Consistent tax treatment across assessment years bars an unexplained change in stance on the same commodity.

The department's consistent acceptance of empty gelatin capsules under the lower-rate entry in earlier and later assessment years, including withdrawal of a proposed revision on the same basis, meant it could not later adopt a contrary tax position for the same assessee and commodity without justification. Although res judicata does not strictly apply to tax proceedings, a fundamental factual and legal position repeatedly accepted across assessment years should ordinarily not be disturbed. The higher-rate revision was therefore unsustainable and was set aside in favour of the assessee.

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Issues: Whether the department could take a different stand on the taxability of the same commodity for one assessment year when it had accepted the assessee's stand for preceding and subsequent years.

Analysis: The commodity, empty gelatin capsules, had been treated by the department as falling under the lower-rate entry in earlier and later years, and even a proposed revision on the same footing had been dropped. The Court applied the principle that although res judicata does not strictly apply to tax proceedings, a fundamental aspect consistently accepted across assessment years should not ordinarily be altered without justification. In such circumstances, an inconsistent position for the same assessee and the same commodity was held to be improper.

Conclusion: The revision order levying tax at the higher rate could not be sustained and was set aside in favour of the assessee.

Ratio Decidendi: Where a fundamental factual and legal position concerning the same assessee and commodity has been accepted by the department across assessment years, the department should not depart from that consistent view in a later proceeding without justification, even though res judicata does not strictly apply to tax matters.

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