Case-1- If a person has set the machinery of law in motion he cannot abandon it to resume it after a number of years, because another person more adventurous than he in his turn got the statute declared unconstitutional, and got a favorable decision-Tilokchand Motichand & Ors vs H.B. Munshi & Anr on 22 November, 1968 Equivalent citations: 1970 AIR 898
The question is: can the petitioner in this case take advantage, after a lapse of a number of years, of the decision of this Court? He moved the High Court but did not come up in appeal to this Court. His contention is that the ground on which his petition was dismissed was different and the ground on which the statute was struck down was not within his knowledge and therefore he did not know of it and pursue it in this Court. To that I answer that law will presume that he knew the exact ground of unconstitutionality. Everybody is presumed to know the law. It was his duty to have brought the matter before this Court for consideration. In any event, having set the machinery of law in motion he cannot abandon it to resume it after a number of years, because another person more adventurous than he in his turn got the statute declared unconstitutional, and got a favorable decision. If I were to hold otherwise, then the decision of the High Court in any case once adjudicated upon and acquiesced it may be questioned in a fresh litigation revived only with the ‘argument, that the correct position was not known to the petitioner at the time when he abandoned his own litigation. I ,agree with the opinion of my brethren Bachawat and Mitter, JJ. that there is no question here of a mistake of law entitling the petitioner to invoke analogy of the Article in the Limitation Act. The grounds on which he moved the Court might well have impressed this Court which might have also have decided the question of the unconstitutionality of the Act as was done in the subsequent litigation by another party. The present petitioner should have taken the right ground in the High Court and taken it in appeal to this Court after the High Court decided against it. Not having done so and having abandoned his own litigation years ago, I do not think that this Court should apply the analogy of the Article in the Limitation Act and give him the relief now.
Case-2-Can an order passed earlier by an authority be rectified on the basis of subsequent decision of Jurisdictional High Court or Supreme Court- M/S Mepco Industries Ltd.Madurai vs Commr.Of Income Tax & Anr on 19 November, 2009
The Supreme Court dealt with the decision in the matter of Kil Kotagiri Tea and Coffee Estates Company Limited vs. Income Tax Appellate Tribunal & Ors., reported in  174 I.T.R.579
In Kil Kotagiri Tea and Coffee Estates Company Limited vs. Income Tax Appellate Tribunal & Ors., reported in  174 I.T.R.579, the facts were as follows: the assessee claimed interest on advance tax paid by it in excess but beyond the due dates. The Income Tax Officer disallowed the claim of the assessee. The Commissioner of Income Tax upheld the claim of the assessee. Following the decision of a learned Single Judge of the Kerala High Court in A. Sethumadhavan vs. Commissioner of Income Tax  122 I.T.R.587, the Tribunal held that belated payments were not to be taken into account as advance tax for the purpose of Section 214 of the Income Tax Act, and, therefore, interest was not admissible for such belated payments. However, subsequently, a Division Bench of the same High Court in Santha S. Shenoy vs. Union of India  135 I.T.R.39, reversed the decision of the learned Single Judge in A. Sethumadhavan (supra) and held that payment of tax made within the financial year, though not within specified dates, should be treated as advance tax and, consequently, the assessee was entitled to interest on excess tax paid. The assessee filed an application under Section 154 of the Act for rectification of the order of the Tribunal in view of the later decision in Santha S. Shenoy (supra). On the facts of that case, the Kerala High Court came to the conclusion that the rectification contemplated under Section 154 must be a `rectifiable mistake’ which is a mistake in the light of the law in force at the time when the order sought to be rectified was passed.
The Supreme Court held that Kerala High Court in the above decision laid down a principle of law-
The Kerala High Court also examined the judgement of the Calcutta High Court in Jiyajeerao Cotton Mills Limited (supra) and held that the said decision was distinguishable. The High Court laid down a principle of law, which was applicable across the board, namely, payment of advance tax made within the financial year, though not within the specified dates, should be treated as advance tax and, therefore, the assessee was entitled to interest on excess tax paid. The judgement in Kil Kotagiri Tea and Coffee Estates Company Limited (supra) is not applicable to the facts of the present case, as stated above.
