Binding effect of an unappealed income-tax reference judgment barred further recovery and required repayment.

An unappealed High Court judgment in income-tax reference proceedings bound the parties in that case and had to be given effect by the tax authorities according to its terms, even if its construction of the charging provision was later said to be erroneous. On that basis, the earlier decision precluded recovery of the balance demand and required repayment of the amount already collected. The controlling principle was that a reference judgment, once left unchallenged, determines the assessment consequences between the parties for that case.

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Issues: Whether an earlier unappealed High Court judgment under the income-tax reference procedure bound the parties and the income-tax authorities so as to require refund of the amount already paid and preclude recovery of the balance demand.

Analysis: The judgment held that the earlier reference decision, though its construction of the charging provision was later argued to be erroneous, had never been appealed against and therefore governed the rights of the parties in that particular case. Under the reference provisions, the High Court's judgment was to be acted upon by the income-tax authorities conformably to its terms, and the case had to be disposed of in accordance with that judgment. On that footing, the earlier decision was treated as determining that the State was liable only in the manner stated in that judgment, with the consequence that no further sum could be collected and the amount already paid had to be returned.

Conclusion: The earlier judgment was binding between the parties, the demand for the balance could not be enforced, and the State was entitled to refund of the amount paid.

Final Conclusion: The appeal failed because the prior unchallenged reference judgment controlled the assessment consequences in the case, leaving the assessee entitled to both relief from further recovery and repayment of the amount already collected.

Ratio Decidendi: In income-tax reference proceedings, an unappealed High Court judgment is binding between the parties in the particular case and must be given effect by the authorities according to its terms, even if its legal construction is later said to be wrong.

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