(a) Precedent---

----Judgment "per incurium"---No requirement of law existed to the effect that a view once taken wrongly was required to be so taken forever---Indeed it was absurd to hold that a view stated by a Bench to be incorrect, be repeated by that Bench in another judgment simply because it had once acquiesced in the incorrect view---No Judge was expected to be a slave to his own judgment---Judge could become wiser at any time as a result of some `discovery' that he made on his own or as the result of something pointed out to him by another Judge or by counsel---Where a cited judgment was shown to be rendered "per incurium", same was of no consequence in the eye of law---When a cited judgment had been held to be rendered `per incurium' then there could be no question of following that judgment and "stare decisis" rule would not apply and said judgment could not be referred to a larger Bench on mere asking of a party. [pp. 175, 176, 177] A, B & C

(2004) 89 Tax 234 (Trib.); B.P. Biscuit Factory's case 1996 SCMR 1470; 1997 PTD (Trib.) 879; 1998 PTD (Trib.) 2552; 2003 PTD (Trib.) 835; (2004) PTD 2180; (1998) SCMR 1618; PLD 1963 (W.P.) Kar. 79; 1994 SCMR 1900; PLD 1987 SC 145; PLD 1987 SC 172; 2005 PTD 280 Trib; Govt. of Andhra Pradesh and another v. B. Stayanarayana Rao by (LR's) (2004 (4) SCC 262; State of U.P. and another v. Suynthetics and Chemicals Ltd. and another 1991 (4) SCC 139; Young v. Bristol Aeroplane Co. Ltd. (1944) 1 KB 718 and (1944) 2 All. ER 293 ref.

Wealth Tax Act (XV of 1963)---

----S. 35---Rectification of order---No cause was available for any intervention by Appellate Tribunal under S.35 of Wealth Tax Act, 1963 as no patent mistake, either of fact or law, was floating on the surface of Tribunal's impugned order that could be rectified.

Shahbaz Butt for Applicant.

Mahmood Aslam, D.R. for Respondent.

Date of hearing: 21st May, 2005.

ORDER

MUHAMMAD MUNIR QURESHI (ACCOUNTANT MEMBER).---These are miscellaneous applications by a private limited company arising out of Tribunal's order bearing W.T.As. Nos.654/655/LB of 2005 (Assessment Years 1997-98 and 1998-99), dated 22-12-2004.

2. As per grounds filed it is the applicants contention that the Tribunal in it's aforecited judgment has erred in not following judgment referred to by the assessee respondent i.e. (2004) 89 Tax 234 (Trib.) when responding to the Departmental arguments at the time that the Departmental Appeals against the order of the CIT(A) were taken up for hearing by the Tribunal. According to Appellant the Tribunal was "bound" to follow the cited judgment and could not deviate from the findings recorded in that judgment without referring the 'same to the Chairman ITAT for constituting a larger Bench. It is also the applicants' contention that the Tribunal had also erred in allegedly not recording submissions statedly made by AR of assessee respondent to the effect that the assessee company had been `forced' to let out the mill due to recurring losses allegedly suffered by the company when it operated the mill on it's own and this alleged omission by the Tribunal had caused grave prejudice to assessee's rationale for leasing out the mill. It is the applicant's contention that had the AR's alleged submissions on this aspect been recorded by the Tribunal then the Supreme Court of Pakistan judgment in the BP Biscuit Factory case's 1996 SCMR 1470 would apply in assessee's case as well and no wealth tax would be leviable on the lease rentals realized by the assessee company in 1997-98 and 1998-99.

3. In his oral arguments, the AR of applicant argued that a Division Bench of the Tribunal was not competent to declare a judgment of another Bench of equal strength to be a judgment rendered "per incurium". It is the AR's contention that this was the sole prerogative of a larger Bench and the AR has referred to the legal principle of `stare decisis' in this context. The AR has especially emphasized that the author of the judgment having himself acknowledged that he had earlier followed the judgment referred to by assessee/respondent in another Appeal decided by the Tribunal and in which too he was the author, could not now take a different view with regard to that judgment in the present (Departmental) Appeals against the order of the CWT(A).

4. The following case-laws have been referred to by the AR of applicant.

1997 PTD,(Trib.) 879; 1998 PTD (Trib.) 2552; (2003) PTD (Trib.) 835; (2004) PTD 2180; 1998 SCMR 1618; PLD 1963 (W.P.) Karachi 79; 1994 SCMR 1900; PLD 1987 Supreme Court 145; PLD 1987 Supreme Court 172; 2003 PTD 835 (Trib.); 2004 PTD 2180 LHC and 2005 PTD 280 (Trib.)

