M/S Tamil Nadu State Marketing ... vs Union Of India

The Supreme Court held that the High Court erred in dismissing the writ petition challenging the vires of Section 40(a)(iib) of the Income Tax Act, 1961, without addressing the merits of the case. The Court emphasized that the validity of the provision, alleged to be discriminatory and violative of Articles 14, 19, and 265 of the Constitution, should have been adjudicated by the High Court. Consequently, the Supreme Court set aside the High Court's order and directed that the matter be decided on its merits.