2016 (4) TMI 1340 - HC - Customs

Correctness of the authority of the Tribunal to make a reference to a larger Bench - Tribunal was confronted with conflicting decisions of two benches of the Tribunal on an identical question of law arising in the said group of tax appeals - Held that - When the Tribunal recorded that the two Benches had given diagonally opposite decisions, the Tribunal was perfectly justified in making a reference. Even if the department were of the opinion that one of the judgements could be distinguished on facts, the same would not give rise to a substantial question of law. Being a forum discharging judicial functions, the Tribunal was bound by the law of precedence. If two different benches of co-ordinate strength had given deferring opinions, the Tribunal had to refer the dispute to the Larger Bench. All the questions of law are, therefore, answered against the Revenue - appeal dismissed.

Summary

Issues:
- Authority of the Tribunal to make a reference to a larger Bench

Analysis:
The central issue in this case revolves around the authority of the Tribunal to refer a matter to a larger Bench when faced with conflicting decisions from different benches on the same legal question. The Tribunal, in this instance, encountered contradictory decisions from two benches regarding the availability of a specific benefit to the assessee. One bench in New Delhi held in favor of the benefit, while another bench in Mumbai took an opposing view. Consequently, the Tribunal referred the matter to a Larger Bench due to the conflicting judgments. The Tribunal justified its decision by stating that since the contradictory orders were issued by benches with the same composition, it was challenging to determine which judgment should be followed, given the identical issue at hand.

Upon review, the High Court found no error in the Tribunal's approach. The High Court opined that when faced with conflicting decisions from benches of the same strength, the Tribunal was justified in making a reference to a Larger Bench. The High Court emphasized that the Tribunal, as a judicial body, was obligated to adhere to the principles of precedent. Even if the department believed that one of the judgments could be distinguished based on factual differences, this did not constitute a substantial question of law. The High Court concluded that since two benches with the same strength provided differing opinions, the Tribunal acted correctly in referring the matter to a Larger Bench. Consequently, all questions of law were answered against the Revenue, leading to the dismissal of the Tax Appeals.