5. The DR submits that the applicant is wholly misconceived in it's view that the impugned order of the Tribunal contains mistakes that could be `rectified' under the law. It is argued that the Tribunal has passed a `speaking order' that has considered all arguments/case-laws referred to by the assessee/respondent when the assessee responded to the departmental arguments. It is emphasized strongly that no `mistakes' could be seen as floating on the surface of Tribunal's impugned order and under the law it was not permissible to resort to elaborate discussion and involved arguments to artificially make out a case for `rectification'.

6. We have heard both sides, perused the cited case-law and the available record and our findings are recorded as under:

(a) The AR of applicant has stated that the Tribunal in it's aforecited Order has allegedly not recorded the AR's arguments when responding to the Departmental arguments the AR had allegedly pointed out that the assessee company was statedly forced to lease out the mill due alleged recurring losses suffered by the company.

This contention of the AR has been looked into very carefully and we find that on page (5) paragraph (3) of Tribunal's impugned order, the argument as made by the AR has been duly incorporated and considered and has then been rejected for the reason that the argument that the assessee company was (allegedly) compelled to lease out it's business premises due to extraordinary business exigency, was couched in general and not precise terms and was being made before the Tribunal for the first time and had not been made earlier before the Assessing Officer or the first appellate authority. Then on page (6) paragraph (4) of it's impugned order, the Tribunal has gone on to explain that the BP Factory case judgment of the apex Court did not apply in assessee's case as unlike the present assessee, in the BP. Factory case it had apparently been satisfactorily established before the apex Court that there was indeed office space in excess of it's own requirements on it's business premises and letting out of such office space had no nexus with the normal commercial operation of the factory. There is thus a? world of difference in assessee's contention and the contention of BP Factory and assessee's contention in it's miscellaneous application that it's AR's arguments on the matter had not been recorded by the Tribunal in it's impugned order is just not correct. Rather the relevant record shows that whatever argument was made by the AR has infact been duly recorded by the Tribunal. If the argument was not sufficiently proved/ corroborated but found to be couched only in general terms then the Tribunal cannot reasonably be expected to accept such an unproved/uncorroborated argument especially one that was being made before it for the first time in this manner and had not been previously been made before the Assessing Officer and/or the CWT(A). This contention of the applicant is thus found not correct.

(b) In it's grounds the applicant has made no reference at all to the fact that the Tribunal in it's impugned order has held that the judgment relied on by the assessee/respondent had been found to be a judgment rendered `per incurium' for the reason that it was not consistent with the statute/applicable rules under the statute and consequently did not constitute a valid precedent and had no binding force. This the Tribunal had explained at length in paragraphs 6(1), 6(2) and 6(6) of it's impugned order.

In our considered judgment, the heart of the matter here is Tribunal's unequivocal finding that the judgment relied upon by the respondent was a judgment rendered `per incurium' as it was in clear conflict with the statute/applicable rules under the statue insofar as that judgment had wrongly held that after withdrawal of Rule 8(4B) of the Wealth Tax Rules, 1981 there was no Rule applicable in the case of leased out mills/factories for purposes of appraisement of it's assets for wealth tax levy when in fact Rule 8(3) was very much on the statute and was being routinely invoked by the Department in all cases of leased out factories/mills subjected to wealth tax levy. Because the legal position had been misconstrued the DB had held that there being no provision in the statute to enable assets of leased out mills to wealth tax levy therefore it appeared that the Government had intact exempted such leased out factories from wealth tax levy. Furthermore, the said judgment also appears to categorize "plant and machinery" in the case of a factory such as the assessee's, as "movable asset" which is prima facie, an incorrect findings, patently in conflict with the definition of "asset" liable to wealth tax levy as given in the Wealth Tax Act, 1963 (since repealed). There can thus be no doubt at all that on both counts enumerated supra the said judgment is a judgment rendered "per incurium" and hence of no consequence in the eye of law.

