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S.C. Dharmadhikarl, J.—These applications seek review of the orders passed by a Division Bench of this Court in the Tax Appeals, on 25th August, 2010. It is stated that the review is necessitated because the Court has proceeded on the erroneous basis and particularly that there is a policy decision of the Central Board of Direct Taxes (CBDT) which will not allow the Revenue to present the subject-Appeal. However, there is a further circular/policy decision by the Board and had that been noticed, the Court may not have taken a view that the appeal would not be maintainable. The view is also erroneous because the tax demanded is not less than Rs. 2,00,000/- as observed by the Division Bench.
In these review applications, there were applications filed for condoning the delay in filing the same. While condoning the delay, we have specifically kept open the objection of the Counsel appearing for the respondents-assesses that no review is maintainable, enabling Review of order passed by this Court in the Tax Appeal and sub-section (7), of Section 260A of Income Tax Act, 1961 does not permit such a course.
Mr. Sonak appearing on behalf of the assessees in some of the matters submitted that the review is not maintainable and in that behalf, he invited our attention to a Division Bench Judgment of this Court in the case of The Commissioner of Income Tax-1 Vs. The West Coast Paper Mills Ltd., . In the submission of Mr. Sonak, this Judgment considers an identical provision and controversy. It has, in terms, held that sub-section (7) of Section 260A of the Income Tax Act, 1961 makes the procedure pertaining to an Appeal, as set out in the Code of Civil Procedure, 1908 applicable to appeals under Income Tax Act, 1961 and these provisions will not enable the Court to review its own order or exercise the power of review in terms of Section 114, read with Order XLVII, Rule (1) of C.P.C. as that is a distinct power. Relying upon this decision, Mr. Sonak submits that the power of review has to be specifically conferred and it cannot be assumed by the Court. The power of review is distinct from the power of recall and, therefore, the distinction between the procedural review and review on merits must be borne in mind, according to Shri Sonak, as observed by the Division Bench.
Shri Sonak then submits that against the decision of the Division Bench, a SLP was preferred by the Revenue and the said SLP came to be dismissed by the Hon''ble the Supreme Court of India on 13th May, 2011 and he handed over a copy of the said order. Mr. Sonak submits that the Division Bench Judgment has also been noted by another Division Bench of this Court in Review proceedings which arose out of the Central Excise Act, 1944.
Counsel appearing for the Assessees, in other appeals, have adopted the submissions of Shri Sonak and reiterated that the review power is not inherent in the Court and that power must be specifically conferred by a law.
On the other hand, Ms. Desai, appearing on behalf of the Revenue, contends that the provisions of Section 260A of the Income Tax Act, 1961 appear in a chapter entitled "Appeals and Revisions" (Chapter XX). She submits that the sub-heading ''CC-Appeals to High Court'' under which Section 260A of the Income Tax Act, 1961 appears, providing for an appeal to High Court, must be read meaningfully as the power of appeal is conferred by the statute, in the High Court. This power is akin to Section 100 of C.P.C. If an appeal lies on the substantial question of law u/s 100 of CPC, the High Court while exercising the appellate power in terms of this provision, is empowered to review its own orders. She submits that Section 114 of C.P.C. read with Order XLVII, Rule (1) of C.P.C. specifically confers power of review in appeal. In these circumstances, according to her, all provisions enabling the High Court, in exercise of its appellate power, to deal with first appeals and second appeals, have been made applicable, that would include the power of review. In these circumstances, sub-section (7) of Section 260A of the income tax Act, 1961 cannot be construed in a narrow and restricted manner, as contended by the assessees. That would mean only the procedural provisions relating to appeals would be engrafted and must be read into sub-section (7) of Section 260A of the income tax Act, 1961. That is not the intent of the legislature when the powers of appeal are conferred by law on this Court.
