THE KESHAV MILLS CO. LTD. versus COMMISSIONER OF INCOME-TAX, BOMBAY NORTH

Citation: [1965] 2 S.C.R. 908 · Decided: 08-02-1965 · Supreme Court of India · Bench: P.B. GAJENDRAGADKAR · Disposal: Appeal(s) allowed

Cited by 21 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

908 
THE KESHA V MILLS CO. LTD. 
v. 
COMMISSIONER OF INCOME-TAX, BOMBAY NORTH 
February 8, 1965 
[P. B. GAJENDRAGADKAR, C.J;, K. SuBBA RAo, 
K. N. WANCHOO, M. HIDAYATULLAH, J.C. SHAH, 
S. M. S!KRI AND R. S. BACHAWAT, JJ.] 
Indian Income-tax Act (11 of 1922), s. 66(4)-Power of High Court 
to mk Tribunal to submit supplementary statement of case after further 
investigation of facts-Stare decisis-Power of Supreme Court to review 
and revise earlier judgments-'W_hen should be exercised. 
The appellant was a company registered in the erstwhile Baroda 
State. 
In connection with the assessment year 194243 the Income-tax 
Officer Ahemdabad held that certain sale proceeds were received by the 
appellant in British India and the profit thereon was taxable under the 
Indian Income-tax Act, 1922. One of the items in dispute related to the 
sale-proceeds collected by collecting cheques on British India Sbroffs 
and Merchants. In respect of the said item the Appellate Assistant Com-
missioner as well as the Appellate Tribunal decided against the appellant, 
and thereafter, reference was made to the High Court. The High Court felt 
that it required further facts to decide the reference and twice remanded 
the case to the Tribunal for investigation of those facts. 
The Tribunal 
after takinjl evidence submitted a supplementary Statement of Case on 
each occasion. 
Finally the High Court decided the question against the 
appellant, but granted it a certificate of fitness to appeal to the Supreme 
Court. 
It was contended on behalf of the appellant that the High Court had 
no jurisdiction to direct the Tribunal to collect additional material and 
make it a part of the supplementary Statement of Case under s. 66( 4 fas 
had been decided by this Court in··. the cases of the Petlad Co. and the 
New Jahangir Mills. On behalf of;:the Revenue it w.S contended that 
these two cases required reconsideration. The Court therefore had to 
consider whether it should review and revise its earlier view taken in the 
said two cases. 
· HELD : (i) The JYiew contended. for on behalf of the Revenue 
namely, that the High Court had power to ask the Tribunal to investigate 
further facts and submit a supplementary Statement of Case was a 
reasonably possible 
vi~w. But on the other hand the opposite view 
taken by this Court in the Petlad Co. case and the New 
Jahangir 
Mi/18 case was also reasonably possible. The latter view had been follow-
ed by this Court on several occasions and it had regulated the pro-
cedure in reference proceedings in the High Courts ever since the decision 
in the New Jahangir Mills case was pronounced. 
Besides, no reported 
decision had been cited at the bar where the question about the construc-
tion of s. 66( 4) was considered and decided in favour of the view con-
tended for by the Revenue; No case therefore was made out for a re-
vision or review of the Court's•decisions in the Pet/ad Co. and New 
Jahangir Mills cases. [928 C-F1 
Case law discussed. 
The New Jahangir Vakil Mills Ltd. v. Commissimter of Income-tax, 
Iiombizy North, .. {1960] 1 S.C.R. 249 and The Pet/ad Turkey Red Dye 
B 
c 
D 
E 
F 
G 
H 
A 
B 
c 
D 
E 
F 
G 
H 
KESHAV MILLS v. C.I.T. (Gajendragadkar, CJ.) 
909 
Works Co. Ltd. Pet/ad v. Commissioner of Income-tax, Bombay, A.he,,,,U,.. 
bad, [1963] Supp. 1 S.C.R. 871, affirmed. 
(ii) The principle of stare decisis cannot be pressed into service In 
cases where the power of this Court to reconsider and revise its earlier 
decisions is invoked, because that power is inherent in this Court; but 
wvertheless the normal principle that judgments 
pronounced 
by 
!hi~ 
Court would be final cannot be ignored. 
Unless considerations of a subo-
tantial and compelling character make it necessary to do so this Court 
should and would be reluctant to review and revise its earlier decisions. 
[923 B-Dl 
Bengal Immunity Company Ltd. v. State of Bihar [1955] 2 S.C.R. 
603, distinguished. 
(iii) If the Court is satisfied that its earlier decision was clearly 
erroneous, it should not hesitate to correct the error; but before a previous 
decision is pronounced to be plainly erroneous, the Court must be satis-
fied with a fair amount of unanimity amongst its members that a revision 
of the said view is fully justified. It is not possible or desirable, and 
in any case it would be inexpedient to lay down any principles which 
should govern the approach of the Court in dealing with the question of 
reviewing and revising its 

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