Judicial precedent: Reason is must for not following judgment of another high court

The decision of a high court is at best a persuasive precedent, which another high court is free not to follow. That applies to this Court too. The decisions of other high courts, even though rendered by an Hon'ble Division Bench, is not binding on a Single Bench of this Court. This is the easy route for not following a decision of another high court. However, it is not proper to side track a decision of another high court on the same point by saying that it is not binding. After all, it is a decision of a high court and every decision of high courts deserve due and meticulous consideration. Should a Bench feel not to be persuaded by a persuasive precedent, some reason ought to be assigned. That is exactly the law laid down by the Supreme Court in the decision reported in (2008) 14 SCC 283 : Pradip J. Mehta v. Commissioner of Income Tax, Ahmedabad. In paragraph 23 of the decision, the Supreme Court stressed the need for the high courts to either record its agreement or dissent with the decision of any other high court that is placed before it. It was also stressed that the high court, which differs with the view taken by the other high court, in all fairness, must record its dissent with the reasons therefor. Being bound thereby, this Bench treads the path of assigning reasons for not being ad idem with the decisions in D.J. Exim (supra), Shri Mohan Products (supra) and K.V. Wall Mount Pvt. Ltd. (supra).

Calcutta High Court in Metsil Exports Private Ltd. & Anr vs Punjab National Bank & Anr on 10 November, 2016 source https://indiankanoon.org/doc/70217069/


Although the judgments referred to above, were cited at the bar in the High Court, which were taken note of by the learned Judges of the Bench of the High Court, but without either recording its agreement or dissent answered the two questions referred to it in favour of the Revenue. Judicial decorum, propriety and discipline required that the High Court should, especially in the event of its contra view or dissent, have discussed the aforesaid judgments of the different High Courts and recorded its own reasons for its contra view. We quite see the fact that the judgments given by a High Court are not binding on the other High Court(s), but all the same, they have persuasive value. Another High Court would be within its right to differ with the view taken by the other High Courts but, in all fairness, the High Court should record its dissent with reasons therefor. The judgment of the other High Court, though not binding, have persuasive value which should be taken note of and dissented from by recording its own reasons.

It is well settled that when two interpretations are possible, then invariably, the Court would adopt the interpretation which is in favour of the tax payer and against the Revenue. Reference may be made to the decision in Sneh Enterprises v. Commissioner of Customs, New Delhi[(2006) 7 SCC 714], of this Court wherein, inter alia, it was observed as under:

"While dealing with a taxing provision, the principle of "Strict Interpretation" should be applied. The Court shall not interpret the statutory provision in such a manner which would create an additional fiscal burden on a person. It would never be done by invoking the provisions of another Act, which are not attracted. It is also trite that while two interpretations are possible, the Court ordinarily would interpret the provisions in favour of a tax-payer and against the Revenue."

Supreme Court of India in Pradip J. Mehta vs Commissioner Of Income ... on 11 April, 2008 source https://indiankanoon.org/doc/1863541/