Binding effect of High Court rulings supports rectification proceedings despite pending Supreme Court appeal

Rectification notices under section 22 of the U.P. Sales Tax Act were upheld because the earlier High Court ruling was still binding in the State until reversed by the Supreme Court, and its pendency in appeal did not suspend that force. The Court further held that a later authoritative ruling may disclose a mistake apparent from the record for rectification purposes. The notices were not invalid merely because the earlier decision might be distinguishable, since that issue required examination in the rectification proceedings after hearing the dealers. The writ petitions were dismissed and the Sales Tax Officer was permitted to proceed according to law.

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Issues: (i) whether the impugned rectification notices under section 22 of the U.P. Sales Tax Act, 1948 were ex facie bad on the ground that the earlier decision concerning similar transactions was distinguishable; and (ii) whether the Sales Tax Officer lacked power to initiate rectification proceedings merely because the earlier decision of the High Court was under appeal before the Supreme Court.

Issue (i): whether the impugned rectification notices under section 22 of the U.P. Sales Tax Act, 1948 were ex facie bad on the ground that the earlier decision concerning similar transactions was distinguishable.

Analysis: The earlier decision turned on the terms of the relevant contracts, but the present contracts were not shown, at this stage, to be materially different in a manner that would make the earlier ruling inapplicable on its face. Whether the earlier judgment governed the present assessments was held to be a matter for examination by the Sales Tax Officer in the rectification proceedings themselves, after the petitioners were heard.

Conclusion: The notices were not held to be invalid on the ground of distinguishability.

Issue (ii): whether the Sales Tax Officer lacked power to initiate rectification proceedings merely because the earlier decision of the High Court was under appeal before the Supreme Court.

Analysis: The Court treated the earlier High Court ruling as binding within the State unless and until reversed by the Supreme Court. It also accepted that a mistake disclosed by a later authoritative ruling can constitute a mistake apparent from the record for purposes of rectification under section 22 of the U.P. Sales Tax Act, 1948. The pendency of an appeal did not suspend the binding force of the High Court decision.

Conclusion: The rectification proceedings were not without jurisdiction on the ground that the earlier decision was under appeal.

Final Conclusion: The writ petitions failed, and the challenge to the rectification notices was rejected, leaving the Sales Tax Officer free to proceed in accordance with law.

Ratio Decidendi: A High Court decision remains binding within the State until reversed by the Supreme Court, and such a ruling may furnish the basis for rectification where it reveals a mistake apparent on the face of the record.

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