M/S TRIMURTHI FRAGRANCES (P) LTD. THROUGH ITS DIRECTOR SHRI PRADEEP KUMAR AGRAWAL VERSUS GOVERNMENT OF N.C.T. OF DELHI THROUGH ITS PRINCIPAL SECRETARY (FINANCE) & ORS.

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 8486 OF 2011

M/S TRIMURTHI FRAGRANCES (P) LTD. THROUGH

ITS DIRECTOR SHRI PRADEEP KUMAR AGRAWAL APPELLANT (S)

VERSUS

GOVERNMENT OF N.C.T. OF DELHI THROUGH

ITS PRINCIPAL SECRETARY (FINANCE) & ORS. RESPONDENT (S)

WITH

CIVIL APPEAL NO. 8485/2011

CIVIL APPEAL NO. 8487/2011

CIVIL APPEAL NO. 84968501/2011

CIVIL APPEAL NO. 8502/2011

CIVIL APPEAL NO. 8617/2014

CIVIL APPEAL NO. 1037410379/2014

CIVIL APPEAL NO. 8488/2011

CIVIL APPEAL NO. 84918494/2011

CIVIL APPEAL NO. 8495/2011

SPECIAL LEAVE PETITION (C) No. 33322/2017

J U D G M E N T

INDIRA BANERJEE J.

1. The main question raised in this batch of appeals is, whether, ‘Pan

Masala’, which contains tobacco and gutka, covered by an Entry in the

First Schedule to the Additional Duties of Excise (Goods of Special

Importance) Act 1957, hereinafter referred to as the ‘ADE Act’, are taxable

by the State under the Delhi Sales Tax Act 1975 and/or the Uttar Pradesh

Trade Tax Act 1948 and/or the Tamil Nadu General Sales Tax Act, 1959.

2. In Shanti Fragrances v. Union of India and others1

, a Division

Bench of this Court observed:

12. It does appear that there is a direct conflict between Kothari

Products [Kothari Products Ltd. v. State of A.P., (2000) 9 SCC

263], Radheshyam Gudakhu Factory [State of Orissa v. Radheshyam

Gudakhu Factory, (2018) 11 SCC 505 : (1988) 68 STC 92 (SC)]

and Reliance Trading Co. [Reliance Trading Co. v. State of Kerala,

(2011) 15 SCC 762] judgments on the one hand, and Agra Belting

Works [CST v. Agra Belting Works, (1987) 3 SCC 140 : 1987 SCC

(Tax) 233] , which was also followed by two other judgments, on the

other. We may hasten to add that there are threeJudge Bench

decisions on both sides. ...”

3. The Bench further observed:

“13. … One other interesting feature of this case is whether, after

Union of India v. Raghubir Singh2

, SCR at pp. 33537 : SCC pp. 777

78, para 27, it can be stated that Judges of this Court do not sit in 2s

and 3s for mere convenience, but that a Bench which is numerically

superior will prevail over a Bench of lesser strength. If the doctrine of

precedent, as applied by this Court, is to be a matter of numbers,

then, interestingly enough, as has been held by Beaumont, C.J. in

Ningappa Ramappa Kurbar v. Emperor3

, the position in law could be

as under: (AIR p. 409 : SCC OnLine Bom)

“…The Court in that case consisted of five Judges, one of whom,

Shah, J., dissented from that proposition. The authority of the case

may be open to question, since there had been a previous decision

of a Full Bench of this Court of four Judges in Queen

Empress v. Mugappa Bin Ningapa [Queen Empress v. Mugappa

Bin Ningapa, ILR (1893) 18 Bom 377] , which had reached a

different conclusion. Apparently it was considered that five Judges,

by a majority of four to one, could overrule a unanimous decision of

four Judges, the net result being that the opinion of four Judges

prevailed over the opinion of five Judges of coordinate jurisdiction.

There seems to be very little authority on the powers and

constitution of a Full Bench. There can be no doubt that a Full

1 (2018) 11 SCC 305

2 (1989) 2 SCC 754; (1989) 3 SCR 316

3 1941 SCC OnLine Bom 41 : AIR 1941 Bom 408

Bench can overrule a Division Bench, and that a Full Bench must

consist of three or more Judges; but it would seem anomalous to

hold that a later Full Bench can overrule an earlier Full Bench,

merely because the later Bench consists of more Judges than the

earlier. If that were the rule, it would mean that a Bench of seven

Judges, by a majority of four to three, could overrule a unanimous

decision of a Bench of six Judges, though all the Judges were of

coordinate jurisdiction. In Enatullah v. Kowsher

Ali [Enatullah v. Kowsher Ali, 1926 SCC OnLine Cal 104 : ILR

(1927) 54 Cal 266] , Sanderson, C.J., stating the practice in

Calcutta, seems to have been of opinion that a decision of a Full

Bench could only be reversed by the Privy Council or by a Bench

specially constituted by the Chief Justice. Even if this be the true

rule, there is nothing to show that the Chief Justice acted upon it

in Emperor v. Purshottam Ishwar Amin [Emperor v. Purshottam

Ishwar Amin, 1920 SCC OnLine Bom 144 : ILR (1921) 45 Bom 834]

