The Supreme Court dismissed the SLP against the High Court decision I want to rely on. Can I cite it as approved by the Supreme Court?
No. Refusal of special leave is not an exercise of appellate jurisdiction, so the High Court's order does not merge in it and does not become a Supreme Court decision. A one-line dismissal decides nothing as precedent; a dismissal that gives reasons makes those reasons a declaration of law under Article 141 while still leaving the High Court's order intact; and only after leave is granted and the appeal is decided does the order below merge in the Supreme Court's order.
The authority is Kunhayammed v. State of Kerala (2000) 6 SCC 359, also reported at (2000) 245 ITR 360 (SC), a three-judge bench decision of 19 July 2000, which this library holds at kunhayammed-v-state-of-kerala-slp-dismissal-merger. It sorts what happens at the Supreme Court into three situations, and almost every mistake practitioners make about dismissed special leave petitions comes from running them together.
Situation one: leave is refused by a non-speaking order. The petition is dismissed, often in a line, without reasons. Nothing merges. The commentaries fetched put the Court's position as: an order refusing special leave to appeal may be a non-speaking order or a speaking one, and in either case it does not attract the doctrine of merger. There is no declaration of law, because nothing has been declared. The operative order remains the High Court's, and it binds only what a High Court order binds - the parties, and, as precedent, the courts and tribunals subordinate to that High Court. What the dismissal means is that the Court did not think the case a fit one for the exercise of its discretion under Article 136; it does not mean the Court agreed with the reasoning below.
Situation two: leave is refused, but the order gives reasons. Merger still does not apply - the jurisdiction being exercised is discretionary, not appellate. But the reasons stated are a declaration of law and attract Article 141, so no court or tribunal below is at liberty to take a view contrary to what was said. The distinction is fine and it matters: the reasons bind, the High Court's order does not become the Supreme Court's, and a subsequent High Court is not precluded from dealing with the same question in a different case on a point the reasons did not cover.
Situation three: leave is granted. From that moment the petition is an appeal and the Court's appellate jurisdiction is engaged. When the appeal is decided - allowed, dismissed, or dismissed after argument - the order under challenge merges in the Supreme Court's order, and the only operative order thereafter is the Supreme Court's. This is the only one of the three situations in which it is accurate to say that the High Court decision has been affirmed by the Supreme Court.
A fourth situation is worth adding because it turns up constantly in tax and is not in Kunhayammed at all: dismissal on the ground of delay. Where the department's petition is dismissed because it was filed hundreds of days late and the delay is not condoned, nothing whatever has been decided - not the merits, and not even the discretion under Article 136 on the merits. A dismissal on limitation affirms nothing.
What this changes in practice. When you cite a High Court decision and add that the special leave petition against it was dismissed, be precise about which of the situations you are in, because the opponent will be. When the department cites a dismissed petition against you, ask for the order: it will usually be a one-line dismissal, and once that is on the table the argument reduces to the merits of the High Court decision. Where the Supreme Court's dismissal order does contain reasons, quote the reasons, not the fact of dismissal. And because there is no merger on a refusal of leave, remember the practical corollary the case itself decided: the High Court retains jurisdiction over its own order, including the power to entertain a review of it.
One caution particular to tax. A dismissal often reflects the department's own litigation policy rather than any view of the law - the monetary limits in the Board's circulars under s.268A mean petitions are withdrawn or not pressed for reasons having nothing to do with the merits, and this library holds those circulars at cbdt-circular-5-2024-appeal-exceptions and cbdt-circular-9-2024-appeal-monetary-limits. Do not read a departmental withdrawal as an acceptance of the proposition.
The sentence 'the SLP against this decision was dismissed' is used on both sides as though it settled something, and in most cases it settles nothing. Getting the distinction right decides whether you can tell a Tribunal that it is bound, or only that it should be persuaded - and it decides whether a High Court can still be asked to review its own order.
The Commissioner has cancelled my trust's registration because some corpus donations are said to be bogus — can he do that when the money was actually spent on the trust's objects?
A search was made on someone else and my papers were found. From which date are my six years counted - the search, or when my Assessing Officer got the papers?
You gave particulars, paid by cheque and got a confirmation. Has the burden shifted?
The Tribunal recalled its whole order on my miscellaneous application. Will that recall survive?
Can I argue a point in the High Court that was never taken before the Tribunal, if it arises on the facts the Tribunal found?
The officer has invoked s.79 after a change in our shareholding and struck out everything brought forward, including unabsorbed depreciation. Does s.79 reach unabsorbed depreciation?
My client held shares of the amalgamating company as stock-in-trade and received shares of the amalgamated company under the court-sanctioned scheme. Is there business income at that point, or only when those shares are sold?
The department's SLP against a High Court judgment in my favour was dismissed. Is that judgment now a Supreme Court decision?
Every page in this library links to what it was written from, so you can check it rather than take our word for it.