Therefore, by relying upon a Judgment of another Division Bench of this Court, which according to her, deals with identical provisions of the Customs Act, 1962 (VIP Industries Ltd. v. Commissioner of Central Excise) in Review Petition No. 33 of 2010 in Notice of Motion No. 2482/2008 in Central Excise Appeal No. 136 of 2009 dated 16th December, 2010, she submits that the view taken by the Division Bench may not be by noticing the earlier view in the case of West Coast Paper Mills Ltd. (supra), yet reference therein is to a Supreme Court Judgment, and, therefore, we must prefer this view in preference to the one taken in West Coast Paper Mills Ltd. (supra) Additionally, she submits that Special Leave Petitions from the original orders passed in Tax Appeals were preferred and the Hon''ble the Supreme Court, while disposing them of, granted liberty to the Revenue/ Department to move this Court by way of a review. In such circumstances, the review applications should not be dismissed on the ground of maintainability. She submits that in a decision reported in D.N. Singh Vs. Commissioner of Income Tax and Another , Commissioner of Customs and Central Excise Vs. Hongo India (P) Ltd. and Another, a Full Bench of Patna High Court has taken the view that a review is maintainable in Appeals under sub-section (7) of Section 260A of the Income Tax Act, 1961. She submits that the Full Bench relied upon the Hon''ble Supreme Court Judgment in the case of M.M. Thomas Vs. State of Kerala and Another, and the view taken in the case of Hongo India (P) Ltd. (supra). In such circumstances, when the Full Bench holds, relying upon the Supreme Court decision, that this Court possesses the power of review in order to correct its own errors and which are apparent on the face of the record, Ms. Desai, therefore, submits that the review be entertained and dealt with on merits.
Section 260A of the income tax Act, 1961, reads as under:
(1) An appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal, if the High Court is satisfied that the case involves a substantial question of law.
(2) The Chief Commissioner or the Commissioner or an assessee aggrieved by any order passed by the Appellate Tribunal may file an appeal to the High Court and such appeal under this sub- section shall be
(a) filed within one hundred and twenty days from the date on which the order appealed against is received by the assessee or the Chief Commissioner or Commissioner.
(b)...
(c) In the form of a memorandum of appeal precisely stating therein the substantial question of law involved.
(2A) The High Court may admit an appeal after the expiry of the period of one hundred and twenty days referred to in clause (a) of sub-section (2), if it is satisfied that there was sufficient cause for not filing the same within that period.
(3) Where the High Court is satisfied that a substantial question of law is involved in any case, it shall formulate that question.
(4) The appeal shall be heard only on the question so formulated, and the respondents shall at the hearing of the appeal, be allowed to argue that the case does not involve such question:
Provided that nothing in this sub-section shall be deemed to take away or abridge the power of the Court to hear, for reasons to be recorded, the appeal on any other substantial question of law not formulated by it, if it is satisfied that the case involves such question.
(5) The High Court shall decide the question of law so formulated and deliver such judgment thereon containing the grounds on which such decision is founded and may award such cost as it deems fit.
(6) The High Court may determine any issue which -
(a) Has not been determined by the Appellate Tribunal: or
(b) Has been wrongly determined by the Appellate Tribunal, by reason of a decision on such question of law as is referred to in sub-section (1).
(7) Save as otherwise provided in this Act, the provisions of the Code of Civil Procedure, 1908 (5 of 1908), relating to appeals to the High Court shall, as far as may be, apply in the case of appeals under this section.
