Sales Tax – Classification of Goods – Appeals by the Commercial Taxes Officer challenging the High Court’s decision that classified 'Jaljira' as not being a 'masala' and therefore taxable at a general rate of 10% instead of 16% – Supreme Court reversed the High Court’s decision, ruling that 'Jaljira' is a packed masala and taxable at 16% [Paras 3-20].

Interpretation of Tax Entries – Notification and Clarification – Supreme Court examined various notifications and a clarificatory letter defining 'packed masala' as a mixture of two or more ingredients sold in packed conditions – Affirmed that 'Jaljira' meets this definition and falls under the higher tax rate category [Paras 6-19].

Commercial Commodity – Nature of 'Jaljira' – Court analyzed the ingredients and preparation of 'Jaljira', concluding it is a mixture of ground and mixed spices, thus a 'masala' – Emphasized the settled legal principle that specific entries prevail over residuary entries in tax classification [Paras 17-18].

Decision: Appeals allowed – High Court’s judgment set aside – Orders of the Tax Assessment Officer restored, classifying 'Jaljira' and similar products as 'packed masala' taxable at 16% [Para 20-24].

Employment Law – Concealment of Criminal Case – Respondent’s candidature for Head Constable cancelled due to non-disclosure of involvement in a criminal case, later acquitted – Delhi High Court quashed the cancellation, Supreme Court upheld the decision – Court emphasized youthful indiscretions should not permanently brand individuals as criminals, highlighting reformation over punishment [Paras 1-20].

Principles of Natural Justice – False Statement in Application – Respondent did not disclose previous criminal case fearing disqualification – Supreme Court noted the minor nature of the offence (Section 325/34 IPC) and the subsequent acquittal – Affirmed the need for a lenient approach in cases involving youthful indiscretions [Paras 13-19].

Comparative Jurisprudence – Reference to International and Historical Cases – Court referred to 'Les Miserables' character Jean Valjean and Lord Denning’s judgment in Morris v. Crown Office, emphasizing mercy and reformation [Paras 14-15].

Decision: Appeal dismissed – Court found the cancellation of the respondent’s candidature illegal, advocating for a more lenient and reformative approach towards minor youthful indiscretions [Para 20].

Service Law – Seniority – Interpretation of Rules – The appeal concerns the interpretation of Rule 27(c) of the Kerala State and Subordinate Services Rules, 1958, determining seniority based on the date of first effective advice by the Public Service Commission for appointment – Appellants, being SC/ST candidates, were advised earlier and hence claimed seniority over general category respondents [Paras 4-7].

Literal Rule of Interpretation – Judicial Restraint – The Supreme Court emphasized the literal rule of interpretation, holding that when the language of the rule is clear, it must be followed strictly – Equity cannot override clear statutory provisions – The appellants were deemed senior as their appointments were advised earlier than the respondents [Paras 8-14].

Precedent and Judicial Discipline – Reaffirmed the principle that when statutory language is clear and unambiguous, the literal interpretation must prevail – Cited multiple precedents and the Mimansa rules of interpretation to reinforce the decision [Paras 15-38].

Decision: Appeal allowed – Judgments of the Full Bench and the learned Single Judge of the High Court set aside – Writ petition by the private respondents dismissed – Appellants declared senior based on Rule 27(c) of the Kerala State and Subordinate Services Rules, 1958 [Paras 39].

Tax Law – Sales Tax – Classification of Goods – The appeal dealt with the classification of plant and machinery sold as scrap by NLC through MSTC and the applicable sales tax rate – The core issue was whether the goods sold should be taxed as scrap at 4% or as plant and machinery at 12% with a 5% surcharge [Paras 4-9].

Public Sector Sale – Nature of Goods – Despite being initially described as plant and machinery, the goods were sold as scrap due to obsolescence and condemnation – Sales tax authorities initially accepted the classification as scrap, taxing it at 4%, but later changed their stance to classify it as plant and machinery [Paras 7-9, 12-16].

Evidence and Judicial Findings – The Court examined agreements, acceptance letters, and conduct of the sale, including the dismantling process using explosives – Affirmed that what was sold was indeed scrap, and hence, subject to the lower tax rate of 4% [Paras 15-18].

Decision: Appeal dismissed – Sale classified as scrap – Refund of excess sales tax paid at 12% with 5% surcharge to be processed and refunded with interest as per law within specified time frames [Paras 18-21].

Income Tax – Non-Competition Fee – Appeal by assessee challenging High Court decision that classified a non-competition fee as a revenue receipt – Supreme Court clarifies dichotomy between compensation for loss of agency (revenue receipt) and compensation for restrictive covenant (capital receipt) – High Court misinterpreted the precedent, failing to appreciate that payment under a negative covenant is a capital receipt [Paras 5-7].

Dichotomy of Receipts – Compensation for agency loss vs. negative covenant – Court references Gillanders Arbuthnot and Co. Ltd. case, distinguishing between revenue receipt (agency loss) and capital receipt (restrictive covenant) – Assessee’s fee received under non-competition agreement classified as capital receipt, taxable post-2003 amendment [Paras 6-7].