(c) In our view, the applicant's AR's repeated reference to the rule of `stare decisis' in the present case is misconceived as when a cited judgment has been held to be rendered `per incurium' then there can be no question of following that judgment and the `stare decisis' rule clearly does not apply. However without first holding the judgment to be rendered `per incurium' a Division Bench of the Tribunal cannot discard the judgment of another Division Bench of the Tribunal in the case of the assessee company, this requirement is duly satisfied as this DB has not followed the judgment of the another DB cited before it after holding that cited judgment to be rendered `per incurium' for reasons duly recorded `in extenso' in the impugned order. As for applicant's AR's contention made before us that before refusing to follow the judgment of another DB reference to the Chairman ITAT for constitution of a large Bench was mandatory, the view of the learned AR is clearly misconceived as there is no requirement in law that this be done "where a cited judgment is shown to be rendered "per incurium". A case cannot be referred to a larger Bench on the mere asking of a party 2004 (4) SCC 262 Government of Andhra Pradesh and another v. B. Stayanarayana Rao by (LR's).

In State of U.P. and another v. Synthetics and Chemicals Ltd. and another 1991(4) SCC 139, it has been observed:

`incuria' literally means `carelessness' in practice per incuriam appears to mean per ignoratium. English Courts have developed this principle in relaxation of the rule of stare decisis. The `quotable in law' is avoided and ignored if it is rendered, in ignoratium of a statute or other binding authority (Young v. Bristol Aeroplane Co. Ltd.) (1944) 1 KB 718; (1944) 2 All ER 293. Same has been accepted approved and adopted by the Supreme Court of India while interpreting Article 141 of the Indian Constitution which embodies the doctrine of precedents as a matter of law.

In (1991) 4 SCC 139 (SC Ind) it was held that doctrine of der incurium oaerates as an exceetion to the rule of precedents and where a judgment is passed in Ignoratium i.e. in ignorance of a provision of law or binding authority then it is not binding and quotable in law.

(d) It is patent from the relevant record that the per incurium judgment had been rendered because the correct statutory position regarding levy of wealth tax on the assets of leased out Mills was not appreciated and it was wrongly held that with the withdrawal of Rule 8(4B) of the Wealth Tax Rules, 1981 there was no way to subject such assets to wealth tax levy when in fact Rule 8(4B) had been withdrawn precisely because it was seen as having been rendered redundant in the presence, of Rule 8(3) of the wealth tax rules that catered fully to wealth tax levy on leased out assets of a factory. Neither the DR nor the counsel for the respondent brought this crucial aspect to the knowledge of the Bench and this resulted in an incorrect appreciation of the correct legal position.

(e) Applicant's AR's contention that the author of the impugned order of the Tribunal having himself acknowledged that he had followed the judgment cited by assessee respondent while deciding another appeal and he was therefore `bound to follow' the same in the case of the appeal filed by the Department also has been examined with the utmost care and we find that there was no requirement of law that a view once taken wrongly is required to be so taken forever. Indeed it is absurd to hold that a view stated by a Bench to be incorrect be repeated by that Bench in another judgment simply because it had once acquiesced to c the incorrect view. No Judge is expected to be a slave to his own judgments. A Judge can become wiser at any time as a result of some `discovery' that he makes on his own or as the result of something pointed out to him by another Judge or by counsel.

(f) The case-law referred to by applicant has been perused carefully and we find that it is of no avail to the applicant in the matter presently before us. None of the cited judgments are "on all fours" with the situation obtaining presently before us. The present DB has the same strength as the DB whose judgment it has refused to follow because it was a judgment rendered "per incurium" it is not at all the case here that a lower Court has held the judgment of a superior Court to have been rendered `per incurium'. Rather two DB's of `coordinate jurisdiction' are involved and one is perfectly competent to declare the judgment of the other to have been rendered `per incurium'.

(g) It is reiterated that when the assessee's AR responded to the departmental submissions at the time that the departmental appeals against the order of the CWT(A) were heard, the AR of applicant did not make elaborate argument to establish conclusively that it was indeed never the intention of the assessee to lease out the Mill and that it was compelled by extraordinary circumstances to lease out the Mill. Even at this stage no detailed and exhaustive submissions have been made and no detailed documentation has been submitted to establish the nature of the compelling circumstances that allegedly forced the assessee to lease out the Mill. Assessee's statement before the Tribunal made for the first that it was never it's intention to lease out the Mill is obviously an inspired statement calculated to secure exemption from wealth tax levy arbitrarily.

For the reasons recorded supra, we find that there is no cause for any intervention by the Tribunal under section 35 of the Wealth Tax Act, 1963 (since repealed) and there is no patent mistake, either of fact or of law, floating on the surface of Tribunal's impugned order, that could be rectified.

The application is refused.

H.B.T./454/Tax (Trib.)???????????????????????????????????? Applications refused.