Precedent not to be followed blindly Sukumar Mukhopadyay In a very recent judgment in the case of CCE v Doaba Steel Rolling Mills reported in 2011 (269) E.L.T. 298 (S.C.),the Supreme Court has underlined the importance of following precedents in judicial pronouncing decisions. It has quoted another judgment of the same court in the case of Sub-Inspector and another v Lt Governor reported in (2000) 1 SCC 644 which is the following, “Precedents which enunciate rules of law form the foundation of administration of justice under our system. This is a fundamental principle which every presiding officer of a judicial forum ought to know, for consistency in interpretation of law alone can lead to public confidence in our judicial system. This Court has laid down time and again that precedent law must be followed by all concerned; deviation from the same should be only on a procedure known to law. A subordinate court is bound by the enunciation of law made by the superior courts. “At the same time the Court has observed sounding a caution that just because Revenue has not appealed against a judgment of the Supreme Court in one case, it is not as if it cannot file appeal in another case. This shows that the Supreme Court wants to preserve the binding nature of its judgments but also admits some limitations so that precedent do not impart absolute rigidity in the system. That is to say, new thinking cannot be gagged. There are both of sides of the picture. In a relatively recent judgment, the Supreme Court in the case of Birla Corporation Ltd. vs. Commissioner of Central Excise, reported in 2005(186)ELT266(SC) has come down heavily on the Revenue for ignoring a Supreme Court decision exactly on the same issue. The Supreme Court has held that Revenue cannot be permitted to take a different stand in a case where the same issue has been decided earlier by the Supreme Court and is therefore a settled issue. The Revenue has taken a conscious decision to accept the principles laid down already in a previous case cannot now be permitted to take an opposite stand now. The Court held the following: “If we were to permit them to do so, the law will be in a state of confusion and will place the authorities as well as the accesses in a quandary”. The basic issue, therefore , is not without controversy. There is no doubt that if there is a clear Supreme Court judgement on the issue, it is binding as a precedent. But it may not be a precedent when the Court calls it a ‘special case’, as held in the case of D. Navinchandra & Co. vs. U.O.I. – 1989(43)ELT266(Bom.). There are other High Courts judgements, which say that even if the Supreme Court has said that it is a special case, it will still be a precedent if the facts are identical. Supreme Court judgement, however, cannot be a precedent when it is a rejection of an Special Leave Petition (SLP) in limie, that is without going into the merit. The real problem arises when the Supreme Court judgements differ on the same issue. The same is true for High Courts judgements. There have been occasions when some High Courts have given decisions on one side whereas some other High Courts have decided the exact opposite. Examples are, (i) if full exemption is same as excisability; (ii) in relation to promissory estoppel if delegated legislation is to be treated as executive or legislative action; (iii) if a factory built at site is excisable and so on. There are several controversial issues in respect of the application of precedents but we may try to derive a consensus on the following lines. The Supreme Court judgments are binding precedents for the same type of cases even if the Supreme Court says that they are not. They are not precedents if they are decisions for technical reasons and not on merits. If two judgments differ without one superseding the other, then it is a matter of choice. High Court judgments are binding in their own jurisdiction and also in other States if there is no other judgment. But if several judgments differ, then the lower authorities administering an all-India statute can choose the one suiting their facts and purpose. They can also go by the view of the majority of the differing judgments. Wrong judgment by a High Court does not bind its successor. Tribunal’s judgments are not expositions of law but on the points decided by it, the lower authorities are bound by them. In that particular case it binds the Department which has to follow it even if there may be a general judgment of the High Court to the contrary. The Department’s own decisions also bind itself but to an extent. A patently wrong decision cannot bind the Department’s hands to continue to give benefit to other parties just because one has got it. Judgments given by the Courts in respect of one fiscal Act can be a precedent for cases in other fiscal cases if they are similar. The conclusion is that precedents are binding only in the context of the facts of the case. case case. The binding role of precedent has been described by the Supreme Court in the case of Mumbai Kamghar Sabha v. Abdullabhai Faizullabhai - 1976 (3) SCC 832 in the following words: “It is trite, going by Anglophonic principles that a ruling of the superior court is binding law. It is not of scriptural sanctity but is of ratio-wise luminosity within the edifice of facts where the judicial lamp plays the legal flame. Beyond those walls and de hors the milieu we cannot impart eternal value to the decision, exalting the doctrine of precedents into a prison-house of bigotry, regardless of varying circumstances and myriad developments. Realism dictates that a judgment has to be read subject to the facts directly presented for consideration and not affecting those matters which lurk in the record”.
Posted on: Sat, 26 Oct 2013 08:07:58 +0000
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