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PETITIONER: UNION OF INDIA AND ANR.

       Vs.

RESPONDENT: PARAS LAMINATES (P) LTD.

DATE OF JUDGMENT17/08/1990

BENCH: THOMMEN, T.K. (J) BENCH: THOMMEN, T.K. (J) RAMASWAMY, K.

CITATION:  1991 AIR  696            1990 SCR  (3) 789  1990 SCC  (4) 453        JT 1990 (3)   510  1990 SCALE  (2)283  CITATOR INFO :  E          1992 SC 522  (2)

ACT: Customs Act, 1962: Sections 129-C(5)(6)_Scope of.     Customs,    Excise   and   Gold   (Control)    Appellate Tribunal--Bench  of two Members--Doubting correctness  of  a judicial decision of a Bench of three members of the  Tribu- nal--Reference to President of the Tribunal for constituting a larger Bench--Constitution of a larger Bench by the Presi- dent--Whether contrary to judicial Discipline.

HEADNOTE:     The respondent imported certain goods and claimed in its Bills  of  Entry that the imported goods fell  under  Tariff Item  No. 84.60. The Customs Authorities rejected the  claim by  holding  that the goods were classifiable  under  Tariff Item  No.  73.15(2).  The respondents  preferred  an  appeal before  the Collector of Customs which was  also  dismissed. Thereafter, the respondent filed a second appeal before  the Customs,  Excise and Gold (Control) Appellate Tribunal  con- tending  that in view of the earlier decision of a Bench  of three members of the Tribunal in Bakelite Hylam Ltd.  Bombay JUDGMENT: E.L.T.  240 an identical classification ought to  have  been adopted  by the Customs authorities for identical goods.  By its  order  dated 22.10.1986 a Bench of two members  of  the Tribunal  stated  that they doubted the correctness  of  the earlier  decision  of a Bench of the three  members  of  the Tribunal and they referred the case to the President of  the Tribunal for constituting a larger Bench. By its order dated 4.3.1987 the President of the Tribunal referred the case  to a larger Bench of five members.     The  respondent filed a writ petition in the High  Court challenging the orders of the Bench of two members and  that of the President of the Tribunal, which struck down both the orders  by  holding that the Bench of two members  ought  to have followed the earlier decision of the larger Bench of  3 judges  and a reference of the case to a still larger  Bench was contrary to judicial precedent and judicial discipline.     In  appeal to this Court, it was contended on behalf  of the  Union of India that Section 129-C of the  Customs  Act,

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1962 empowers the Presi- 790 dent of the Tribunal to constitute larger Benches to resolve conflicts  in opinion arising between members of a Bench  or between  Benches  of the Tribunal. The  Tribunal  has  ample powers to regulate its own procedure, apart from the express provisions of the statute in that behalf.     On  behalf of the respondent, it was contended that  the Tribunal  is a creature of the Statute. Its jurisdiction  is limited to the specific powers conferred by the statute.  It has no inherent jurisdiction and its powers are not  plenary and  are limited to the express provisions contained in  the statute. Allowing the appeal, this Court,     HELD:  1. There is no doubt that the Tribunal  functions as  a. Court within the limits of its jurisdiction.  It  has all the powers conferred expressly by the statute.  Further- more, being a judicial body, it has all those incidental and ancillary powers which are necessary to make fully effective the  express grant of statutory powers. Certain  powers  are recognised as incidental and ancillary, not because they are inherent  in the Tribunal, nor because its  jurisdiction  is plenary,  but because it is the legislative intent that  the power  which is expressly granted in the assigned  field  of jurisdiction  is efficaciously and  meaningfully  exercised. [794F-G]     1.1  Where an Act confers a jurisdiction,  it  impliedly also  grants the power of doing all such acts, or  employing such  means, as are essentially necessary to its  execution. [795A]     Maxwell on Interpretation of Statutes, Eleventh  edition and  Income Tax Officer, Cannanote v. M.K.  Mohammad  Kunhi, [1969] 71 ITR 8 15, referred to.     2. It is true that sub-section (5) refers to  difference of opinion arising amongst members of a Bench in a  particu- lar case, and not specifically where the members of a  Bench doubt  the  correctness  of an  earlier  decision.  However, section 129-C confers power of reference upon the President. That  power should be construed to be wide enough to  enable the  President to make a reference where members of a  Bench find  themselves unable to decide a case according  to  what they  perceive to be the correct law and fact because of  an impediment arising from an earlier decision with which  they cannot  honestly agree. In such cases, it is  necessary  for the  healthy functioning of the Tribunal that the  President should  have the requisite authority to refer the case to  a larger 791 Bench. That is a power which is implied in the express grant authorising  the  President  to constitute  Benches  of  the Tribunal  for  effective and expeditious  discharge  of  its functions. [795H; 796A-B]     2.1  It  is true that a Bench of two  members  must  not lightly disregard the decision of another Bench of the  same Tribunal on an identical question. This is particularly true when the earlier decision is rendered by a larger Bench. The rationale of this rule is the need for continuity, certainty and predictability in the administration of justice. Persons affected by decisions of Tribunals or Courts have a right to expect that those exercising judicial functions will  follow the reason or ground of the judicial decision in the earlier cases  on  identical matters. Classification  of  particular goods  adopted  in  earlier decisions must  not  be  lightly disregarded  in  subsequent decisions,  lest  such  judicial inconsistency should shake public confidence in the adminis-