. I do not recollect myself ever to have constituted a Special Bench

to consider the ruling of a Full Bench, though I have constituted

many Full Benches to consider rulings of Division Benches.

However, I need not pursue this subject further, since, for the

purpose of the present appeal, I am prepared to assume that an

alternative charge of perjury lies, and that it was a charge of that

nature which the learned Additional Sessions Judge contemplated.

The question then is whether it is expedient in the interests of

justice that such a charge should be made.”

14. This conundrum was also addressed by M.B. Lokur, J. in Supreme

Court AdvocatesonRecord Assn. v. Union of India [Supreme Court

AdvocatesonRecord Assn. v. Union of India, (2016) 5 SCC 1] , as

follows: (SCC pp. 57778, para 669)

“669. One of the more interesting aspects of Pradeep Kumar

Biswas [Pradeep Kumar Biswas v. Indian Institute of Chemical

Biology, (2002) 5 SCC 111 : 2002 SCC (L&S) 633] is that out of

the 7 (seven) learned Judges constituting the Bench, 5 learned

Judges overruled the unanimous decision of another set of 5

learned Judges in Sabhajit Tewary [Sabhajit Tewary v. Union of

India, (1975) 1 SCC 485 : 1975 SCC (L&S) 99] . Two of the

learned Judges in Pradeep Kumar Biswas [Pradeep Kumar

Biswas v. Indian Institute of Chemical Biology, (2002) 5 SCC

111 : 2002 SCC (L&S) 633] found that Sabhajit

Tewary [Sabhajit Tewary v. Union of India, (1975) 1 SCC 485 :

1975 SCC (L&S) 99] had been correctly decided. In other words,

while a total of 7 learned Judges took a particular view on an

issue of fact and law, that view was found to be incorrect by 5

learned Judges, whose decision actually holds the field today.

Is the weight of numbers irrelevant? Is it that only the numbers

in a subsequent Bench are what really matters? What would

have been the position if only 4 learned Judges in Pradeep

Kumar Biswas [Pradeep Kumar Biswas v. Indian Institute of

Chemical Biology, (2002) 5 SCC 111 : 2002 SCC (L&S) 633] had

decided to overrule Sabhajit Tewary [Sabhajit Tewary v. Union

of India, (1975) 1 SCC 485 : 1975 SCC (L&S) 99] while the

remaining 3 learned Judges found no error in that decision?

Would a decision rendered unanimously by a Bench of 5

learned Judges stand overruled by the decision of 4 learned

Judges in a subsequent Bench of 7 learned Judges? Pradeep

Kumar Biswas [Pradeep Kumar Biswas v. Indian Institute of

Chemical Biology, (2002) 5 SCC 111 : 2002 SCC (L&S) 633]

presents a rather anomalous situation which needs to be

addressed by appropriate rules of procedure. If this anomaly is

perpetuated then the unanimous decision of 9 learned Judges

in Third Judges case [Special Reference No. 1 of 1998, In re,

(1998) 7 SCC 739] can be overruled (as sought by the learned

Attorney General) by 6 learned Judges in a Bench of 11 learned

Judges, with 5 of them taking a different view, bringing the total

tally of Judges having one view to 14 and having another view

to 6, with the view of the 6 learned Judges being taken as the

law!”

15. It may be pointed out that in the present case, if numbers are

totted up, the Kothari Products [Kothari Products Ltd. v. State of A.P.,

(2000) 9 SCC 263] line, as followed in Radheshyam Gudakhu

Factory [State of Orissa v. Radheshyam Gudakhu Factory, (2018) 11

SCC 505 : (1988) 68 STC 92 (SC)] and Reliance Trading Co. [Reliance

Trading Co. v. State of Kerala, (2011) 15 SCC 762] , will go to a Bench

strength, numerically speaking, of eight learned Judges, as against

the Agra Belting Works [CST v. Agra Belting Works, (1987) 3 SCC 140 :