A perusal thereof would reveal that sub-section (7) enacts and states that save as otherwise provided in the income tax Act, the provisions of the Code of Civil Procedure, 1908 relating to appeals to the High Court shall, as far as may be, apply in the case of appeals under this Section. Further, when this provision is read in its entirety, it is apparent that such of the provisions in the CPC which relate to appeals to the High Court, have been made applicable as far as may be by sub-section (7) of Section 260A of the income tax Act, 1961. The substantive provisions running from Sections 96 to 108 of CPC provide for appeals from original decrees, appeals from appellate decrees and appeals from orders. Section 107 of CPC states that subject to such conditions and limitations as may be prescribed (meaning thereby prescribed by Rules), the appellate Court shall have power to determine a case finally; to remand a case; to frame issues and refer them to trial; and to take additional evidence or to require such evidence to be taken. These are powers of the appellate Court and sub-section (2) of Section 107 of CPC states that subject, as aforesaid, the appellate Court shall have the same powers and shall perform as nearly as may be the same duties as are conferred and imposed by this Code on Courts of original jurisdiction in respect of the suits instituted therein. Section 108 states that the provisions of this part (meaning thereby VII), relating to appeals from original decrees shall, so far as may be, apply to appeals from appellate decrees and from orders made under this Code or under any special or local law in which a different procedure is not provided.
Section 114 of CPC falls in part VIII, which is entitled "Reference, Review and Revision". The powers of the appellate Court are prescribed by Order XLVII of CPC in so far as appeals from decrees are concerned and as far as appeals from orders are concerned, they are prescribed by Order XLIII. The entire procedure is enacted in these chapters, including empowering the Court to grant stay, and exercise such powers, including summarily dismissing an appeal. Rule 1 and ending with Rule 37 of Order XLI are the procedural rules which enable the Court to exercise the power of appeal. Similarly, order XLII prescribes the procedure for appeals from appellate decrees and Order XLIII deals with appeals from orders. It may be that the rules prescribed under Order XLI have been made applicable to the appellate powers that are exercised by this Court while dealing with appeals against appellate Decrees and the appeals against appellate orders, but what is provided by Order XLVII is a power of review. Rule 1 of Order XLVII reads as under:
Application for review of judgment - (1) Any person considering himself aggrieved -
(a) by a decree or order from which an appeal is allowed, but from which no appeal has been preferred;
(b) by a decree or order from which no appeal is allowed, or;
(c) by a decision on a reference from a Court of Small Causes,
and who, from the discovery of new and important matter of evidence which, after the exercise of due diligence, was not within his knowledge or could not be produced by him at the time when the decree was passed or order made, or on account of some mistake or error apparent on the face of the record, or for any other sufficient reason, desires to obtain a review of the decree passed or order made against him, may apply for a review of judgment of the Court which passed the decree or made the order.
(2) A party who is not appealing from a decree or order may apply for a review of judgment notwithstanding the pendency of an appeal by some other party except where the ground of such appeal is common to the applicant and the appellant, or when, being respondent, he can present to the Appellate Court the case on which he applies for the review.
In this backdrop, when the Division Bench in West Coast Paper Mills Ltd. (supra) was considering the ambit and scope of the power under sub-section (7) of Section 260A of the income tax Act, 1961, it noted the difference between the power of procedural review and the substantive power of review.
In the Code of Civil Procedure, Volume 2, by the Hon''ble Justice C.K. Thakker, it is observed that the review means re-examination or second examination of a case, to re-examine judicially. It is the act of looking something again with a view to correction or improvement. Review literally and even judicially means re-examination or reconsideration of the case by the same Judge. Learned Author says that Section 114 of CPC confers substantive right of review in certain circumstances, and order XLVII lays down procedure therefore. After referring to a Supreme Court judgment in the field, what has been observed in this work by the learned Author is that when a lis is decided by the Court and the rights of the parties have been adjudicated, the Court becomes functus officio. In the absence of express or implied power, no Court can review an order passed by it and unsettle settled matters. The learned Judge has referred to several Supreme Court decisions and has observed that a power of review should not be confused with appellate powers which enables an appellate court to correct all errors committed by the subordinate Court. Further the distinction has to be borne in mind between a procedural review and a substantive review. As a power of procedure, every Court or Tribunal can correct an inadvertent error which has crept in the order either due to procedural defect or mathematical or clerical error or by misrepresentation or fraud of a party to the proceedings, which can be corrected ex debito justitiae to prevent abuse of process of Court. However, this power cannot be equated with a power of review of an order on merits which necessitates reconsideration of the decision in given facts and circumstances and subject to compliance with the preconditions. In such circumstances, we are of the view that the Division Bench Judgment in the case of West Coast Paper Mills Ltd. (supra), being a decision considering the same provision in the same enactment and noting the aforesaid distinction that binds us. It would not be proper to brush aside a binding precedent, merely because in a later decision under a different or distinct enactment or may be dealing with somewhat identical provision, a different view has been taken by this Court. That would mean that we are ignoring or brushing aside a judgment of coordinate Bench, although the same cannot be held as per incuriam.
