J.S. Polymers India (P.) Ltd. vs State of Haryana and Another

Rajive Bhalla, J.—The appellant is before us challenging order dated January 9, 2012, passed by the Haryana Tax Tribunal (hereinafter referred to as "the Tribunal") at Chandigarh, by a five-Member Bench under the Haryana Value Added Tax Act, 2003. The controversy before the Haryana VAT Tribunal was whether job-work carried out by an exempted unit can or cannot be included while calculating production for the purpose of rule 28A(11)(a)(i) of the Haryana General Sales Tax Rules, 1975 (hereinafter referred to as "the Rules"). The reference has been answered against the appellant.

The counsel for the appellant relies upon judgments of the honourable Supreme Court in Commercial Taxes Officer, Jodhpur Vs. Vishnu Metals, and Vishwanath Jhunjhunwala Vs. State of Uttar Pradesh and Another, , to contend that judgment of this court in Laurel Organics Ltd. v. State of Haryana [2007] 6 VST 38 (P & H) is no longer good law. The counsel for the appellant further submits that this argument was raised before the Tribunal but has been answered by holding that the Tribunal is not competent to go into the question whether judgment of the High Court continues to hold the field and it is for the High Court to decide this matter.

The counsel for the State of Haryana submits that as the appellant did not maintain average production for the next five years, the question posed is purely academic and there was no need for a reference to a Larger Bench of the Tribunal. It is contended that the learned Tribunal may not be entirely correct in holding that it is not required to record an opinion with respect to the Division Bench judgments based upon law laid down by the honourable Supreme Court but as the controversy is merely academic, the appeal may be dismissed.

We have heard counsel for the parties and perused the impugned order. As referred to in the preceding paragraphs, the controversy, in hand, apart from other matters, arises from a reference answered by a five-Member Bench of the Tribunal. After considering the arguments and in essence recording conclusions, the Tribunal proceeded to abdicate its powers on an erroneous premise that it has no jurisdiction to opine whether an order passed by this court is no longer good law in view of the subsequent judgments of the honourable Supreme Court. The Tribunal was apparently unaware that law laid down by the honourable Supreme Court cannot be ignored merely because a Division Bench of a High Court may or may not have taken a contrary view. The Supreme Court of India sits at the pinnacle of the system of administration of justice, and its orders prevail over all other orders. A Tribunal, exercising judicial or quasi-judicial powers cannot refuse to consider judgments of the honourable Supreme Court by holding that it is for the High Court to decide whether its opinion subsists. The Tribunal, in our considered opinion, while recording that it has no power to consider the Supreme Court''s judgments viz-a-viz a Division Bench judgment of this court, has misdirected itself and failed to comprehend the nature of its jurisdiction as a quasi-judicial authority.

In view of what has been recorded hereinabove, the appeal is allowed, the impugned order dated January 9, 2012, is set aside and the Tribunal is directed to answer the reference afresh and decide the appeal on merits.

Parties are directed to appear before the Haryana Tax Tribunal at Chandigarh, on January 30, 2014. Any opinion as to the merits of the controversy shall be disregarded by the Tribunal.