Striking Down by One High Court - Binding on Other High Courts?
JULY 05, 2023
By Vijay Kumar
WHAT happens when a GST provision is struck down by a High Court? Is this decision binding on another High Court?
This issue was discussed in the National Judicial Academy some time back where several judges (past and present, of High Courts and Supreme Court) and academics participated.
Justice G. Raghuram sharing his experience as President of a tribunal, CESTAT opined that the process of invalidation and interpretation of a statute looks similar; if a judgement of a High Court interpreting the statute has persuasive value on other High Courts, then a judgement invalidating a statute should also have persuasive value only. He said that these differences of opinions are bound to exist and if one High Court is bound by invalidation of other, then they should also be bound by in pari materia statutes of other states.
One of the participants said that if one High Court invalidates a particular Act, it must be invalidated in other High Courts also. What would be binding then if two High Courts on the same day give contradicting opinions? There has to be certainty and uniformity across the country.
In several cases, where the levy of Service Tax was struck down by a High Court, the assessees were in a dilemma whether to pay the tax or not to pay.
In 2009, when the Delhi High Court struck down Service tax on renting, the Chennai Service Tax Commissioner in an RAC Meeting clarified,
Board was aware of the decision of the Hon'ble High Court of Delhi and a SLP along with Stay Petition has been filed before the Hon'ble Supreme Court of India. It would be incorrect to stop payment of service tax, as otherwise demand notice would be issued by the jurisdictional officers invoking interest and penalty provisions. In the event of Revenue winning the appeal, the responsibility for the payment of applicable Service Tax with interest would squarely fall on the landlord. Hence, till the Hon'ble Supreme Court decides the case, it would be proper to mention service tax in the bills and remit the tax collected into the Govt. Account.
Incidentally, in the case of Dr. T. Rajakumari & Ors vs. Govt. of Tamil Nadu (2016), the Madras High Court held –
"It is trite to say that once a High Court has struck down the provisions of the Central Act, it cannot be said that it would be selectively applied in other States. Thus, there is no question of applicability of provisions struck down by the High Court as of now until and unless the Hon'ble Supreme Court upsets the Judgment or stays the operation of the Judgment."
Way back in 2004, the Supreme Court in Kusum Ingots - 2004-TIOL-117-SC-CX-LB observed,
21. A parliamentary legislation when receives the assent of the President of India and published in an Official Gazette, unless specifically excluded, will apply to the entire territory of India. If passing of a legislation gives rise to a cause of action, a writ petition questioning the constitutionality thereof can be filed in any High Court of the country. It is not so done because a cause of action will arise only when the provisions of the Act or some of them which were implemented shall give rise to civil or evil consequences to the petitioner. A writ court, it is well settled would not determine a constitutional question in vacuum.
22. The court must have the requisite territorial jurisdiction. An order passed on writ petition questioning the constitutionality of a Parliamentary Act whether interim or final keeping in view the provisions contained in Clause (2) of Article 226 of the Constitution of India, will have effect throughout the territory of India subject of course to the applicability of the Act.
Following Kusum Ingots, the Madras High Court recently held (W.P.(MD) Nos.17210 and 18015 of 2022 - 08.06.2023),
The law is settled to the effect that once a provision of the Central Law or a Rule is held to be unconstitutional by a High Court, the same would stand effaced from the statute book in respect of the entire Nation and it cannot be said that it would not be valid within the jurisdiction of the particular High Court and it would be valid in other areas.
Supreme Court not bound by its own decisions:
As per Article 141 of the Constitution of India, The law declared by the Supreme Court shall be binding on all courts within the territory of India.
Does all courts include the Supreme Court of India?
The Supreme Court in Bengal Immunity Co. vs. State of Bihar (1955) considered this question and observed,
There is nothing in our Constitution which prevents us from departing from a previous decision if we are convinced of its error and its baneful effect on the general interests of the public. Article 141 which lays down that the law declared by this Court shall be binding on all Courts within the territory of India quite obviously refers to Courts other than this Court.
