Tax Authorities cannot refuse to follow binding jurisdictional decision merely because they propose to file appeal

Delhi High Court recently pronounced that that the Department cannot refuse to follow binding jurisdictional decision merely on the basis that the Department proposes to file an appeal.

The Hon’able Court Quoted the decision of  Hon’able Supreme Court in UOI v. Kamlakshi Finance Corpn Ltd. AIR 1992 SC 711: (1992) 1 SCC 648  wherein the apex court has held that order of higher appellate authorities should be followed ‘unreservedly’ and mere fact that decision is not acceptable to the Revenue cannot be a ground for not following the decision of higher authority.

Keeping in view the aforesaid, the impugned order of department was set-aside and the department was directed to issue a certificate under Section 197 of the Act indicating therein that the rate of tax, on dividend, as applicable qua the Petitioner is 5% in India-Switzerland DTAA as held in Nestle SA (Supra) which was also under India-Switzerland DTAA.

To Read the Judgment Download PDF Given Below.