Held - This Court in Karanja Terminal & Logistic Pvt. Ltd. V/s. Principal Commissioner of Income Tax & Ors. following the judgment of the Apex Court in Union of India and Ors. V/s. Kamlakshi Finance Corporation Ltd. has held that it is of utmost importance that in disposing of the quasi-judicial issues before them, revenue officers are bound by the decisions of the appellate authorities. The order of CESTAT and the Commissioner(Appeals) is binding on respondent no.3. The principles of judicial discipline\require that the orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities. The mere fact that the order of the appellate authority was not acceptable to the department in itself would be an objectionable phrase and is the subject matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent court. The Apex Court has held that if this healthy rule is not followed, the result will only be undue harassment to assessees and chaos in administration of tax laws.

Held - Four different High Courts have also taken the view against which the SLP was preferred and earlier also the Tribunal granted refund against which the SLP was not preferred. In that view of the matter, the principle of estoppel applies as once the department has accepted the view taken by the Tribunal it will not be appropriate to challenge the same by choosing the present assessee.The judicial discipline is required to be maintained. The Tribunal cannot distinguish the High Court judgments. They are bound by the High Court judgments even jurisdictional High Court and at the most they can refer it back prior to distinguish on facts but no authority has been made. Full Bench decision of the Tribunal has to be followed.

Held - Learned Commissioner seems to be not aware of the Principle of Judicial Discipline and in particular Article 141 of the Constitution of India, which provides that the decisions of the Hon'ble Supreme Court are binding on all the Courts in India and “all Courts” includes quasi-judicial authorities also, therefore he ought to have followed the law laid by the Hon'ble Supreme Court in Ranbaxy Laboratories Ltd. (supra).When series of decisions of Constitutional Courts are available then the Principle of judicial discipline cast a duty on me to follow those and nothing else.

Held - In this connection, it would be pertinent to refer to the decision of Supreme Court in The Bhopal Sugar Industries Ltd. vs. the Income-Tax Officer, Bhopal27. The Supreme Court pointed out that it would result in chaos in the administration of justice if a subordinate Tribunal refuses to carry out directions given to it by a superior Tribunal. In fact, this would be destructive of one of the basic principles of administration of justice.In Smt. Kaushalya Devi Bogra and others vs. The Land Acquisition Officer and another 29 , the Supreme Court also observed that the direction of the Appellate Court is binding on the courts subordinate thereto and that judicial discipline requires and decorum known to law warrants that appellate directions should be taken as binding and followed.In this connection it will also be appropriate to refer to the decision of the Supreme Court in Kamlakshi Finance…..The Supreme Court also observed that the order of the Tribunal is binding upon the Assistant Collectors who functions under the jurisdiction of the Tribunal and that the principles of judicial discipline require that the orders of higher appellate authorities are unreservedly followed by the subordinate authorities.

Held - We are surprised as to how the Committee of two Commissioners has not only concluded that the Commissioner (Appeals) does not have to follow judicial discipline but have gone further to say that the Commissioner (Appeals) has erred in following the binding precedent of the jurisdictional High Court. The prayer before us is to hold that the Commissioner (Appeals) erred in following judicial discipline and that he should have not followed the binding precedent of the jurisdictional High Court because in some other case, on the same issue in which also the High Court dismissed the Revenue‟s appeal, an SLP has been admitted by the Supreme Court. The submissions of Revenue in this appeal that the Commissioner (Appeals) should have not followed the binding ruling of the jurisdictional High Court can only result in considerable harassment to the assessee-public through needless litigation without any benefit to the Revenue. The law relating to the judicial discipline was explained in clearest terms by the Supreme Court in UNION OF INDIA vs. KAMLAKSHI FINANCE CORPORATION LTD.In view of the above, we dismiss both these appeals filed by the Revenue and uphold the impugned orders.