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tration of justice. It is, however, equally true that it  is vital to the administration of justice that those exercising judicial power must have the necessary freedom to doubt  the correctness  of an earlier decision if and  when  subsequent proceedings  bring to light what is perceived by them as  an erroneous  decision  in the earlier case.  In  such  circum- stances, it is but natural and reasonable and indeed effica- cious that the case is referred to a larger Bench. [795B-E]     2.2  In  the instant case, the Bench of two  members  in their  reasoned order pointed out what they perceived to  be an  error  of  law in the earlier decision  and  stated  the points  for the President to make a, reference to  a  larger Bench.  Accordingly  the Bench of two members  acted  within their  power  is stating the points of  law  which  required clarification  and  the President acted equally  within  the bounds  of his power in constituting a larger Bench to  hear and decide those points. [795E; 796C]

&     CIVIL  APPELLATE JURISDICTION: Civil Appeal No. 3955  of 1990.     From the Judgment and Order dated 7.12.1989 of the Delhi High Court in C.W. No. 1060 of 1987.     Dr. V. Gauri Shanker, C.V. Subba Rao, S. Rajappa and  M. Chandershekharan (N.P.) for the Appellants.     G.L.  Sanghi.  Raju Ramachandran, Dhruv Mehta  and  R.K. Sanghi for the Respondent. 792 The Judgment of the Court was delivered by THOMMEN, J. Special Leave is granted.     This appeal by the Union of India arises from the  Judg- ment  dated 7.12.1989 of the Delhi High Court in Civil  Writ No.  1060 of 1987 setting aside Orders dated 22.10.1986  and 4.3.1987.  The former order was made by a Bench of two  mem- bers  of  the Customs, Excise and Gold  (Control)  Appellate Tribunal (hereinafter called the ’Tribunal’) and the  latter order  was made by the President of the Tribunal.  By  their Order  dated  22.10.1986, the Bench of two  members  of  the Tribunal  stated  that they doubted the  correctness  of  an earlier decision of a Bench of three members of the Tribunal in  Bakelite Hylam Ltd. Bombay & Anr. v. Collector  of  Cus- toms, Bombay & Anr., [1986] 25 ELT 240 and directed that the case of the present respondent, Paras Laminates (P) Ltd., be placed before the President of the Tribunal for referring it to  a  larger Bench of the Tribunal. The  President  by  his Order dated 4.3. 1987 referred the case to a larger Bench of five members. These two orders were struck down by the  High Court  stating that the Bench of two members ought  to  have followed  the  earlier  decision of the larger  Bench  of  3 Judges  and a reference of the case to a still larger  Bench was contrary to judicial precedent and judicial discipline.     In Bakelite Hylam, (supra) a Bench of three members  had held that the goods in question fell under Tariff Item 84.60 as  claimed  by the importer in the Bills of Entry.  In  the present  case,  the importer claimed in its Bills  of  Entry that the goods imported by it fell under Tariff Item  84.60. But  the customs authorities rejected the contention of  the importer   and  classified  the  goods  under  Tariff   Item 73.15(2). The importer appealed to the Collector of Customs, but  without success. In its second appeal before the  Bench of  two members, the importer relied upon the earlier  deci- sion in Bakelite Hylam (supra) and contended that an identi- cal classification ought to have been adopted by the Customs

