The Kerala High Court ruled that tax assessments ignoring higher court precedents violate the doctrine of precedent. Article 141 mandates that Supreme Court rulings bind all courts. Ignoring precedents disrupts legal consistency, making such decisions unsustainable and reversible. The ruling reinforces adherence to established legal principles in tax assessments.
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The Kerala High Court said that any tax assessment orders issued in ignorance of binding precedents established by higher courts violate the doctrine of precedent.
The Doctrine of Precedent ensures that lower courts follow higher court decisions in cases involving materially similar facts.
It promotes consistency, predictability, and stability in the legal system.
Article 141 of the Constitution reinforces this principle by declaring that the law laid down by the Supreme Court binds all courts across the country. For example, if the Supreme Court decides a legal principle in one case, all lower courts must apply the same principle in future cases involving similar circumstances.
The ratio decidendi refers to the legal reasoning or principle upon which a court bases its decision. It is the binding part of a judgment, and courts must follow it in future cases with similar facts.
Oiter dicta are non-essential remarks or observations made by the judge in a case. They do not form the core of the decision, and are not legally binding, however, they can influence future cases or provide guidance for interpreting the law.
Tax assessment orders passed without considering binding precedents violate the doctrine of precedent and are unsustainable.
The court underlined that ignoring higher court judgments compromise the principle of consistency in the legal system.
Tax authorities cannot ignore established legal principles when issuing assessment orders.
If a lower court disregards a binding precedent, its ruling becomes untenable and liable to be reversed by a higher court
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PRACTICE QUESTION Q. Consider the following statements about the Doctrine of Precedent:
Which of the statements given above is/are correct? A) 1 and 2 only B) 2 and 3 only C) 1 and 3 only D) 1, 2, and 3 Answer: A Explanation: Statement 1 is correct: Only the ratio decidendi (the reason for the decision) of a case constitutes a binding precedent. This is the legal principle upon which the court's decision is based. Statement 2 is correct: Obiter dicta (remarks made by the court that are not essential to the decision) can have persuasive value and may be considered by other courts, but they are not legally binding precedent. Statement 3 is incorrect: a decision of a larger bench of the Supreme Court overrules a decision of a smaller bench on the same point of law, however, the legal principles involved must be the same or directly related for the overruling to be effective. A larger bench does not automatically overrule a smaller bench if the legal issues are distinct. |
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