In these circumstances, we are unable to accept the argument of Ms. Desai, appearing on behalf of the Revenue that the power of review must be read into sub-section (7) of Section 260A of the income tax Act, 1961. For the reasons that have been set out above and bearing in mind the binding decision of the Division Bench of this Court rendered in West Coast Paper Mills Ltd. (supra), we are unable to subscribe to her view and her submissions.
Reliance by her upon the Judgment of Division Bench in VIP Industries Ltd. (supra), and the Full Bench Decision of Patna High Court, is rather misplaced. The view taken by the Full Bench of Patna High Court, speaking through the Hon''ble the Chief Justice Dipak Misra, as His Lordship then was, relying upon the same Judgment to which reference has been made and the same principle laid down by the Supreme Court decision with regard to the correction of Judgments and Decrees by recourse to powers conferred u/s 152 of CPC, or the powers akin to the same or inherent power of recall of inadvertent error, so as to prevent the abuse of its process. That power, with greatest respect, is distinct with the power of review as noted by the Division Bench. The same Judgment in the case of the Hon''ble Supreme Court in Patel Narshi Thakershi, which has been referred to and followed by another Division Bench in VIP Industries Ltd. (supra), while considering Section 35G of the Central Excise Act, 1944, has been noted in West Coast Paper Mills Ltd(supra), and relying upon the subsequent Judgment of the Supreme Court, this is what is held by the Division Bench:
The settled law is that the power of review must be specifically conferred. The Supreme Court in Grindlays Bank Limited v. Central Government Industrial Tribunal and Ors. 1980 (Supp) Supreme Court Cases 420 has made a clear distinction between substantive review and procedural review. Substantive review must be conferred whereas procedural review is inherent in every court or Tribunal. This is what the court observed:
"...The expression "review" is used in the two distinct senses, namely (1) a procedural review, which is either inherent or implied in a court or Tribunal to set aside a palpably erroneous order passed under a misapprehension by it, and (2) a review on merits when the error sought to be corrected is one of law and is apparent on the fact of the record. It is in the latter sense that the court in Patel Narshi Thakershi case held that no review lies on merits unless a statute specifically provides for it. Obviously when a review is sought due to a procedural defect, the inadvertent error committed by the Tribunal must be corrected ex debito justitiae to prevent the abuse of its process and such power inheres in every court or Tribunal."
Thereafter that view has been reiterated in J.K. Synthetics Ltd v. Collector of Central Excise, 1996 (86) E.L.T. 472 (SC). This view has been reiterated by this Court in Chandrakant Butalal Shah v. Union of India and Ors. in Writ Petition No. 1505 of 2007 decided on 6th August, 2007.
Considering the above, we are clearly of the opinion that the power of substantive review having not been conferred under the Income Tax Act, the review as filed is not maintainable. Once the Review is not maintainable, the question of considering whether there is sufficient cause does not arise. In the light of that. Review Petition along with Notice of Motion dismissed.
In these circumstances, with respect, we are unable to subscribe to the view of the Full Bench of Patna High Court. We would prefer to follow a binding precedent and particularly when the Revenue was not successful in an appeal against the said decision as well.
For the aforementioned reasons, we are of the opinion that each of these review petition are not maintainable and the Revenue cannot seek review of the orders passed by the Division Bench in the aforementioned tax appeals by invoking sub-section (7) of Section 260A of the Income Tax Act, 1961. In the result, the review applications are dismissed, but without any order as to costs.