumit
  Goel, Nishith Desai, Ashish Kabra, Shashank Kunwar, Ekansh
  Mishra, Dhruv Sanghvi, Pratibha Jain (for Parekh & Co.),
E Mukesh Butani, H. Raghavendra Rao, Arijit Prasad, Rahul
  Yadav, Mahesh Agarwal, Rishi Agrawala, E.G. Agrawala, Neha
  Nagpal, Nakul Mohta, Shikha Sarin, D.L. Chidananda, Gaurav
  Dhigra, A.K. Srivastava, Vikas Malhotra, Anil Katiyar (for B.V.
  Balaram Das}, Vanita Bhargava, Ajay Bhargava, Sanjay
F Shanghvi, Nitin Mishra (for Khaitan & Co.), F.V. Irani, Rustom
  B. Hathikhanawala, Balbir Singh, Rupender Sinhmar, Abhishek
  Singh Baghel, Deepal, Rajesh Kumar, Kamal Mohan Gupta,
  Vivek B. Saharya, Vishnu B. Saharya, V.B. Saharya (for
  Saharya and Co.) for the appearing parties.

G         The order of the Court was delivered by

          A.K. PATNAIK, J.

    SPECIAL LEAVE PETITION (C) No. 31543 of 2011:

H         1. This is a petition under Article 136 of the Constitution
COLUMBIA SPORTSWEAR COMPANY v. DIRECTOR 191
 OF INCOME TAX, BANGALORE [A.K. PATNAIK, J.]
of India seeking special leave to appeal against the order dated      A
08.08.2011 of the Authority for Advance Rulings (Income Tax)
constituted under Chapter XIX-B of the Income Tax Act, 1961
(for short 'the Act') in A.A.R. No.862 of 2009.

     2. The petitioner is a company incorporated in the United        B
States of America (for short 'the USA') and is engaged in the
business of designing, developing, marketing and distributing
outdoor apparel. For making purchases for its business, the
petitioner established a liaison office in Chennai with the
permission of the Reserve Bank of India (for short 'the RBI') in      C
1995. The RBI granted the permission in its letter dated
01.03.1995 subject to the conditions stipulated therein. The
permission letter dated 01.03.1995 of the RBI stated that the
liaison office of the petitioner was for the purpose of
undertaking purely liaison activities viz. to inspect the quality,
to ensure shipments and to act as a communication channel             D
between head office and parties in India and except such
liaison work, the liaison office will not undertake any other
activity of a trading, commercial or industrial nature nor shall it
enter into any business contracts in its own name without the
prior permission of the RBI. The petitioner also obtained             E
permission on 19.06.2000 from the RBI for opening an
additional liaison office in Bangalore on the same terms and
conditions as mentioned in the letter dated 01.03.1995 of the
RBI.
                                                                      F
     3. On 10.12.2009, the petitioner filed an application before
the Authority for Advance Rulings (for short 'the Authority') on
the questions relating to its transactions in its liaison office in
India set out in Annexure-11 to the application. Questions No. 1
to 6 as set out in Annexure-11 to the application of the petitioner   G
before the Authority are extracted hereinbelow:

     "1. Whether based on the nature of activities carried on
     by the Liaison Office ['India LO'] of the Applicant in India,
     as listed in the Statement of relevant facts [Annexure 111],
                                                                      H
    192        SUPREME COURT REPORTS                [2012] 7 S.C.R.


A         any income accrues or arises in India as· per Section
          5(2)98) of the Act?

          2. Whether based on the nature of activities carried on by
          the India LO, as listed in the Statement of relevant facts
          [Annexure 111], the Applicant can be said to have a business
B
          connection in India as per the provisions of Section 9(1)(i)
          of Act read with its Explanation 2?

          3. If the answer to Query 2 is in the affirmative, whether
          various activities carried out by the India LO, as listed in
c         the Statement of relevant facts [Annexure Ill], are covered
          under the phrase 'through or from operations which are
          confined to the purchase of goods in India for the purpose
          of export' as stated in part (b) of Explanation 1 to Section
          9( 1)(i) of the Act?
D
          4. If the answer to Query 3 is in the negative, how would
          the profits attributable to the 'operations in India' be
          determined and what would be the broad principles to be
          borne in mind for attributing income to the India LO?
E     5. Whether the India LO creates a permanent
      establishment ['PE'] for the Applicant in India under Article
      5(1) of the Agreement for Avoidance of Double Taxation
      and Prevention of Fiscal Evasion with respect to Taxes on
      Income and Capital Gains entered into between the
F     Government of the Republic of India and the Government
      of the United States of America ['Treaty') read with the PE
      exclusion available for purchase function in terms of
      paragraph 3(d) of Article 5 of the Treaty?

