Final appellate tax directions bind subordinate authorities; contrary assessment under Tamil Nadu sales tax law was unsustainable.

Where an appellate authority has directed that disputed turnover be assessed under Section 3-D(2) of the Tamil Nadu General Sales Tax Act, 1959, and that direction has attained finality, subordinate tax authorities must give effect to it. The Tribunal could not ignore the final appellate order or take a contrary view in the absence of any challenge by the Revenue. The Madras HC held that judicial discipline required compliance with the binding direction, and the contrary assessment order was unsustainable. The revision succeeded, the Tribunal's order was set aside, and the first appellate authority's order restoring assessment under Section 3-D(2) was reinstated.

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Issues: Whether the assessee's turnover for the relevant assessment year was required to be assessed under Section 3-D(2) of the Tamil Nadu General Sales Tax Act, 1959, and whether the Tribunal could disregard the earlier appellate direction that had attained finality.

Analysis: The assessee had been assessed under Section 3-D(2) for several surrounding assessment years, and an earlier appellate authority had expressly directed assessment of the disputed turnover under that provision. That direction was not challenged by the Revenue and had therefore attained finality. In these circumstances, judicial discipline required the assessing authority to follow the binding appellate direction. A subordinate authority cannot act contrary to a final order of the appellate hierarchy, and the Tribunal erred in ignoring that settled position.

Conclusion: The disputed assessment ought to have been made under Section 3-D(2) of the Tamil Nadu General Sales Tax Act, 1959, and the Tribunal's contrary order was unsustainable. The issue was decided in favour of the assessee.

Final Conclusion: The revision succeeded, the Tribunal's order was set aside, and the first appellate authority's order restoring assessment under Section 3-D(2) was reinstated.

Ratio Decidendi: Where an appellate order has attained finality, subordinate tax authorities are bound to comply with it and cannot re-open or disregard the direction in the absence of an appeal by the Revenue.

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