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Issues involved: Petition for writ of mandamus and interest payment u/s 214 of Income-tax Act.
Judgment Summary: The petitioner, a partnership-firm in the business of air-conditioning, filed income-tax returns for certain assessment years. The Income-tax Officer allowed a refund but denied interest as the last advance tax installment was not paid within the stipulated period. The petitioner's revision under section 264 was rejected by the Commissioner of Income-tax, Baroda, who cited a pending Supreme Court decision. The petitioner argued that the Commissioner's refusal to follow a High Court decision was illegal. The High Court held that the Commissioner's order was contrary to law as per previous High Court rulings, directing interest payment to the petitioner u/s 214 of the Income-tax Act. The High Court emphasized that subordinate authorities must adhere to decisions of the High Court, as failure to do so undermines the administration of justice. Refusal to follow High Court decisions was deemed a denial of justice and destructive to the hierarchy of courts. The Supreme Court's stance on the binding nature of High Court decisions on subordinate courts and Tribunals was reiterated, emphasizing the importance of respecting and following established legal precedents. In conclusion, the High Court allowed the petition, quashing the Commissioner's order and directing interest payment to the petitioner in accordance with the law. The second respondent was obligated to adhere to the High Court's decision, and the order was set aside. The High Court reaffirmed the principle that decisions of the High Court are binding on all subordinate courts and Tribunals within its jurisdiction, emphasizing the importance of upholding legal precedents for the smooth functioning of the legal system.
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