2022 (3) TMI 1660 - HC - VAT / Sales Tax

Section 41(4) VAT audit report filing within seven days dispute; reference declined, matters sent to roster Bench.

The dominant issue was whether, under Section 41(4) of the Odisha VAT Act, 2004 (pre-amendment), the requirement that the Authorized Officer submit the ... Requirement of the Authorized Officer having to submit the audit report to the Assessing Authority within seven days from the date of completion of the audit is mandatory or directory - interpretation of statute - Section 41 (4) of the Odisha Value Added Tax Act, 2004 as it stood prior to its amendment by virtue of the Odisha Value Added Tax (Amendment) Act 2015 with effect from 1st October, 2015 - HELD THAT:- In the considered view of the Court, a Division Bench of two learned Judges of this Court is bound to follow a judgment of a coordinate Bench of same strength and if it chooses to differ from the said judgment, it is only then that the matter can be referred to a Larger Bench by stating the points of difference with the judgment of the coordinate Bench. This rule of stare decisis is well settled and has been explained by the Supreme Court of India in Union of India v. Raghubir Singh [1989 (5) TMI 54 - SUPREME COURT] where it was held that 'What Parliament intends to say is that the benefit of section 30(2) will be available to an award by the Collector or the court made between the aforesaid two dates or to an appellate order of the High Court or of the Supreme Court which arises out of an award of the Collector or the court made between the said two dates. The word 'or' is used with reference to the stage at which the proceeding rests at the time when the benefit under section 30(2) is sought to be extended.' The Court declines to answer the reference made to this Larger Bench and places all these matters before the Roster Bench on 13th April 2022 to be dealt with on merits in accordance with law. The interim order passed earlier in the respective writ petitions shall continue till then. 1. ISSUES PRESENTED AND CONSIDERED (i) Whether a reference to a Larger Bench was maintainable when a coordinate Division Bench decision on the same legal issue existed and the referring order did not state reasons or points of disagreement with that binding decision. (ii) What consequential order should be made upon finding the reference procedurally infirm, including whether the Larger Bench should answer the referred question on Section 41(4) or remit the matters to the appropriate roster bench for decision on merits. 2. ISSUE-WISE DETAILED ANALYSIS Issue (i): Maintainability of the reference in light of a binding coordinate Bench decision Legal framework (as discussed by the Court): The Court applied the rule of stare decisis governing High Court Benches, namely that a Division Bench is bound by a judgment of a coordinate Bench of the same strength; if it proposes to differ, it must identify the points of difference and only then seek consideration by a Larger Bench. Interpretation and reasoning: The Court noted that the referring Division Bench itself had noticed an earlier coordinate Division Bench decision interpreting Section 41(4) (as it stood prior to the 2015 amendment). However, the referral order did not record any reasons for disagreeing with that earlier binding judgment, nor did it articulate any specific 'points of difference' necessitating a Larger Bench. The Court held that, in the absence of such expressed disagreement and formulation of differences, the precondition for a valid reference was not met. Conclusions: The reference was held to be procedurally defective. Since the referring order failed to state reasons for departing from the coordinate Bench decision, the Larger Bench held that the occasion to answer the referred question did not arise. Issue (ii): Appropriate disposition after declining to answer the reference Interpretation and reasoning: Having found the reference not properly framed and therefore not requiring an answer by the Larger Bench, the Court directed that the matters be placed before the roster bench to be dealt with on merits in accordance with law. The Court also directed continuation of the interim orders already operating in the respective petitions until the matters are taken up by the roster bench. Conclusions: The Court declined to answer the referred question and ordered listing of the matters before the roster bench for merits adjudication, with existing interim protection to continue till then.