Finance Act, 2002 – Section 28(va) – Clarification that non-competition fee taxable as capital receipt only from 1.4.2003 – Legislative amendment not retroactive – High Court erred in reversing Tribunal’s decision based on misinterpretation [Paras 7-8].

Decision: Appeal allowed – Supreme Court sets aside High Court judgment, restores Tribunal’s decision – Non-competition fee of Rs. 50 lakhs received by assessee deemed capital receipt, not taxable for relevant assessment year – Costs awarded to appellant [Para 8].

Service Law – Seniority – Interpretation of Rules – The appeal concerns the interpretation of Rule 27(c) of the Kerala State and Subordinate Services Rules, 1958, determining seniority based on the date of first effective advice by the Public Service Commission for appointment – Appellants, being SC/ST candidates, were advised earlier and hence claimed seniority over general category respondents [Paras 4-7].

Literal Rule of Interpretation – Judicial Restraint – The Supreme Court emphasized the literal rule of interpretation, holding that when the language of the rule is clear, it must be followed strictly – Equity cannot override clear statutory provisions – The appellants were deemed senior as their appointments were advised earlier than the respondents [Paras 8-14].

Precedent and Judicial Discipline – Reaffirmed the principle that when statutory language is clear and unambiguous, the literal interpretation must prevail – Cited multiple precedents and the Mimansa rules of interpretation to reinforce the decision [Paras 15-38].

Decision: Appeal allowed – Judgments of the Full Bench and the learned Single Judge of the High Court set aside – Writ petition by the private respondents dismissed – Appellants declared senior based on Rule 27(c) of the Kerala State and Subordinate Services Rules, 1958 [Paras 39].

Tax Law – Sales Tax – Classification of Goods – The appeal dealt with the classification of plant and machinery sold as scrap by NLC through MSTC and the applicable sales tax rate – The core issue was whether the goods sold should be taxed as scrap at 4% or as plant and machinery at 12% with a 5% surcharge [Paras 4-9].

Public Sector Sale – Nature of Goods – Despite being initially described as plant and machinery, the goods were sold as scrap due to obsolescence and condemnation – Sales tax authorities initially accepted the classification as scrap, taxing it at 4%, but later changed their stance to classify it as plant and machinery [Paras 7-9, 12-16].

Evidence and Judicial Findings – The Court examined agreements, acceptance letters, and conduct of the sale, including the dismantling process using explosives – Affirmed that what was sold was indeed scrap, and hence, subject to the lower tax rate of 4% [Paras 15-18].

Decision: Appeal dismissed – Sale classified as scrap – Refund of excess sales tax paid at 12% with 5% surcharge to be processed and refunded with interest as per law within specified time frames [Paras 18-21].

Income Tax – Non-Competition Fee – Appeal by assessee challenging High Court decision that classified a non-competition fee as a revenue receipt – Supreme Court clarifies dichotomy between compensation for loss of agency (revenue receipt) and compensation for restrictive covenant (capital receipt) – High Court misinterpreted the precedent, failing to appreciate that payment under a negative covenant is a capital receipt [Paras 5-7].

Dichotomy of Receipts – Compensation for agency loss vs. negative covenant – Court references Gillanders Arbuthnot and Co. Ltd. case, distinguishing between revenue receipt (agency loss) and capital receipt (restrictive covenant) – Assessee’s fee received under non-competition agreement classified as capital receipt, taxable post-2003 amendment [Paras 6-7].

Finance Act, 2002 – Section 28(va) – Clarification that non-competition fee taxable as capital receipt only from 1.4.2003 – Legislative amendment not retroactive – High Court erred in reversing Tribunal’s decision based on misinterpretation [Paras 7-8].

Decision: Appeal allowed – Supreme Court sets aside High Court judgment, restores Tribunal’s decision – Non-competition fee of Rs. 50 lakhs received by assessee deemed capital receipt, not taxable for relevant assessment year – Costs awarded to appellant [Para 8].

Principles of Natural Justice – Supply of UPSC Report – The respondent was dismissed for absence without leave, but the dismissal was quashed by the CAT, directing the supply of the UPSC report to the respondent – High Court upheld the CAT's order – Supreme Court emphasized that materials relied upon in departmental proceedings must be supplied in advance to the charge-sheeted employee for rebuttal, maintaining principles of natural justice [Paras 7-11].

Consultation with UPSC – Distinguishability from T.V. Patel's Case – The appellant argued the validity of supplying the UPSC report along with the dismissal order based on T.V. Patel's case – Supreme Court distinguished that T.V. Patel's decision does not apply when the UPSC report is relied upon by authorities – Preceding decision in S.N. Narula’s case mandates supplying the report in advance for rebuttal, establishing a binding precedent over T.V. Patel's case [Paras 8-13].

Binding Precedent – Prior Coordinate Bench Decision – Supreme Court clarified that a subsequent bench of equal strength must follow prior decisions unless referred to a larger bench – Since S.N. Narula’s case was not considered in T.V. Patel’s case, the latter was deemed judgment per incuriam [Para 13].

Decision: Appeal dismissed – High Court’s order upheld – Authorities must supply a copy of the UPSC report in advance to the employee when relied upon for disciplinary action, ensuring compliance with principles of natural justice [Paras 14].