2016 (8) TMI 1142 - HC - Central Excise

The controversy is squarely covered by the judgment M/s. Garden Silk Mills Limited v. The Union of India & Others 2016 (7) TMI 1021 - BOMBAY HIGH COURT - the Deputy Commissioner was in complete error in not following and applying these binding judgments of this Court. They have not been followed and applied on the specious plea that the Revenue has carried the matter in the Hon ble Supreme Court of India and it is pending therein - We do not approve of such a stand of the Revenue/respondents for the simple reason that a matter being pending in the Hon ble Supreme Court does not mean the binding effect of this Court s order is lost or wiped out. We are, therefore, of the clear view that the Deputy Commissioner of Service Tax-II (Refund), Mumbai/respondent No. 3 to this writ petition, was in total error in refusing to abide by the binding judgment and order of this Court - petition allowed.

Summary

Issues:
1. Compliance with binding judgments of the High Court.
2. Refusal to follow court orders based on pending matters in the Supreme Court.
3. Imposition of costs for not abiding by court orders.

Compliance with binding judgments of the High Court:
The High Court observed that the controversy in the case was covered by a judgment delivered earlier by the same court in a related matter. Additionally, a Division Bench order had also addressed the same issue. The court criticized the Deputy Commissioner for not following these binding judgments, emphasizing that the pendency of the matter in the Supreme Court did not negate the binding effect of the High Court's orders. The court held that the Deputy Commissioner was in error for not abiding by the established legal precedents set by the High Court.

Refusal to follow court orders based on pending matters in the Supreme Court:
The court disapproved of the Revenue's stance of not adhering to the High Court's orders due to the matter being pending in the Supreme Court. The court reiterated that the pendency of a case in the Supreme Court did not diminish the binding nature of the High Court's decisions. It emphasized that the Deputy Commissioner's refusal to apply the court orders was unjustified, and the court deemed it as a clear error on the part of the Revenue. The court highlighted the importance of following and applying established legal precedents even in the presence of pending matters in higher courts.

Imposition of costs for not abiding by court orders:
In light of the Deputy Commissioner's failure to comply with the binding judgments and orders of the High Court, the writ petition was allowed, and the impugned orders were quashed and set aside. The court directed the respondents to pay costs amounting to ?50,000 within six weeks from the date of receipt of the order. Furthermore, the concerned Commissioner was granted the liberty to recover the costs from the officials at fault, including respondent No. 3. The court justified the imposition of costs due to the refusal to apply and follow the established Division Bench judgments, underscoring the importance of respecting and abiding by legal precedents set by the court.