G     6. If the answer to Query 5 is in the affirmative, how would
      the profits attributable to the PE in India be determined and
      what would be the broad principles to be borne in mind
      for attributing income to India LO under the Treaty?'

      4. The respondent filed his reply dated 10.12.2010 to the
H
COLUMBIA SPORTSWEAR COMPANY v. DIRECTOR 193
 OF INCOME TAX, BANGALORE [A.K. PATNAIK, J.]
aforesaid application of the petitioner before the Authority. The     A
petitioner also filed its response dated 08.02.2011 to the reply
of the respondent. The Authority heard the petitioner and the
respondent and passed the impugned order dated 08.08.2011.
In para 34 of the impugned order, the Authority gave its ruling
on the six questions as follows:                                      B

     "(1) A portion of the income of the business of designing,
     manufacturing and sale of the products imported by the
     applicant from India accrues to the applicant in India.

     (2) The applicant has a business connection in India being       C
     its liaison office located in India.

     (3) The activities of the Liaison Office in India are not
     confined to the purchase of goods in India for the purpose
     of export.                                                       D

     (4) The income taxable in India will be only that part of the
     income that can be attributed to the operations carried out
     in India. This is a matter of computation.

     (5) The Indian Liaison Office involves a 'Permanent              E
     Establishment' for the applicant under Article 5.1 of the
     DTAA.

     (6) In terms of Article 7 of the DTAA only the income
     attributable to the Liaison Office of the applicant is taxable
                                                                      F
     in India."

Aggrieved, the petitioner has challenged the impugned order
on various grounds mentioned in this special leave petition.

     5. On 10.02.2012, we passed orders calling upon the              G
.earned counsel for the parties to first address us on the
question of maintainability of special leave petitions filed either
by the assessee or by the Department against the advance
rulings of the Authority. Learned counsel for the parties referred
to the provisions of Chapter XIX-8 of the Act to show that the        H
    194       SUPREME COURT REPORTS                  [2012] 7 S.C.R.


A Authority is a quasi-judicial Tribunal. They submitted that the
   order of the Authority is an adjudicating order determining a
   question of law or fact specified in the application and sub-
   section (5) of Section 245R mandates compliance with the
   principles of natural justice. They further submitted that the
B Authority is also vested with the powers of a civil court in relation
   to the discovery and inspection, enforcing the attendance of
   persons and examining them on oath and compelling the
   production of books of account, etc. They argued that as the
   Authority is a quasi-judicial Tribunal, its orders can be
c  challenged before the High Court by way of judicial review
   under Article 226/227 of the Constitution or before this Court
   by way of an appeal under Article 136 of the Constitution. They
   submitted that this Court may, however, decline to interfere with
  the order passed by the Authority in exercise of its powers under
  Article 136 of the Constitution where it feels that it would be
0
  more appropriate that the order of the Authority must first be
  examined by the High Court under Article 226/227 of the
  Constitution. They relied upon the decision of this Court in
  Durga Shankar Mehta v. Thakur Raghuraj Singh and Others
  [(1955) 1 SCR 267] in which it has been held that the
E expression "Tribunal" used in Article 136 of the Constitution
  includes, within its ambit all adjudicating bodies, provided they
  are created by the State and are invested with judicial as
  distinguished from purely administrative or executive functions.
  They cited the decisions of this Court in Kihoto Hollohan v.
F Zachillhu and Others [1992 Supp (2) SCC 651],
  Jyotendrasinhji v. S.I. Tripathi and Others [1993 Supp (3) SCC
  389], L. Chandra Kumar v. Union of India and Others [(1997)
  3 SCC 261] and Union of India v. R. Gandhi, President,
  Madras Bar Association [(2010) 11 SCC 1] in support of their
G submission that where a tribunal is constituted by an Act of the
  legislature for adjudicating any particular matter, the power of
  the constitutional courts under Article 226/227 or 136 is not
  ousted even if the Act makes the decision of the tribunal final.

