TaxTMI 
TaxTMI 
2007 (9) TMI 399
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....tional District and Sessions Judge, Thane, holding that respondent No. 1 herein was not liable to pay octroi at the rate of 1 per cent, but only at the rate of 0.5 per cent. The short facts giving rise to the present appeals are that respondent No. 1 is a company registered under the Indian Companies Act, 1913, having its registered office and factory at Bombay-Agra Road, Wagle Estate, Thane. The company is engaged in the process of manufacturing safety razor blades of various qualities and types. For the said purpose, the company was importing stainless steel strips and bringing them to its factory within the octroi limits of the Corporation. According to the Corporation, since 1968, the company had been importing stainless steel strips to its factory and it was paying octroi at the rate of 1 per cent under item No. 77 of the Schedule to the Maharashtra Municipalities (Octroi) Rules, 1974 (hereinafter referred to as "the Rules"). The company was also maintaining a current account with the Corporation under section 142 of the Maharashtra Municipalities Act, 1965 (hereinafter referred to as "the Act"). It is the case of the Corporation that in the year 1974, a sudden turn was tak....
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....its that the contention raised by the company was well founded. It also held that at an earlier occasion, a similar question had arisen and a competent court of the Chief Judicial Magistrate, Thane, held that the company could be charged only under item No. 71 and not under item No. 77 of the Schedule. The said order was confirmed by the revisional court and also by the High Court of Bombay vide its order dated July 16, 1990, in Writ Petition No. 2987 of 1990. It was, therefore, held that the point was finally concluded and the company had paid proper octroi and it was not liable to pay octroi under item No. 77. The revision petitions were, therefore, allowed and the order passed by the learned judge was set aside. The High Court also dismissed writ petitions. The said order is challenged by the Thane Municipal Corporation in this court. On January 9, 2002, notice was issued by this court. On July 8, 2002, leave was granted and the matters have been placed before us for final hearing. We have heard learned counsel for the parties. Learned counsel for the appellant-Corporation contended that the revisional court as well as the High Court had committed an error of law in holding t....
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....ent proceedings, the revisional court decided the issue in favour of the company. Having considered the rival contentions of the parties, we are of the opinion that the view taken by the revisional court as also by the High Court cannot be faulted. Learned counsel for the parties drew our attention to both the items, i.e., item No. 71 and item No. 77 of the Schedule to the Octroi Rules. Those items read thus: "Item No. 71: Iron and steel.-(i) to (xxx) . . . (xxxi) Hoops and strips; (xxxii) . . . Item No. 77.-Non-ferrous metals, that is to say brass, copper, tin, aluminum, lead, zinc, German silver, stainless steel, their alloys, wires, wares, sheets ingots and circles." On an earlier occasion also, the Corporation sought to levy octroi by considering the goods in question under item No. 77. It is no doubt true that between 1968 and 1974, the company itself treated the goods imported by it under item No. 77 and paid octroi at the rate of 1 per cent. On going through the Octroi Rules, however, it realised that the correct item was 71 and not 77 and started paying octroi at the rate of 0.5 per cent from April, 1974. The Corporation also accepted the amount paid by the company. ....
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....petition was dismissed by the High Court in limine without recording reasons and hence, the said decision would not operate as res judicata nor would it debar the Corporation from raising a point of law which arises in the present proceedings. It was also submitted that in the matters relating to recovery of taxes, revenue, octroi, etc., each year is an independent unit and a decision in one year does not deprive the Revenue from claiming the requisite amount of octroi from the assessee in other years, if such demand is otherwise legal and lawful. So far as the proposition of law is concerned, it is well-settled and needs no further discussion. In taxation matters, the strict rule of res judicata as envisaged by section 11 of the Code of Civil Procedure, 1908, has no application. As a general rule, each year's assessment is final only for that year and does not govern later years, because it determines the tax for a particular period. It is, therefore, open to the Revenue/taxing authority to consider the position of the assessee every year for the purpose of determining and computing the liability to pay tax or octroi on that basis in subsequent years. A decision taken by the auth....
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....es judicata in respect of the matter decided in any subsequent year, for the Assessing Officer is not a court and he is not precluded from arriving at a conclusion inconsistent with his conclusion in another year. It is open to the Income- tax Officer, therefore, to depart from his decision in subsequent years, since the assessment is final and conclusive between the parties only in relation to the assessment for the particular year for which it is made. A decision reached in one year would be a cogent factor in the determination of a similar question in a following year, but ordinarily there is no bar against the investigation by the Income-tax Officer of the same facts on which a decision in respect of an earlier year was arrived at." (emphasis supplied) In M.M. Ipoh v. Commissioner of Income-tax [1968] 1 SCR 65 See [1968] 67 ITR 106. 118 (SC)., this court again stated: "The doctrine of res judicata does not apply so as to make a decision on a question of fact or law in a proceeding for assessment in one year binding in another year. The assessment and the facts found are conclusive only in the year of assessment: the findings on question of fact may be good and cogent evidence ....
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..... But this rule in our judgment, does not apply in dealing with an order under section 25A(1). Income from property of a Hindu undivided family 'hitherto' asserted as undivided may be assessed separately if an order under section 25A(1) had been passed. When such an order is made, the family ceases to be assessed as a Hindu undivided family. Thereafter, that family cannot be assessed in the status of a Hindu undivided family unless the order is set aside by a competent authority. Under clause (3) of section 25A if no order has been made, notwithstanding the severance of the joint family status, the family continues to be liable to be assessed in the status of a Hindu undivided family, but once an order has been passed, the recognition of severance is granted by the Income-tax Department and clause (3) of section 25A will have no application ". (emphasis supplied) We are in agreement with the following observations of Ranganath Misra C.J.I., in Radhasoami Satsang v. Commissioner of Income-tax [1992] 1 SCC 659; [1991] 4 JT SC 313 See [1992] 193 ITR 321, 329 (SC).: "We are aware of the fact that strictly speaking res judicata does not apply to income tax proceedings. Again,....