Precedent – Judicial discipline – Tribunal cannot assume power to declare judgement of division Bench of Court as per incuriam and refuse to follow it. [Karnataka Sales Tax Act, 1957, Section 6B]

Reassessment u/s. 12-A of the Act was passed on the basis of the judgment dated 25.11.2004 of this Court in the case of Pali Chemical Industries, Nippani, Belgaum vs. The Additional Commissioner of Commercial Taxes, Zone-I, Bangalore and another reported in 2005 (58) KLJ 54 (HC) (DB), that the chemical fertilizer mixture is not eligible for exemption from turn over tax even if its components have already suffered local tax under the Act.

The Tribunal after noticing that, while delivering the judgment in Pali Chemical Industries case, the decision in the case of State of Karnataka vs. Kothari Industrial Corporation, reported in 2000-01 (5) K.C.T.J. 193 was not noticed or brought before the Hon’ble High Court by the parties concerned in Pali Chemical Industries case, held that the judgment in Pali Chemical Industries case cannot be considered as a binding precedent.

The High Court observed that we would like to place on record that we are very much disturbed by the tendency exhibited by the lower authorities in refusing to follow the law laid down by this Court saying that the same is not binding on them merely because other binding precedents are not taken into consideration in those judgments. It appears that the Tribunal has assumed the power to declare the judgment of the Division Bench of this Court as per incuriam and thereby refused to follow the judgment. The justification for such a course of action is that it is permitted to do so by another Division Bench. If this tendency is not nipped in the bud, we are afraid that there will be total lawlessness especially in the branch of Taxation Law.

The High Court further held that if another Division Bench of this Court is not persuaded to accept the said view, the only course open is to place relevant papers before the Hon’ble Chief Justice to enable him to constitute a larger Bench to examine the question. That is the proper and traditional way to deal with such matter.

It is high time that the lower authorities learn to maintain judicial discipline and stop showing disrespect to the constitutional ethos. Breach of discipline has great impact on the credibility of the judicial institution and encourages chance litigation. It must be remembered that practicability and certainty is a hallmark of the judicial jurisprudence developed in the country in the last six decades.