H       6. The preliminary question that we have to decide is
COLUMBIA SPORTSWEAR COMPANY v. DIRECTOR 195
 OF INCOME TAX, BANGALORE [A.K. PATNAIK, J.]
whether an advance ruling pronounced by the Authority can be          A
challenged by the applicant or by the Commissioner or any
income-tax authority subordinate to him under Article 226/227
of the Constitution before the High Court or under Article 136
of the Constitution before this Court. Under Article 226 of the
Constitution, the High Court can issue writs of Certiorari and        B
Prohibition to control the proceedings of not only a subordinate
court but also of any person, body or authority having the duty
to act judicially, such as a tribunal. Under Article 227 of the
Constitution, the High Court has superintendence over all courts
and tribunals throughout the territory in relation to which it        c
exercises jurisdiction. Under Article 136 of the Constitution, this
Court may, in its discretion, grant special leave to appeal from
any judgment, decree, determination, sentence or order in any
cause or matter passed or made by any court or tribunal in the
territory of India. Hence, we have to decide whether the
                                                                      0
Authority, if not a court, is a tribunal within the meaning of
expression in Articles 136 and 227 of the Constitution and
whether the Authority has a duty to act judicially and is
amenable to writs of Certiorari and Prohibition under Article
226 of the Constitution.
                                                                      E
     7. The meaning of the expression "tribunal" in Article 136
and the expression "tribunals" in Article 227 of the Constitution
has been explained by Hidayatullah, J., in Harinagar Sugar
Mills v. Shyam Sunder [AIR 1961 S.C. 1669] in paragraph 32,
relevant portion of which is quoted herein below:                     F

     "With the growth of civilisation and the problems of modern
     life, a large number of administrative tribunals have come
     into existence. These tribunals have the authority of law to
     pronounce upon valuable rights; they act in a judicial           G
     manner and even on evidence on oath, but they are not
     part of the ordinary Courts of Civil Judicature. They share
     the exercise of the judicial power of the State, but they are
     brought into existence to implement some administrative
     policy or to determine controversies arising out of some
                                                                      H
    196        SUPREME COURT REPORTS                  (2012] 7 S.C.R.


A         administrative law. They are very similar to Courts, but are
          not Courts. When the Constitution speaks of 'Courts' in Art.
          136, 227 or 228 or in Art. 233 to 237 or in the Lists, it
          contemplates Courts of Civil Judicature but not tribunals
          other than such Courts. This is the reason for using both
B         the expressions in Arts. 136 and 227.

          By "Courts" is meant Courts of Civil Judicature and by
          "tribunals", those bodies of men who are appointed to
          decide controversies arising under certain special laws.
          Among the powers of the State is included the power to
c         decide such controversies. This is undoubtedly one of the
          attributes of the State, and is aptly called the judicial power
          of the State. In the exercise of this power, a clear division
          is thus noticeable. Broadly speaking, certain special
          matters go before tribunals, and the residue goes before
D         the ordinary Courts of Civil Judicature. Their procedures
          may differ, but the functions are not essentially different.
          What distinguishes them has never been successfully
          established ..... "

E Thus, the test for determining whether a body is a tribunal or
  not is to find out whether it is vested with the judicial power of
  the State by any law to pronounce upon rights or liabilities
  arising out of some special law and this test has been
  reiterated by this Court in Jaswant Sugar Mills Ltd. v. Lakshmi
F Chand & Ors. (AIR 1963 SC 677], Associated Cement
  Companies Ltd. v. P.N. Sharma & Anr. [AIR 1965 SC 1595]
  and in the recent decision of the Constitution Bench in Union
  of India v. R. Gandhi, President, Madras Bar Association
  ((2010) 11 sec 11.

G        8. We may now examine the provisions of Chapter XIX B
    of the Act on Advance Ruling to find out whether the Authority
    pronounces upon the rights or liabilities arising out of the Act.
    Section 245N(a} of Chapter XIX B which defines "advance
    rulings" is extracted hereinbelow:
H
COLUMBIA SPORTSWEAR COMPANY v. DIRECTOR 197
 OF INCOME TAX, BANGALORE [A.K. PATNAIK, J.]

