2008 (7) TMI 10 - SC - Income Tax

Assessee takes the stand that the revenue acted mala fide in not preferring appeal in one case and filing the appeal in other case assessee not established malafides of revenue revenue contention that because of the small amount of revenue involved & because of revenue neutrality, no appeal is filed, is acceptable held that merely because in some cases the revenue has not preferred appeal that does not operate as a bar for the revenue to prefer an appeal in another case

Summary

Issues:
1. Whether revenue can be precluded from defending itself by relying upon contrary decisions.

Analysis:
The Supreme Court was tasked with deciding whether the revenue can be prevented from defending itself by relying on contrary decisions. The reference stemmed from conflicting views among various High Courts regarding this issue. The Court referred to past decisions to analyze the matter comprehensively. In the case of Bharat Sanchar Nigam Ltd. v. Union of India, it was highlighted that the principle of res judicata does not apply to tax matters for different assessment years, emphasizing the importance of precedent in maintaining consistency unless there are new grounds or factual changes. The Court clarified that a decision can be set aside in subsequent cases if the facts and law remain the same, subject to certain exceptions like distinguishing the earlier decision or if it was per incuriam.

Furthermore, the Court referred to the case of State of Maharashtra v. Digambar, emphasizing that the non-filing of appeals in similar matters should not bar the State from filing appeals in other cases if it is in the interest of the State or public interest. The judgment in Government of W.B. v. Tarun K. Roy reiterated the importance of considering arguments on their merit, even if an appeal was not filed, and highlighted that non-filing of an appeal should not be a ground for rejecting a matter. The Court also referred to the case of State of Bihar v. Ramdeo Yadav, where it was acknowledged that public interest can warrant the Court to consider matters even without an appeal being filed.

In the final decision, the Supreme Court held that the revenue not filing an appeal in some cases does not bar it from filing an appeal in another case if there is a just cause or it is in public interest to do so. The Court emphasized that divergent views among Tribunals or High Courts may necessitate a pronouncement by a higher Court. The judgment concluded by directing the concerned Bench to dispose of the appeals accordingly.