CIT (IT) v. Gracemac Corporation (2023) 456 ITR 135 / 294 Taxman 708(SC)

Interpretation of Taxing statute-Binding precedent-Decision rendered following earlier decision – Subsequent overruling of earlier decision does not revive judgment passed earlier.

 

Court  held that once a judgment is passed by a court following another judgment and subsequently the latter judgment is overruled on a question of law, it cannot have an effect of reopening or reviving the former judgment passed following the overruled judgment nor can the same be reviewed. The Explanation to rule 1 of Order XLVII of the Code of Civil Procedure, 1908 is in the nature of an exception. In other words, the Explanation being in the nature of a proviso qualifies or is an exception to what is stated in rule 1 of Order XLVII of the Code, which states the grounds for seeking a review. Hence, the object and intendment of the Explanation must be given its full effect. The object and purpose of the Explanation can be related to the three maxims : nemo debet bis vexari pro una et eadem causa (no man should be vexed twice for the same cause), interest reipublicae ut sit finis litium (it is in the interest of the State that there should be an end to a litigation), and res judicata pro veritate occipitur (a judicial decision must be accepted as correct). There must be an end to litigation, otherwise, the rights of persons would be in an endless confusion and fluidity and justice would suffer. This is against public policy and not in the interest of the State.