A Bench of co-equal strength must follow decision of another Bench of co-equal strength

East India Udyog Ltd. Vs State of Jharkhand (Jharkhand High Court)

This case involves a challenge to orders and demand notices related to the imposition of interest under the Goods and Services Tax (GST) Act for delayed filing of returns. The petitioner, East India Udyog Ltd., contested the imposition of interest without proper adjudication.

The petitioner argued that interest cannot be levied without adjudication, citing precedents such as “M/s Nkas Services Private Limited Vs. The State of Jharkhand” and “R.K. Transport Private Limited, Phusro, Bokaro Vs. The Union of India.” These cases established that the recovery proceedings under Section 73 of the JGST Act cannot be initiated without a final adjudication.

The state, represented by Mr. Ashok Kumar Yadav, countered this argument by referring to the case “Narsingh Ispat Limited through its Director Sri Ajay Kumar Singh Vs. Union of India,” claiming that once the petitioner admits default, and the statutory authorities address their plea, the court may not entertain the petition.

However, the court, following the principle of judicial discipline, ruled in favor of the petitioner. It cited the precedent that a bench of co-equal strength must follow the decision of another bench of co-equal strength, as established in “Chandra Prakash Vs. State of U.P” and “State of Bihar Vs. Kalika Kuer.” Consequently, the court set aside the orders and demand notices, granting the department the liberty to initiate adjudication proceedings if deemed necessary.

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