Garware Polyester vs. State (Bombay High Court)
The AO passed an assessment order in which he declined to follow the judgement of the Bombay High Court in CST vs. Pee Vee Textiles 26 VST 281 on the ground that the said judgement “is not accepted by the Sales Tax Department and legal proceeding is initiated against the said judgment”. On a Writ Petition filed by the assessee, the High Court has taken the view that as the said judgement in Pee Vee Textiles is not stayed, “the refusal to follow and implement the judgment of this Court by Mr.Dubey in our considered view prima facie amounts to contempt of this Court”. The Court directed issue of a show-cause notice to the AO as to why action under the Contempt of Courts Act should not be initiated against him.
Note: In Kamalakshi Finance Corporation 53 ELT 433 (SC), ITO vs. Siemens India 156 ITR 11 (Bom) & Bank of Baroda vs. Srivastava 122 TM 330 (Bom) it was held that even the Tribunal’s order is binding on the AO. See Also Mercedes Benz vs. UOI (Bom) on the importance of judicial discipline.