Substantial questions of law require merits review; summary dismissal of the Revenue appeal was set aside and remitted.

Where a Revenue appeal raises substantial questions of law, the High Court should not summarily dismiss it without examining the issues on merits. The Supreme Court found that questions concerning interest expenses, profit on sale of raw materials, and interest under sections 234B and 234C did involve substantial questions of law, so summary dismissal was inappropriate. The Court accordingly set aside the dismissal and remitted the matter to the High Court for adjudication after hearing both sides.

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Issues: Whether the High Court was justified in summarily dismissing the Revenue's appeal without examining the questions raised on the ground that no substantial question of law arose, and whether the matter required consideration on merits.

Analysis: The questions proposed by the Revenue, including the adjustments relating to interest expenses, profit on sale of raw materials, and levy of interest under sections 234B and 234C, were found to raise substantial questions of law. The summary dismissal by the High Court without merits consideration was therefore held to be inappropriate, and the appeal required restoration for adjudication after hearing both sides.

Conclusion: The summary dismissal was set aside and the matter was remitted to the High Court for decision on merits.

Ratio Decidendi: Where an appeal raises substantial questions of law, the High Court should not dispose of it summarily but must decide the questions on merits.

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