The Supreme Court dealt with the decision in the matter of Jiyajeerao Cotton Mills Limited vs. Income Tax Officer, Calcutta & Ors., reported in  130 I.T.R. 710
Calcutta High Court in the case of Jiyajeerao Cotton Mills Limited vs. Income Tax Officer, Calcutta & Ors., reported in  130 I.T.R. 710. In that case, the appellant- assessee derived profits from three industries, one of which qualified for special rebate under Part-I of Schedule-I to the Finance Act, 1965, for the Assessment Year 1966-1967. In granting this special rebate, the Income Tax Officer computed the profits attributable to that industry without deducting development rebate granted to the appellant. The Income Tax Officer sought to rectify the mistake under Section 154 of the Act by re- computing the profits by deducting the development rebate. The appellant filed a writ petition for setting aside the notice of rectification. It was held by the Calcutta High Court that since there was conflict of opinion on computation of profits of priority industry for granting tax relief which conflict was resolved by the Supreme Court later on for the subsequent Assessment Year 1967- 1968, such subsequent decision of the Supreme Court did not obliterate the conflict of opinion prior to it. It was held that, under Section 154 of the Act, rectification was not permissible on debatable issue.
It was finally held by the Supreme Court-
On the facts of the present case, we are of the view that the present case involves change of opinion. In this connection, it must be noted that Government grants different types of subsidies to the entrepreneurs. The subsidy in Sahney Steel and Press Works Limited (supra) was an incentive subsidy linked to production. In fact, in Sahney Steel and Press Works Limited (supra) [at page 257], this Court categorically stated that the Scheme in hand was an incentive Scheme and it was not a Scheme for setting up the industries. In the said case, the salient features of the Scheme were examined and it was noticed that the Scheme formulated by the Government of Andhra Pradesh was admissible only after the commencement of production. In Income Tax matters, one has to examine the nature of the item in question, which would depend on the facts of each case. In the present case, we are concerned with power subsidy whereas in the case of Commissioner of Income Tax vs. Ponni Sugars and Chemicals Limited, reported in  306 I.T.R.392, the subsidy given by the Government was for re-paying loans. Therefore, in each case, one as to examine the nature of subsidy. This exercise cannot be undertaken under Section 154 of the Act. There is one more reason why Section 154 in the present case was not invokable by the Department. Originally, the Commissioner of Income Tax, while passing orders under Section 264 of the Act on 30th April, 1997, had taken the view that the subsidy in question was a capital receipt not taxable under the Act. After the judgement of this Court in Sahney Steel and Press Works Limited (supra), the Commissioner of Income Tax has taken the view that the subsidy in question was a revenue receipt. Therefore, in our view, the present case is a classic illustration of change of opinion.
Case-3- Subsequent to the order, the jurisdictional High Court or their Lordships of the Supreme Court interpret the same provision and take a contrary view. The apparent effect of the judgment interpreting the provision is that the view taken by the authority is rendered erroneous. It is not in conformity with the provision of the statute. Thus, there is a mistake-CIT v. Smt.Aruna Luthra, (2001) 252 ITR 76 (P & H)
In a given case, on interpretation of a provision, an authority can take a view in favour of one of the parties. Subsequent to the order, the jurisdictional High Court or their Lordships of the Supreme Court interpret the same provision and take a contrary view. The apparent effect of the judgment interpreting the provision is that the view taken by the authority is rendered erroneous. It is not in conformity with the provision of the statute. Thus, there is a mistake. Should it still be perpetuated? If the contention raised on behalf of the assessee were accepted, the result would be that even though the order of the authority is contrary to the law declared by the highest Court in the state or the country, still the mistake couldn’t be rectified for the reason that the decision is subsequent to the date of the order.”
The Full Bench of Punjab and Haryana High Court Held that
“If the issue of error in the order is to be examined only with reference to the date on which it was passed, it may be possible to legitimately contend that it was legal on the date on which it was passed. The subsequent decision has only rendered it erroneous or illegal. However, there was no error much less than an apparent error on the date of its passing. Thus, provision of s. 154 is not applicable. However, such a view shall be possible only if the provision were to provide that the error has to be seen in the order with reference to the date on which it was passed. Such words are not there is the statute. Resultantly, such a restriction cannot be introduced by the Court. Thus, the contention raised by the counsel for the assessee cannot be accepted”.