Page 40 - ELT_15th August 2020_Vol 373_Part 4

A116 EXCISE LAW TIMES [ Vol. 373

These tests are only illustrative and in no way exhaustive of the powers
of the High Court to entertain an appeal under this section; it is desirable not to
place a restricted meaning to such a provision [ibid]. The High Court must make
an effort to distinguish the issues between questions of law and substantial ques-
tions of law [ibid]. Further, explaining the meaning, the Supreme Court in Vijay
Kumar Talwar v. CIT [330 ITR 1] set out a substantial question of law would inter
alia arise when :
(1) The findings are based on no evidence;
(2) While arriving at the said finding, relevant admissible evidence has
not been taken into consideration;
(3) While arriving at the said finding, inadmissible evidences have been
taken into consideration;
(4) Legal principles have not been applied in appreciating the evidence;
(5) When the evidence has been misread.
The Supreme Court in Santosh Hazari’s case additionally held that “as a
matter of law if the appraisal of the evidence by the trial Court suffers from a
material irregularity or is based on inadmissible evidence or on conjectures or
surmises, the appellate Court is entitled to interfere with the finding of fact”.
The Calcutta High Court in CIT v. Agarwal Hardware [248 ITR 155] held
that “a substantial question of law means a question of law which affects the
substance of the case, and further held that the order of the Tribunal which is not
supported by facts is perverse, and the point of perversity can be taken up in an
appeal under this section.” [Arvind P. Datar, supra, at 2766]
In Kejriwal Enterprises v. CIT [260 ITR 341] it was held that
“When an authority draws a conclusion which cannot be drawn by
any reasonable person or authority on the disclosed state of facts,
then a perverse decision is entered and a perverse decision is wrong
in law. Therefore, the court has power under this section to set aside
the finding of the Tribunal which is perverse.”
In CIT v. Nova Promoters [342 ITR 169] it was held that the High Court
can also set aside the finding of fact by the Tribunal if they are based on irrele-
vant material or have been entered by ignoring the relevant material [Arvind P.
Datar, supra, at 2766].
In CIT v. B.L. Passi [254 ITR 225], the Delhi High Court has summed up
the legal position by observing :
“a finding on a question of fact can be challenged as erroneous in law where
there is no evidence to support it or it is based on material which is irrelevant
or partly relevant and partly irrelevant or it is based on conjectures or sur-
mises or partly on these and partly on evidence or the finding is so perverse
or unreasonable that no person acting judicially and properly instructed on
law could have arrived at it.”
However, the Court generally would not interfere with the Tribunal’s
finding of fact. Similarly, sufficiency or adequacy of evidence necessary for
reaching the conclusion of fact by the Tribunal does not give rise to a question of
law [Arvind P. Datar, supra, at 2766]. While disposing of an appeal made under
Section 130 of Customs Act, 1962, Hon’ble Bombay High Court in the case of Un-
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