In an old judgement but useful Judgment Bombay High Court in the case of CIT Vs. Godavari Saraf held that until contrary decision is given by any other competent High Court, which is binding on a Tribunal in the relevant State, it has to proceed on the footing that the law declared by the High Court, though of another State, is the final law of the land. Which means that once a decision is given by any of the High Courts in the country and there is no contrary decision by any other High Court on the same issue then such decision of High Court will be binding on all the administrative authorities and Tribunals through out India.
I personally have seen some authorities at department level arguing that a judgement of High Court of other State is not binding on them. The following judgement makes it clear that when a view has been taken by a High Court of any State and there is no contrary view by any other High Court or Supreme Court on the same issue then such order of the High Court will be binding on all the subordinate authorities and Tribunals below the rank of High Court through out the country.
In this case a law was declared ultra vires by the Madras High Court and no contrary view was there by any other High Court, the Tribunal proceeded on the basis of the Judgment of Madras High Court, it was held by Bombay High Court as follows:
“Until contrary decision is given by any other competent High Court, which is binding on a Tribunal in the State of Bombay, it has to proceed on the footing that the law declared by the High Court, though of another State, is the final law of the land. When the Tribunal set aside the order of penalty it did not go into the question of intra vires or ultra vires. It did not go into the question of constitutionality of section 140A(3). That section was already declared ultra vires by a competent High Court in the country and an authority like an Income-tax Tribunal acting anywhere in the country has to respect the law laid down by the High Court, though of a different State, so long as there is no contrary decision of any other High Court on that question. It is admitted before us that at the time when the Tribunal decided the question, no other High Court in the country had taken a contrary view on the question of constitutionality of section 140A(3). That being the position, it is not possible for us to take the view that the Tribunal in Bombay, when it set aside the order of penalty, went into the question of the constitutionality of that section and gave a finding that it is ultra vires following the decision of the Madras High Court. What the Tribunal really did was that in view of the law pronounced by the Madras High Court it proceeded on the footing that section 140A(3) was non-existent and so the order of penalty passed thereunder cannot be sustained.”
FULL TEXT OF THE JUDGEMENT IS AS FOLLOWS:-
Bombay High Court
Commissioner Of Income Tax
Vs
Godavaridevi Saraf
on 27 September, 1977
Equivalent citations: 1978 (2) ELT 624 Bom, 1978 113 ITR 589 Bom
JUDGMENT