    "245N. In this Chapter, unless the context otherwise              A
    requires,-

    (a) "advance ruling" means-

           (i) a determination by the Authority in relation to a
           transaction which has been undertaken or is                B
           proposed to be undertaken by a non-resident
           applicant; or

           (ii) a determination by the Authority in relation to the
           tax liability of a non-resident arising out of a           C
           transaction which has been undertaken or is
           proposed to be undertaken by a resident applicant
           with such non-resident, and such determination
           shall include the determination of any question of
           law or of fact specified in the application;               D

           (iii) a determination or decision by the Authority in
           respect of an issue relating to computation of total
           income which is pending before any income-tax
           authority or the Appellate Tribunal and such
           determination or decision shall include the                E
           determination or decision of any question of law or
           of fact relating to such computation of total income
           specified in the application :

    [Provided that where an advance ruling has been                   F
    pronounced, before the date on which the Finance Act,
    2003 receives the assent of the President, by the Authority
    in respect of an application by a resident applicant referred
    to in sub-clause (ii) of this clause as it stood immediately
    before such date, such ruling shall be binding on the             G
    persons specified in section 245S;]"

A plain reading of the very definition of advance ruling in
Section 245N (a) would show that the Authority is called upon
~o make a determination in relation to a transaction which has
                                                                      H
    198        SUPREME COURT REPORTS                 [2012] 7 S.C.R.


A been undertaken or is proposed to be undertaken by a non-
  resident applicant or in relation to the tax liability of a non-
  resident arising out of such transaction which has been
  undertaken or proposed to be undertaken by a resident
  applicant with such non-resident and such determination may
B be on any question of law or fact specified in the application.
  Further, the Authority may make a determination or decision
  in respect of a issue relating to the computation of total income
  which is pending before any income-tax authority or the
  Appellate Tribunal and such determination or decision may
c include the determination or decision of any question of law or
  of fact relating to such computation of total income specified
  in the application. Thus, the Authority may determine not only
  a transaction but also the tax liability arising out of a transaction
  and such determination may include a determination of issue
  of fact or issue of law. Moreover, the Authority may determine
0
  the quantum of income and such determination may include a
  determination on a issue of fact or issue of law.

       9. We also find that the determination of the Authority is
  not just advisory but binding. Section 2458 in Chapter XIX-B
E is quoted hereunder:

           "2455. (1) The advance ruling pronounced by the
                 Authority under section 245R shall be binding only-

                 (a) on the applicant who had sought it;
F
                 (b) in respect of the transaction in relation to which
                 the ruling had been sought; and

                 (c) on the Commissioner, and the income-tax
                 authorities subordinate to him, in respect of the
G
                 applicant and the said transaction.

          (2) The advance ruling referred to in sub-section (1) shall
          be binding as aforesaid unless there is a change in law
          or facts on the basis of which the advance ruling has been
H         pronounced."
COLUMBIA SPORTSWEAR COMPANY v. DIRECTOR 199
 OF INCOME TAX, BANGALORE [A.K. PATNAIK, J.]
The binding effect of advance ruling as provided in Section           A
2458 has been dealt with by the Authority (Chairman and two
Members} in Cyril Eugene Pereira, In re. [1999] 239 ITR 650]
and at page 672 of the ITR, the Authority held:

     "Thus, sub-section (2) of section 2458 has limited the
                                                                      B
     binding nature of the ruling to the case of the applicant in
     respect of the transaction in relation to which the advance
     ruling is sought and to the Commissioner and authorities
     subordinate to him only in respect of the applicant and the
     transaction involved. This is not to say that a principle of     C
     law laid down in a case will not be followed in future. The
     Act has made the ruling binding in the case of one
     transaction only and the parties involved in that case in
     respect of that transaction. For other transactions and for
     other parties, the ruling will be of persuasive nature."
                                                                      D
The Authority, thus, held that the advance ruling of the Authority
is binding in the case of one transaction only and the parties
involved in respect of that transaction and for other parties, the
ruling will be of persuasive nature. The Authority, however, has
clarified that this is not to say that a principle of law laid down   E
in a case will not be followed in future. This decision of the
Authority in Cyril Eugene Pereira, In re. (supra} has been taken
note of by this Court in Union of India & Anr. v. Azadi Bachao
Ando/an & Anr. [2003] 263 ITR 706 at 742] to hold that the
advance ruling of the Authority is binding on the applicant, in       F
respect of the transaction in relation to which the ruling had
been sought and on the Commissioner and the income-tax
authorities subordinate to him and has persuasive value in
respect of other parties. However, it has also been rightly held
by the Authority itself that this does not mean that a principle      G
of law laid down in a case will not be followed in future.