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Authorities  for identical goods. The Bench of two  members, however, referred the case to the President of the  Tribunal for  referring the same to a larger Bench. The order of  the Bench  of  two members and that of the President  have  been struck  down by the High Court by the impugned judgment  for the reasons stated above.     Mr. V. Gauri Shanker, appearing for the appellant--Union of  India,  submits that section 129-C of the  Customs  Act, 1962 contains 793 express provisions enabling the President of the Tribunal to constitute  larger Benches to resolve conflicts  in  opinion arising between members of a Bench or between Benches of the Tribunal. The Tribunal has ample powers to regulate its  own procedure, apart from the express provisions of the  statute in  that  behalf.  Counsel contends that  the  Tribunal  has inherent or incidental or ancillary powers to effectuate the statutory  powers expressly granted to it.  Counsel  submits that the statute must be so construed as to make the confer- ment of power efficacious and meaningful. To deny the  power of  a  Bench of two members to doubt the correctness  of  an earlier decision and to refer the case to the President  for being heard by a larger Bench is to fetter the  jurisdiction expressly vested in the Tribunal and thus stifle the  growth of law evolving from the decisions of the Tribunal  exercis- ing judicial powers like a Court, albeit within the statuto- ry limits of its jurisdiction.     Mr.  G.L.  Sanghi,  appearing for  the  respondent  (the importer)  submits  that the Tribunal is a creature  of  the statute. Its jurisdiction is limited to the specific  powers conferred  by the statute. It has no  inherent  jurisdiction and  its powers are not plenary and are limited to  the  ex- press provisions contained in the statute. While the  powers of a civil court are plenary and unlimited unless  expressly curtailed  by  statute,  the powers of a  tribunal  are  the result of express grant and cannot exceed the bounds limited by the constituting statute. In the present case the  powers of the Tribunal are expressly specified in the Customs  Act, 1962  and  those powers, counsel says, do  not  contain  any provision enabling the President to refer a case to a larger Bench  whenever  a doubt about an earlier  decision  is  ex- pressed by another Bench of the same Tribunal. According  to Mr.  Sanghi,  the  Bench should have  followed  the  earlier decision  even if the members doubted its  correctness,  and should  have left it to this Court to correct the error,  if any.     The  Tribunal is constituted by the  Central  Government under  section  129 of the Act. One of the  members  of  the Tribunal  is  appointed  by the Central  Government  as  its President. Section 129-C says that the powers and  functions of  the Tribunal may be exercised and discharged by  Benches constituted  by  the  President from  amongst  its  members. Subject to certain exceptions, a Bench shall consist of  one judicial member and one technical member [section  129c(2)]. Sub-section (5) of section 129-C provides for a reference of a  case  by  the President in the event  of  differences  in opinion  arising  amongst members on any  point.  This  sub- section reads: 794          "(5) If the members of a Bench differ in opinion on any  point,  the  point shall be decided  according  to  the opinion of the majority, if there is a majority, but if  the members  are equally divided, they shall state the point  or points  on which they differ and the case shall be  referred by the President for hearing on such point or points by  one

