Direct Tax, Income Tax

Unreported judgments: Why is it not required for tax cases?

Reported and Unreported Judgements: Why this distinction

Back in the days, the sight of a lawyer owning hundreds of books was common and the size of a lawyer’s library demonstrated their success in the profession. Information technology was in its nascent stage and the only way to preserve judgements was by printing and storing them physically. This was a costly and time consuming process. Due to these limitations, the distinction between reported and unreported judgements was created. Not all judgements lay down a principle of law and therefore, only the important decisions were published in the legal journals.

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(Tax cases decided by Delhi HC in 2010)

Indian Law Reports Act, 1875 provided that a court should not hear the report of any case other than one cited in a law report. The section has been interpreted over the years and an unreported judgement can be considered only when the certified copy of the judgement is filed.

Why this distinction is not required now

In case of tax judgements, we have been able to analyze the citations across reported and unreported judgements and found that unreported judgements are routinely cited and followed by the Courts.  This is consistent with the observations of the 96th report of Law Commission of India where they observe that Indian Law Reports Act, 1875 is a dead letter law and should be repealed.

Take the example of the case Softlink International Pvt. Ltd vs ACIT (419/PN/2008), an unreported judgement, discussed in detail the nature of expenditure for the money spent by a software company on developing the product from ITAT, has been cited thrice just in ITAT Mumbai. Interestingly, we also observed that the gap between the date of decision and the year when the judgement is reported can be as high as 20 years, during which time, the case will have a status of an unreported judgement. After analysing 35000 reported judgements, we found that about 5500 cases got reported after 2 years of the disposal. Out of these, 185 cases were reported 5 years after the judgement was delivered.

Also read our article on: Most Cited Unreported Judgments

The distinction between reported and unreported judgements is particularly problematic as the “law declared” under Article 141 of the Constitution includes unreported judgments. The High Court of Allahabad in Tarok Prasad (1976 (2) ALR 501) case held that mere reporting of a ruling does not give any greater sanctity and both reported and unreported judgements hold same legal value. However, in such a scenario, the requirements to make a public law publicly available is violated for unreported judgements.

Indian Law Reports Act being a dead letter law, has been repealed by the  Repealing and Amending Act, 2016. The routine manner in which unreported judgements are cited in the judgements indicate their importance. There is still a barrier towards accessing such case laws as the judgements passed by various courts in India is scattered across many websites making it impossible to search for the relevant case law. In this day and age of technology, access to the full range of a court’s decision, both reported and unreported judgements, should not be a far fetched dream. This information is important not only for legal research but also to draw analytics using all the case laws. The data can be used to identify the lacunas in the system, predict the timespan and result of a case to name a few things.

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