By Vinayak Y Thakur
WHAT is Res Judicata
A matter adjudged, a thing judicially acted upon or decided, a thing or matter settled by judgment, a thing definitely settled by judicial decision, the thing adjudged – Law Lexicon
As per Black's law Dictionary – 7th Edition, there are three elements in the above principle.
They are -
(1) an earlier decision on the issue,
(2) a final judgment on the merits, and
(3) the involvement of the same parties, or parties in privity with the original parties.
The above principle operates as a bar to try the same issue once over. The Apex Court in the case of Sulochana Amma vs. Narayanan Nair - (2002-TIOL-292-SC-MISC) held that this principle aims to prevent multiplicity of proceedings and accords finality to an issue, which directly and substantially had arisen in the former suit between the same parties or their privies, decided and became final, so that parties are not vexed twice over; vexatious litigation would be put to an end and the valuable time of the Court is saved. It is based on public policy as well as private justice. The principle would apply, therefore, to all judicial proceedings of the tribunals other than the civil courts.
Basis and Scope of
The principles of Res Judicata are of universal application as it is based on two age old principles, namely , interest reipublicae ut sit fins litium which means that it is in the interest ofthe State that there should be an end to litigation and the other principle is nemo debet his veari, si constet curiae quod sit pro un aet eademn cause meaning thereby that no one oughtto be vexed twice in a litigation if it appears to the Court that it is for one and the same cause. This doctrine is common to all civilized system of jurisprudence to the extent that a judgment after a proper trial by a Court of competent jurisdiction should be regarded as final and conclusive determination of the questions litigated and should forever set the controversy at rest.
That principle of finality of litigation is based on high principle of public policy . In the absence of such a principle great oppression might result under the colour and pretence of law in as much as there will be no end of litigation and a rich and malicious litigant will succeed in infinitely vexing his opponent by repetitive suits and actions. This may compel the weaker party to relinquish his right. The doctrine of Res Judicata has been evolved to prevent such an anarchy.
Recently, Hon. Supreme Court in the case of M. Nagabhushana vs. State of Karnataka 2011 (271) ELT 481 dealt with this doctrine. It held that the application of this doctrine should not be hampered by any technical rules of interpretation. Plea of res judicata is not mere technicality, but a fundamental principle sustaining rule of law, ensuring finality in litigation.
Constructive res judicata
`Constructive' means `implied', "that which has not the character assigned to it in its own essential nature, but acquires such character in consequence of the way in which it is regarded by a rule or policy of law (Black)
Whether doctrine is applicable in taxation matters
The principle of res judicata or estoppel is not applicable to tax matters , thus the view taken by the assesse or appellate, revisional authority or even the High Court in respect of any one assessment period will not be final and conclusive for subsequent assessment period but such earlier decisions should be a cogent factor in the determination of the same point in subsequent assessment period.
In the case of Bramec Surie (P) Ltd . 1986 (25) ELT 79, the Tribunal had held that issues already concluded in earlier proceedings could be reopened in subsequent proceedings for another period of time if emerging fresh materials give a new dimension to the matter.
While dealing with the issue whether Appellate Tribunal is bound by its earlier decision, the Hon. Supreme Court in the case of Swaraj Mazda Ltd 1995 (77) ELT 505 held that the Tribunal is not precluded from deciding the question on merits because of earlier decision of the Tribunal regarding an earlier period.
The non-application of the doctrine of res judicata in tax matters is based on the fact that assessment for each year is distinct and separate since the Finance Act which alone supports the assessment is sanctioned only for a particular year by the legislature. When happening of some subsequent event was not existent at the time of passing the first order, one cannot plead res judicata.
Case laws relied on for the above discussion
++ J.K. Synthetics Ltd. 1981 (8) ELT 328 Tribunal
++ Birla Jute Mfg. Co. Ltd. 1985 (21) ELT 930 Tribunal
++ Jain Exports - (2003-TIOL-164-HC-DEL-EXIM-LB)
++ Peico Electronics & Electricals Ltd. 1994(71) ELT 1053 (Tribunal) upheld in 2000 (116) ELT A72 SC.
++ Swaraj Mazda Ltd. 1995 (77) ELT 505 SC
++ Sulochana Amma vs. Narayanan Nair - (2002-TIOL-292-SC-MISC)
++ UOI vs. R.C.Fabrics (P) Ltd. - (2002-TIOL-533-SC-CUS-LB)
++ M. Nagabhushana 2011 (271) ELT 481 SC.
