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Statutory interpretation by one Bench of High Court is binding on Co-ordinate bench of that very High Court and subsequent Bench cannot hold that particular provision was misinterpreted and re-interpret it again. The only recourse in such case is to refer the matter to Larger Bench. The way forward for appellant/respondent is to appeal before a Superior Court.
Facts
The Appellant engaged in providing of telecommunication services. Availed CENVAT credit on the duty paid on towers (in CKD/SKD form), parts of the towers, shelter/ pre-fabricated buildings purchased by them and used for providing output services. The statutory authorities contended that they were not entitled to avail CENVAT credit as per CCR and the view was upheld by CESTAT . Aggrieved by the order, in the appeal to the High Court, it was contended that the goods are capital goods or alternatively inputs under the said rules, only if any structure is attached permanently to land and cannot exist independently, the same shall be considered as immovable property. An Affidavit was filed with CESTAT providing technical details regarding set up of tower, preparation of civil foundation, erection and its dismantling. If goods have to be fastened to earth to facilitate its use, the goods do not lose the characteristics of ‘goods’. Though in an identical case, this High Court in Bharti Airtel Ltd. 2014 (35) STR 865 (Bom.) had disallowed CENVAT Credit, the case required a review since certain submissions were either not made or not considered in the said case. The respondent submitted that the issue and question of law was squarely covered by this court in case of Bharti Airtel Ltd. (Supra). Therefore, the appeal was meritless.
Held
After analysing the decision in Bharti Airtel’s case, the Hon’ble High Court observed that the said decision squarely applies to the case of the appellant as all the aspects of the subject matter were considered, the very provisions were relied upon and interpreted. Once the very rules relied upon were interpreted by the Division Bench of a Court, judicial discipline demands that this interpretation be followed by the co-ordinate bench of that very Court. It is well settled that interpretation of a statutory provision and equally a mis-interpretation by one Bench of High Court would be binding on the co-ordinated bench of that very High Court. The subsequent Bench cannot say that particular provision was misinterpreted and reinterpret it again. Therefore, the only recourse available to the subsequent Bench is to refer the matter to Larger Bench. In any case, the Court was in full agreement with the decision delivered by the co-ordinate bench and therefore, the disallowance of CENVAT Credit was upheld without referring the matter to larger bench. It was also commented that If the appellant is of the opinion that decision delivered in case of Bharti Airtel Ltd. (supra) was not appropriate, remedy to correct the same would lie before Superior Court above.
