1960 (9) TMI 11 - SC - Income Tax

Whether the learned Judicial Commissioner of Bhopal rightly dismissed a petition under article 226 of the Constitution made by the Bhopal Sugar Industries Limited, hereinafter referred to as the appellant company, praying for the issue of an appropriate order or direction in the nature of a writ of mandamus to compel the Income-tax Officer, Bhopal, respondent herein, to carry out certain directions given by the Income-tax Appellate Tribunal, Bombay, to the said officer in an appeal preferred by the appellant company from an order of assessment made against it by the respondent? Held that - By the impugned order the respondent failed to carry out a legal duty imposed on him and such failure was destructive of a basic principle of justice, a writ of mandamus should issue ex debito justitiae to compel the respondent to carry out the directions given to him by the Income-tax Appellate Tribunal, Bombay, and it is unnecessary to consider the decisions referred to above except merely to state that in none of them arose any question of condoning a refusal by an inferior tribunal to carry out the directions given to that tribunal by a superior tribunal in the undoubted exercise of its appellate powers, on the ground that the order of the superior tribunal was wrong. Appeal allowed.

Summary

Issues:
- Interpretation of directions given by the Income-tax Appellate Tribunal
- Failure of the respondent to carry out the directions
- Legal duty of the respondent to comply with the Tribunal's directions
- Justification for issuance of a writ of mandamus
- Error in the judgment of the Judicial Commissioner

Interpretation of Directions from Tribunal:
The case involved a dispute regarding the market value of sugarcane grown by an appellant company on its own farms. The Tribunal directed the respondent, an Income-tax Officer, to calculate the market value based on specific criteria. The Tribunal's directions were clear and unambiguous, focusing on transport charges and pricing per maund of sugarcane.

Failure to Comply with Tribunal's Directions:
Despite clear directions from the Tribunal, the respondent failed to carry them out correctly. The respondent misread the Tribunal's instructions and based his calculations on a different premise, leading to a refusal to implement the Tribunal's decision. This failure to comply with superior tribunal directions amounted to a denial of justice and a breach of the hierarchy of courts.

Legal Duty to Comply:
The judgment highlighted the legal duty of a subordinate tribunal to adhere to the directions of a superior tribunal, especially in matters of appellate decisions. Refusal to implement such directions undermines the administration of justice and creates chaos within the legal system. The respondent's actions in disregarding the Tribunal's orders were deemed illegal and arbitrary.

Justification for Issuance of Mandamus:
The court found that the respondent's refusal to follow the Tribunal's directions constituted a denial of justice and a violation of legal principles. The judgment emphasized that a writ of mandamus should be issued ex debito justitiae to compel the respondent to comply with the Tribunal's directives. The refusal to implement the Tribunal's decision was considered a serious breach of legal duty.

Error in the Judicial Commissioner's Judgment:
The Judicial Commissioner erred in dismissing the appellant company's application for a writ of mandamus. The Supreme Court held that the Judicial Commissioner's reasoning, which suggested no manifest injustice resulted from the respondent's refusal to follow the Tribunal's directions, was flawed. The Supreme Court overturned the Judicial Commissioner's decision and ordered the respondent to carry out the Tribunal's directives.