It has been urged before us that the phrase "all Courts" is comprehensive enough to include the Supreme Court. It is, pointed out, that since every decision declares the law, a later decision declaring the law in a contrary sense, would in effect, be the exercise of legislative function which must be taken to have been impliedly prohibited. While these arguments are not without force, it is reasonably clear, in the context of article 141, that the phrase "all Courts" must refer to Courts other than the Supreme Court. In the absence, therefore, of any clear provision in the Constitution and in view of the fact that this Court has historically succeeded to the pre-existing Federal Court and the Judicial Committee of the Privy Council, we cannot deny to this Court, the competence to reconsider its prior decisions.
This issue had an interesting discussion in the Constituent Assembly which ended abruptly with Dr. Ambedkar declaiming "All courts" means "all other courts." This was Article 117 in the draft constitution. The proceedings were as follows:
Article 117
|
President: We then come to article 117.
H. V. Kamath: Mr. President, Sir, I move:
That in article 117, for the words ‘all courts’ the words ‘all other courts’ be substituted.
H. V. Kamath: So, if this is accepted, the article will read thus:
That law declared by the Supreme Court shall be binding on all other courts within the territory of India.
H. V. Kamath: I have no doubt in my own mind that this article does not seek to bind the Supreme Court by its own judgments. What is intended by the article is, I am sure, that other courts subordinate to the Supreme Court in this land shall be bound by the judgments and the law declared by the Supreme Court from time to time. It will be unwise to bind the Supreme Court itself, because in order to ensure elasticity, in order to enable mistakes and errors to be rectified, and to leave room for growth, the Supreme Court will have to be excluded from the purview of this article. The Supreme Court may amend its own judgments or its own interpretation of the law which it might have made on a previous occasion and rectify the errors it has committed earlier. Therefore, I feel that the intention of this article would be correctly and precisely conveyed by saying that the law of the Supreme Court shall be binding on "all other courts" within the territory of India.
B. R. Ambedkar: Sir, there is one point which I should like to mention. It is not certainly the intention of the proposed article that the Supreme Court should be bound by its own decision like the House of Lords. The Supreme Court would be free to change its decision and take a different view from the one which it had taken before. So far as the language is concerned, I am quite satisfied that the intention is carried out.
H. V. Kamath: Then why not say "all other courts"?
B. R. Ambedkar: "All courts" means "all other courts."
President: The question is:
"That in article 117, for the words ‘all courts’ the words ‘all other courts’ be substituted."
The amendment was negatived.
President: The question is:
"That article 117 stand part of the Constitution."
The motion was adopted.
Article 117 was added to the Constitution.
|
The Supreme Court in Union of India vs. Raghubir Singh (1989) forcefully observed,
The question then is not whether the Supreme Court is bound by its own previous decisions. It is not. The question is under what circumstances and within what limits and in what manner should the highest Court overturn its own pronouncements.
It is in order to guard against the possibility of inconsistent decisions on points of law by different Division Benches that the rule has been evolved, in order to promote consistency and certainty in the development of the law and its contemporary status, that the statement of the law by a Division Bench is considered binding on a Division Bench of the same or lesser number of Judges. This principle has been followed in India by several generations of Judges.
And finally, the above mentioned five-member Constitution Bench of the Supreme Court pronounced:
We are of opinion that a pronouncement of law by a Division Bench of this Court is binding on a Division Bench of the same or a smaller number of Judges, and in order that such decision be binding, it is not necessary that it should be a decision rendered by the Full Court or a Constitution Bench of the Court. We would, however, like to think that for the purpose of imparting certainty and endowing due authority decisions of this Court in the future should be rendered by Division Benches of at least three Judges unless, for compelling reasons that is not conveniently possible.
What is a Constitution Bench? As per Article 145(3), "The minimum number of Judges who are to sit for the purpose of deciding any case involving a substantial question of law as to the interpretation of this Constitution or for the purpose of hearing any reference under Article 143 shall be five".
It is not determined so far as to what constitutes "substantial questions of law" that "involve Constitutional interpretation".
Until Next week