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or more of the other members of the Appellate Tribunal,  and such  point  or  points shall be decided  according  to  the opinion  of  the majority of the members  of  the  Appellate Tribunal  who have heard the case including those who  first heard it:          Provided that where the members of a Special  Bench are  equally  divided,  the point or points  on  which  they differ shall be decided by the President."     Sub-section  (6)  Section 129C says  that  the  Tribunal shall  have  the  power to regulate its  own  procedure.  It reads:          "(6)  Subject  to the provisions of this  Act,  the Appellate  Tribunal  shall have power to  regulate  its  own procedure  and the procedure of the Benches thereof  in  all matters  arising  out of the exercise of its powers  or  the discharge  of its functions, including the places  at  which the Benches shall hold their sitting." Sub-sections  (7) and (8) of this Section provide  that  the Tribunal shall, for certain specific purposes, be deemed  to be a civil court.     There is no doubt that the Tribunal functions as a court within the limits of its jurisdiction. It has all the powers conferred  expressly  by the statute. Furthermore,  being  a judicial  body,  it has all those incidental  and  ancillary powers  which  are  necessary to make  fully  effective  the express grant of statutory powers. Certain powers are recog- nised  as  incidental and ancillary, not  because  they  are inherent  in the Tribunal, nor because its  jurisdiction  is plenary,  but because it is the legislative intent that  the power  which is expressly granted in the assigned  field  of jurisdiction  is efficaciously and  meaningfully  exercised, the powers of the Tribunal are no doubt limited. Its area of jurisdiction  is clearly defined, but within the  bounds  of its  jurisdiction, it has all the powers expressly  and  im- pliedly granted. The implied grant is, of course, limited by the express grant and, therefore, it can only be such powers as are truly incidental and ancillary for doing all 795 such  acts  or employing all such means  as  are  reasonably necessary to make the grant effective. As stated in  Maxwell on Interpretation of Statutes, (eleventh edition) "where  an Act  confers  a jurisdiction, it impliedly also  grants  the power  of doing all such acts, or employing such  means,  as are  essentially  necessary  to its  execution."  See  also: Income Tax Officer, Camanore v. M.K. Mohammed Kunhi,  [1969] 71 ITR 815, 819.     It is true that a Bench of two members must not  lightly disregard the decision of another Bench of the same Tribunal on an identical question. This is particularly true when the earlier decision is rendered by a larger Bench. The  ration- ale  of this rule is the need for continuity, certainty  and predictability  in  the administration of  justice.  Persons affected by decisions of Tribunals or Courts have a right to expect that those exercising judicial functions will  follow the reason or ground of the judicial decision in the earlier cases  on  identical matters. Classification  of  particular goods  adopted  in  earlier decisions must  not  be  lightly disregarded  in  subsequent decisions,  lest  such  judicial inconsistency should shake public confidence in the adminis- tration of justice. It is, however, equally true that it  is vital to the administration of justice that those exercising judicial power must have the necessary freedom to doubt  the correctness  of an earlier decision if and  when  subsequent proceedings  being to light what is perceived by them as  an erroneous  decision  in the earlier case.  In  such  circum-

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stances, it is but natural and reasonable and indeed effica- cious  that the case is referred to a larger Bench. This  is what  was  done  by the Bench of two members  who  in  their reasoned  order  pointed out what they perceived  to  be  an error  of law in the earlier decision and stated the  points for the President to make a reference to a larger Bench.     That the President has ample power to refer a case to  a larger  Bench is not in doubt in view of sub-section (5)  of section  129-C, which we have set out above. That  provision clearly  says  that in the event of the members of  a  Bench differing  in  opinion  on any point, and  the  members  are equally divided, the case shall be referred to the President for hearing on any such point by one or more of the  members of  the Tribunal, and such point shall be decided  according to the opinion of the majority of the members.     It is true that sub-section (5) refers to difference  of opinion  arising amongst members of a Bench in a  particular case,  and  not specifically where the members  of  a  Bench doubt  the  correctness  of an  earlier  decision.  However, section 129-C confers power of reference upon the 796 President. That power should be construed to be wide  enough to enable the President to make a reference where members of a Bench find themselves unable to decide a case according to What they perceive to be the correct law and fact because of an  impediment arising from an earlier decision  with  which they  cannot honestly agree. In such cases, it is  necessary for the healthy functioning of the Tribunal that the  Presi- dent  should have the requisite authority to refer the  case to  a larger Bench. That is a power which is implied in  the express grant authorising the President to constitute Bench- es  of the Tribunal for effective and expeditious  discharge of its functions.     In our view, the Bench of two members acted within their power in stating the points of law which required clarifica- tion  and the President acted equally within the  bounds  of his  power in constituting larger Bench to hear  and  decide those points.     In the circumstances, we set aside the impugned judgment of the High Court. The appeal is allowed with costs here and in the High Court. T.N.A.                                                Appeal allowed. 797