1990 (8) TMI 140 - SC - Customs

Tribunal has judicial power and can use incidental powers; Section 129-C allows referring cases to larger Bench when conflicts arise

SC held the Tribunal is a judicial body with the express and necessary incidental powers to make its statutory jurisdiction effective. The President's ... Power to refer to a larger Bench - incidental and ancillary powers of a tribunal - binding effect of earlier Bench decisions and judicial discipline - construction of Section 129C(5) and Section 129C(6) - continuity, certainty and predictability in tribunal decisionsPower to refer to a larger Bench - construction of Section 129C(5) - binding effect of earlier Bench decisions and judicial discipline - Whether a Bench of two members may express doubt about the correctness of an earlier decision of a larger Bench and have the case placed before the President for reference to a larger Bench, and whether the President may constitute such a larger Bench under Section 129C(5). - HELD THAT: - The Court held that while a Bench of two members should not lightly disregard an earlier decision of another Bench-particularly when rendered by a larger Bench-continuity and predictability must be balanced against the judicial freedom to doubt an earlier ruling if it appears erroneous in subsequent proceedings. Sub section (5) of Section 129C, read with the statutory scheme, permits reference by the President where members of a Bench are equally divided; that power of reference is to be construed sufficiently widely to include situations where members find themselves unable honestly to decide a case because of an impediment arising from an earlier decision. The President therefore has authority to constitute a larger Bench to resolve the points stated by the Bench which doubted the earlier decision. The Court emphasised that the Tribunal, though a creature of statute with no plenary inherent jurisdiction, possesses such incidental and ancillary powers as are reasonably necessary to make effective the express grants conferred by the Act; this includes the capacity to refer matters to larger Benches for correct and efficacious administration of its judicial functions. Applying these principles, the Bench of two members acted within power in stating points of law for reference, and the President acted within power in constituting a larger Bench to decide those points. [Paras 8, 9, 10, 11, 12]The Bench correctly stated points for reference and the President lawfully constituted a larger Bench; the High Court's setting aside of those orders was wrongful.Final Conclusion: The impugned judgment of the High Court setting aside the Tribunal's orders is set aside; the appeal is allowed and the High Court order quashed, with costs. Issues:Appeal against setting aside of Tribunal's orders by High Court - Doubt on correctness of earlier decision - Reference to larger Bench - Jurisdiction of Tribunal to refer cases to larger Bench - Interpretation of Customs Act, 1962 - Powers and functions of Tribunal - President's authority to refer cases to larger Bench.Analysis:The appeal before the Supreme Court arose from the Delhi High Court's judgment setting aside two orders of the Customs, Excise and Gold (Control) Appellate Tribunal. The Tribunal's Bench of two members doubted the correctness of an earlier decision and referred the case to the President for a larger Bench. The High Court struck down these orders, citing the need to follow precedent and judicial discipline.In the Bakelite Hylam case, a three-member Bench classified goods under Tariff Item 84.60, but Customs authorities classified them differently. The importer appealed, relying on Bakelite Hylam's decision. The Tribunal's actions were challenged, leading to the High Court's decision.The Union of India argued that the Tribunal has the power to constitute larger Benches under Section 129 C of the Customs Act, 1962, to resolve conflicts. They contended that restricting the Tribunal's jurisdiction would hinder legal growth and evolution.The importer's counsel argued that the Tribunal's powers are limited to statutory provisions and do not include the authority to refer cases to larger Benches based on doubts about earlier decisions. They emphasized the need to follow precedent and leave corrections to higher courts.The Tribunal's powers, as outlined in Section 129 of the Act, include the authority to regulate its procedure and refer cases in case of differing opinions. The Tribunal functions as a court within its jurisdiction, with powers granted by statute and implied powers necessary for effective execution.While a Bench should not disregard earlier decisions lightly, judicial freedom to doubt correctness is essential. The President's power to refer cases to larger Benches is crucial for effective functioning, even if not explicitly stated for doubts on earlier decisions.The Supreme Court held that the Tribunal acted within its powers by referring the case to a larger Bench. The Court set aside the High Court's judgment, allowing the appeal with costs.In conclusion, the judgment clarifies the Tribunal's authority to refer cases to larger Benches when doubts arise on earlier decisions, ensuring effective judicial functioning within statutory limits.