Refusal to follow the decision of Co-ordinate bench of Tribunal amount to breach of judicial discipline: Bombay HC [Read Order]

Business Income - Bombay High Court 2 - Tax Scan

The Bombay High Court, in a recent decision held that refusal of the Tribunal to follow the decision of the co-ordinate bench, without any reason, would result in breach of principles of judicial discipline. Further, the Court directed that when the Tribal chooses to ignore such a decision, it is under an obligation to make a request before the President of the Tribunal to constitute a larger bench to decide the difference of view on the issue.

The Court was considering an appeal filed by the assesee, a co-operative society, who submitted that the order of the Tribunal in the instant case is not justifiable for the reason that the issue, ie, taxability of the transfer fees and TDR premium received by a co-operative society, has been already decided by the co-ordinate bench of the Tribunal in assessees’ favour in an earlier case, pertains to a different assessment year. The Tribunal, while considering the second appeal in the present case, has refused to follow the earlier decision without recording any valid reason.

The division bench found that in the earlier order, the co-ordinate bench opined that transfer fees as well as TDR premium received from Co­operative Societies is covered by the principle of mutuality.

The Court, while quashing the impugned order of the Tribunal, the Court observed that “We are of the view that when an identical issue, which had earlier arisen before the Co-ordinate bench of the Tribunal on identical facts and a view has been taken on the issue then judicial discipline would demand that a subsequent bench of the Tribunal hearing the same issue should follow the view taken by its earlier Co­ordinate Bench. No doubt its discipline is subject to the well settled exceptions of the earlier order being passed per incuriam or sub silention or in the meantime, there has been any change in either statutory or by virtue of judicial pronouncement. If the earlier orders does not fall within the exception which affect its binding character before a co-ordinate bench of the Tribunal, then it has to follow it. However, if the Tribunal has a view different, then the view taken by its co-ordinate bench on an identical issue, then the order taking such a different view must record its reasons as to why it does not follow the earlier order of the Tribunal on an identical issue which could only be one of the well settled which affect the binding nature of the earlier order. It could also depart from the earlier view of the Tribunal if there is difference in facts from the earlier view of the Tribunal if there is difference in facts from the earlier order of Co­ordinate Bench but the same must be recorded in the order. The impugned order is blissfully silent about the reason why it choses to ignore the earlier decision of the Tribunal rendered after consideration of Sind Co. Op. Hsg. Society (supra), and take a view contrary to that taken by its earlier Co­ordinate Bench. It is made clear that in case a subsequent bench of the Tribunal does not agree with the reasons indicated in a binding decision of a co-ordinate bench, then for reasons to be recorded, it must request the President of the Tribunal to constitute a larger bench to decide the difference of view on the issue.”Accordingly, the matter was remanded to the Tribunal for fresh disposal.

Read the full text of the order below.

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