     10. As Section 245S expressly makes the Advance Ruling
binding on the applicant, in respect of the transaction and on
the Commissioner and the income tax authorities subordinate
to him, the Authority is a body acting in judicial capacity. H.M.     H
    200       SUPREME COURT REPORTS                [2012] 7 S.C.R.


A   Seervai in his book "Constitutional Law of India" (Forth Edition)
    while discussing the tests for identifying judicial functions in
    paragraph 16.99 quotes the following passage from Prof. de
    Smiths Judicial Review on page 1502:

          "An authority acts in a judicial capacity when, after
B
          investigation and deliberation, it performs an act or makes
          a decision that is binding and collusive and imposes
          obligation upon or affects the rights of individuals."

  We have, therefore, no doubt in our mind that the Authority is a
C body exercising judicial power conferred on it by Chapter XIX-
  B of the Act and is a tribunal within the meaning of the
  expression in Articles 136 and 227 of the Constitution.

        11. The fact that sub-section (1) of Section 245S makes
0 the advance ruling pronounced by the Authority binding on the
  applicant, in respect of the transaction and on the
  Commissioner and the income-tax authorities subordinate to
  him in respect of the applicant and the transaction would not
  affect the jurisdiction of either this Court under Article 136 of
E the Constitution or of the High Courts under Articles 226 and
  227 of the Constitution to entertain a challenge to the advance
  ruling pronounced by the Authority. The reason for this view is
  that Articles 136, 226 and 227 of the Constitution are
  constitutional provisions vesting jurisdiction on this Court and
  the H.igh Courts and a provision of an Act of legislature making
F the decision of the Authority final or binding could not come in
  the way of this Court or the High Courts to exercise jurisdiction
  vested under the Constitution. We may cite some authorities
  in support of this view. In Kihoto Hol/ohan v. Zachillhu and
  Others (supra), the question raised before this Court was
G whether Paragraph 6(1) of Schedule-X of the Constitution
  providing that the decision of the Speaker or the Chairman on
  the question of disqualification of a member of the Legislature
  will be final would exclude judicial review under Articles 136,
  226 and 227 oi the Constitution and this Court held that the
H
COLUMBIA SPORTSWEAR COMPANY v. DIRECTOR 201
 OF INCOME TAX, BANGALORE [A.K. PATNAIK, J.]
finality clause in Paragraph 6 of the Schedule-X of the               A
Constitution does not completely exclude the jurisdiction of the
Courts under Articles 136, 226 and 227 of the Constitution,
though it may limit the scope of this jurisdiction. In
Jyotendrasinhji v. S./. Tripathi and Others (supra), this Court
held that the provision in Section 245-1 of the Income Tax Act,       B
1961, declaring that every order of settlement passed under
sub-section (4) of Section 2450 shall be conclusive as to the
matters stated therein would not bar the jurisdiction of the High
Court under Article 226 of the Constitution or of this Court under
Article 136 of the Constitution. Considering the settled position     c
of law that the powers of this Court under Article 136 of the
Constitution and the powers of the High Court under Articles
226 and 227 of the Constitution could not be affected by the
provisions made in a statute by the Legislature making the
decision of the tribunal final or conclusive, we hold that sub-
                                                                      0
section (1) of Section 245S of the Act, insofar as, it makes the
advance ruling of the Authority binding on the applicant, in
respect of the transaction and on the Commissioner and
 income-tax authorities subordinate to him, does not bar the
jurisdiction of this Court under Article 136 of the Constitution      E
 or the jurisdiction of the High Court under Articles 226 and 227
 of the Constitution to entertain a challenge to the advance ruling
 of the Authority.

    12. In a recent advance ruling in Groupe Industrial Marcel
Dassault, In re [2012] 340 ITR 353 (AAR)], the Authority has,         F
however, observed:

     " ..... But permitting a challenge in the High Court would
     become counter productive since writ petitions are likely
     to be pending in High Courts for years and in the case of        G
     some High Courts, even in Letters Patent Appeals and
     then again in the Supreme Court. It appears to be
     appropriate to point out that considering the object of
     giving an advance ruling expeditiously, it would be
     consistent with the object sought to be achieved, if the         H
     202        SUPREME COURT REPORTS               [2012] 7 S.C.R.