WHAT is Res Judicata
A matter adjudged, a thing judicially acted upon or decided, a thing or matter settled by judgment, a thing definitely settled by judicial decision, the thing adjudged – Law Lexicon
As per Black's law Dictionary – 7th Edition, there are three elements in the above principle.
They are -
(1) an earlier decision on the issue,
(2) a final judgment on the merits, and
(3) the involvement of the same parties, or parties in privity with the original parties.
The above principle operates as a bar to try the same issue once over. The Apex Court in the case of Sulochana Amma vs. Narayanan Nair - (2002-TIOL-292-SC-MISC) held that this principle aims to prevent multiplicity of proceedings and accords finality to an issue, which directly and substantially had arisen in the former suit between the same parties or their privies, decided and became final, so that parties are not vexed twice over; vexatious litigation would be put to an end and the valuable time of the Court is saved. It is based on public policy as well as private justice. The principle would apply, therefore, to all judicial proceedings of the tribunals other than the civil courts.
Basis and Scope of
The principles of Res Judicata are of universal application as it is based on two age old principles, namely , interest reipublicae ut sit fins litium which means that it is in the interest ofthe State that there should be an end to litigation and the other principle is nemo debet his veari, si constet curiae quod sit pro un aet eademn cause meaning thereby that no one oughtto be vexed twice in a litigation if it appears to the Court that it is for one and the same cause. This doctrine is common to all civilized system of jurisprudence to the extent that a judgment after a proper trial by a Court of competent jurisdiction should be regarded as final and conclusive determination of the questions litigated and should forever set the controversy at rest.
That principle of finality of litigation is based on high principle of public policy . In the absence of such a principle great oppression might result under the colour and pretence of law in as much as there will be no end of litigation and a rich and malicious litigant will succeed in infinitely vexing his opponent by repetitive suits and actions. This may compel the weaker party to relinquish his right. The doctrine of Res Judicata has been evolved to prevent such an anarchy.
Recently, Hon. Supreme Court in the case of M. Nagabhushana vs. State of Karnataka 2011 (271) ELT 481 dealt with this doctrine. It held that the application of this doctrine should not be hampered by any technical rules of interpretation. Plea of res judicata is not mere technicality, but a fundamental principle sustaining rule of law, ensuring finality in litigation.
Constructive res judicata
`Constructive' means `implied', "that which has not the character assigned to it in its own essential nature, but acquires such character in consequence of the way in which it is regarded by a rule or policy of law (Black)
Whether doctrine is applicable in taxation matters
The principle of res judicata or estoppel is not applicable to tax matters , thus the view taken by the assesse or appellate, revisional authority or even the High Court in respect of any one assessment period will not be final and conclusive for subsequent assessment period but such earlier decisions should be a cogent factor in the determination of the same point in subsequent assessment period.
In the case of Bramec Surie (P) Ltd . 1986 (25) ELT 79, the Tribunal had held that issues already concluded in earlier proceedings could be reopened in subsequent proceedings for another period of time if emerging fresh materials give a new dimension to the matter.
While dealing with the issue whether Appellate Tribunal is bound by its earlier decision, the Hon. Supreme Court in the case of Swaraj Mazda Ltd 1995 (77) ELT 505 held that the Tribunal is not precluded from deciding the question on merits because of earlier decision of the Tribunal regarding an earlier period.
The non-application of the doctrine of res judicata in tax matters is based on the fact that assessment for each year is distinct and separate since the Finance Act which alone supports the assessment is sanctioned only for a particular year by the legislature. When happening of some subsequent event was not existent at the time of passing the first order, one cannot plead res judicata.
Case laws relied on for the above discussion
++ J.K. Synthetics Ltd. 1981 (8) ELT 328 Tribunal
++ Birla Jute Mfg. Co. Ltd. 1985 (21) ELT 930 Tribunal
++ Jain Exports - (2003-TIOL-164-HC-DEL-EXIM-LB)
++ Peico Electronics & Electricals Ltd. 1994(71) ELT 1053 (Tribunal) upheld in 2000 (116) ELT A72 SC.
++ Swaraj Mazda Ltd. 1995 (77) ELT 505 SC
++ Sulochana Amma vs. Narayanan Nair - (2002-TIOL-292-SC-MISC)
++ UOI vs. R.C.Fabrics (P) Ltd. - (2002-TIOL-533-SC-CUS-LB)
++ M. Nagabhushana 2011 (271) ELT 481 SC.
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