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TMI Blog2001 (8) TMI 1343X X X X Extracts X X X X X X X X Extracts X X X X ..... uty Commissioner all on a sudden held in his order dated September 22, 1999 that the garments were not readymade garments rather, are made for the use of defence personnel according to the order placed by the authority. The rate of tax, therefore, was held to be 4 per cent and not 3 per cent. The Appellate and Revisional Board also took the same view and confirmed the order of the learned Deputy Commissioner. 3.. It is argued on behalf of the petitioner that since long it is being accepted by the Revenue that the garments supplied by the petitioner to the defence authority are the "readymade garments" and not the "garments made to order" and tax at the rate of 3 per cent is being levied. According to the petitioner, the user since has n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o general public like readymade garments. Those are made in bulk as per the order placed by the defence authority. It is not necessary that negotiation with manufacturer has always to be done by the particular user directly. Somebody may place the orders on behalf of the users who are ready to use those garments being categorised in a group or class according to their respective profession. On the principle of res judicata, the learned State Representative submits that it does not apply in this case inasmuch as, the dealer cannot take advantage of the mistake of the Revenue in levying tax at the rate of 3 per cent, though it should have been at the rate of 4 per cent. 6.. The points for consideration, therefore, are (i) if the garments ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced and never beforehand. The garments of defence personnel are also never displayed in the market for general customers. The findings of the learned Deputy Commissioner and the learned Members of the Appellate and Revisional Board, therefore, are proper and correct on this issue. 8.. Now the question is, whether on application of the principle of res judicata, if tax is to be levied at the rate of 3 per cent. The principle of res judicata generally does not apply in tax laws. In a case reported in [1992] 193 ITR 321 (SC) (Radhasoami Satsang v. Commissioner of Income-tax) the following observations were made (page 329): "We are aware of the fact that, strictly speaking, res judicata does not apply to income-tax proceedings. Again, each ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after dealing with the contention the Madras High Court expressed the following opinion (p. 242): "....where the question relating to assessment does not vary with the income every year but depends on the nature of the property or any other question on which the rights of the parties to be taxed are based, e.g., whether a certain property is trust property or not, it has nothing to do with the fluctuations in the income; such questions, if decided by a court on a reference made to it would be res judicata in that the same question cannot be subsequently agitated." 10.. The honourable court further considered the following observations made in Parashuram Pottery Works Co. Ltd. v. Incometax Officer, Circle I, Ward A, Rajkot [1977] 106 IT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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