A          Supreme Court were to entertain an application for Special
           Leave to appeal directly from a ruling of this Authority,
           preliminary or final, and render a decision thereon rather
           than leaving the parties to approach the High Courts for
           such a challenge .... "
B
     We have considered the aforesaid observations of the
     Authority but we do not think that we can hold that an advance
     ruling of the Authority can only be challenged under Article 136
    of the Constitution before this Court and not under Articles 226
C    and/or 227 of the Constitution before the High Court. In L.
     Chandra Kumar v. Union of India and Others (supra}, a
    Constitution Bench of this Court has held that the power vested
    in the High Courts to exercise judicial superintendence over the
    decisions of all courts and tribunals within their respective
    jurisdictions is part of the basic structure of the Constitution.
D   Therefore, to hold that an advance ruling of the authority should
    not be permitted to be challenged before the High Court under
    Articles 226 and/or 227 of the Constitution would be to negate
    a part of the basic structure of the Constitution. Nonetheless,
    we do understand the apprehension of the Authority that a writ
E   petition may remain pending in the High Court for years, first
    before a learned Single Judge and thereafter in Letters Patent
    Appeal before the Division Bench and as a result the object of
    Chapter XIX-B of the Act which is to enable an applicant to get
    an advance ruling in respect of a transaction expeditiously
F   would be defeated. We are, thus, of the opinion that when an
    advance ruling of the Authority is challenged before the High
    Court under Articles 226 and/or 227 of the Constitution, the
    same should be heard directly by a Division Bench of the High
    Court and decided as expeditiously as possible.
G
         13. The only other question which we have to consider is
    whether we should entertain this petition under Article 136 of
    the Constitution or ask the petitioner to approach the High Court
    under Articles 226 and/or 227 of the Constitution. Article 136
    of the Constitution itself states that this Court may, "in its
H
COLUMBIA SPORTSWEAR COMPANY v. DIRECTOR 203
 OF INCOME TAX, BANGALORE [A.K. PATNAIK, J.]
discretion", grant special leave to appeal from any order              A
passed or made by any court or tribunal in the territory of India.
The words "in its discretion" in Article 136 of the Constitution
makes the exercise of the power of this Court in Article 136
discretionary. Hence, even if good grounds are made out in a
Special Leave Petition under Article 136 for challenge to an           B
advance ruling given by the Authority, this Court may still, in its
discretion, refuse to grant special leave on the ground that the
challenge to the advance ruling of the authority can also be
made to the High Court under Articles 226 and/or 227 of the
Constitution on the self same grounds. In fact, in Sirpur Paper        c
Mills Ltd. v. Commissioner of Wealth Tax, Hyderabad [AIR
1970 SC 1520] it has been observed that this Court does not
encourage an aggrieved party to appeal directly to this Court
against the order of a Tribunal exercising judicial functions
unless it appears to the Court that a question of principle of
                                                                       0
great importance arises. Unless, therefore, a Special Leave
Petition raises substantial questions of general importance or
a similar question is already pending before this Court for
decision, this Court does not entertain a Special Leave Petition
directly against an order of the tribunal.
                                                                       E
      14. In this Special Leave Petition, we do not find that a
substantial question of general importance arises nor is it
shown that a similar question is already pending before this
Court for which the petitioner should be permitted to approach
this Court directly against the advance ruling of the Authority.       F
We accordingly dispose of this Special Leave Petition granting
liberty to the petitioner to move the appropriate High Court
under Article 226 and/or 227 of the Constitution. We request
the concerned High Court to ensure that the Writ Petition, if filed,
is heard by the Division Bench hearing income-tax matters and          G
we request the Division Bench to hear and dispose of the
matter as expeditiously as possible.



                                                                       H
    204       SUPREME COURT REPORTS             [20121 7 S.C.R.


A     SPECIAL LEAVE PETITION (C) No. 3318 of 2011,
  SPECIAL LEAVE PETITION (C) No. 13760 of 2011, CIVIL
  APPEAL No. 2996 of 2008, CIVIL APPEAL No. 5839 of
  2008, CIVIL APPEAL No. 7035 of 2011, CIVIL APPEAL No.
  6987 of 2010, CIVIL APPEAL No. 10064 of 2011, AND
B CIVIL APPEAL No. 11327 of 2011,

          Delay condoned in Special Leave Petitions.

       These Special Leave Petitions and Civil Appeals are
  disposed of in terms of our order passed in Special Leave
C Petition (C) No.31543 of 2011.

    8.8.8.                                  Matters disposed of.