Binding prior tax ruling requires inconsistent assessment orders to be quashed and reconsidered afresh

An assessment that conflicts with a binding prior Division Bench ruling on the applicable sales tax position cannot be sustained. The Madras HC noted that the earlier decision had already settled the governing principles for assessment, levy and collection for the relevant period, so the impugned assessments required fresh consideration in conformity with that ruling. The proper course was to set aside the inconsistent orders and remit the matter to the assessing authority for reconsideration after giving the assessee due opportunity. The writ petitions therefore succeeded, and the assessments were directed to be redetermined in accordance with law and the earlier binding decision.

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Issues: Whether the impugned assessment orders were liable to be set aside and the matter remanded in view of the binding Division Bench decision on the applicable sales tax position.

Analysis: The Division Bench had already considered the legal controversy and issued conclusions governing assessment, levy and collection of tax for the relevant period. Since the impugned order and assessment orders were inconsistent with those directions, they could not be sustained. The proper course was to set aside the assessments and require fresh consideration by the assessing authority in accordance with the earlier binding directions, after affording due opportunity to the assessee.

Conclusion: The assessment orders were quashed and the matter was remanded for fresh assessment in terms of the binding prior decision, in favour of the assessee.

Final Conclusion: The writ petitions succeeded, and the tax assessments were directed to be reconsidered afresh by the competent authority in accordance with law and the earlier Division Bench ruling.

Ratio Decidendi: Where an assessment order is inconsistent with a binding prior decision that settles the governing tax position, the assessment must be set aside and remitted for fresh adjudication in conformity with that decision after due opportunity to the assessee.

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