1987 SCC (Tax) 233] line, which goes up to a numerical strength of six

learned Judges. If the dissenting judgment of B.C. Ray, J. is to be

added to the Kothari Products [Kothari Products Ltd. v. State of A.P.,

(2000) 9 SCC 263] line, then we have a numerical strength of 9:6. The

question of numerical strength gains poignancy when one judgment is

overruled by another, as has been pointed by Beaumont, C.J.

in Ningappa Ramappa Kurbar [Ningappa Ramappa Kurbar v. Emperor,

1941 SCC OnLine Bom 41 : AIR 1941 Bom 408] , and by Lokur, J.

in Supreme Court AdvocatesonRecord Assn. [Supreme Court AdvocatesonRecord Assn. v. Union of India, (2016) 5 SCC 1]”

4. The twoJudge Bench, referred to the Constitution Bench, the

following questions:

i) Whether the Kothari Products Ltd. v. State of A.P.4

line of

judgments or the Central Sales Tax vs. Agra Belting Work5

, line

of judgments is correct in law; and

4 (2000) 9 SCC 263

5 (1987) 3 SCC 140

ii) What should be the proper guidelines for the future for overruling

an earlier decision of this Court, and to what extent should the

Courts be guided by the propositions in Ningappa Ramappa

Kurbar v. Emperor6

, the observations of Lokur, J. in Supreme

Court AdvocatesonRecord Assn. v Union of India7

and the

judgment of the Court of Appeal in Harper v. National Coal

Board8

5. The ADE Act has been enacted to provide for the levy and collection

of additional duties of excise in respect of certain goods, over and above

the duties of excise levied under the Central Excise Act 1944. The

Statement of Objects of the ADE Act reads:

“The object of the Bill is to impose additional duties of excise in

replacement of the sales taxes levied by the Union and States on

sugar, tobacco and millmade textiles and to distribute the net

proceeds of these taxes, except the proceeds attributable to Union

Territories, to the States. The distribution of the proceeds of the

additional duties broadly follows the pattern recommended by the

Second Finance Commission. Provision has been made that the

States which levy a tax on the sale or purchase of these

commodities after 1.4.1958 do not participate in the distribution of

the net proceeds. Provision is also being made in the Bill for

including these three goods in the category of goods declared to be

of special importance in interState trade or commerce so that,

following the imposition of uniform duties of excise on them, the

rates of sales tax if levied by any State are subject from 1.4.1958

to the restrictions in Section 15 of the Central Sales Tax Act, 1956.”

6. In Mahalakshmi Oil Mills v. State of A.P.9

, this Court, held:

“5 .. In short, the object of the Act was to substitute additional

duties of excise in place of sales tax so far as these goods were

concerned. Since the State legislatures were at liberty, if they

wished, to levy taxes on the sale or purchase of these

6 1941 SCC Online Bom 41 : Air m1941 Bom 408

7 (2016) 5 SCC 1

8 [1974] QB 614

9 (1989) 1 SCC 164

commodities, the Act provided that the additional excise duties will

be distributed only among such States as did not levy a tax on the

sale or purchase of these commodities. Also, by including these

goods in the category of goods declared to be of special importance

in interState trade or commerce, the legislation ensured that, if

any State levied sales tax in respect of these commodities, such

levy was subject to the restrictions contained in the Central Sales

Tax Act, 1956.”

7. It is well settled that once goods are chargeable under the ADE Act,

the State cannot levy sales tax on the same goods under a State

enactment. In Godfrey Phillips India Ltd. v. State of U.P10

., this Court

held:

“70. So even if tobacco is an article of luxury, a tax on its supply is

within the exclusive competence of the State but subject to the

constitutional curbs prescribed under Article 286 read with

Sections 14 ad 15 of the Central Sales Tax Act, 1956 and most

importantly the ADE Act of 1957 under which no sales tax can be

levied on tobacco at all if the State was to take the benefits under

that Act.”

8. In Kothari Products Ltd. (supra), the question was, ‘tobacco’ being

specified in the First Schedule to the ADE Act, and exempted from Sales

Tax under Section 8 of the Andhra Pradesh General Sales Tax Act 1957,

whether ‘gutka’ could be taxed by the State of Andhra Pradesh. The Court

found that “gutka” being tobacco, covered by an Entry in the First

Schedule to the ADE Act and liable to be taxed under the ADE Act, it was

covered by the exemption in Section 8 of the Andhra Pradesh General

Sales Tax Act . The State Act could not have been amended to tax

“gutka”.

10 (2005) 2 SCC 515

9. There is a line of decisions of this Court, taking the same view as

Kothari Products Ltd. (supra) and holding that items covered by the

expression ‘tobacco’ and other items included in the First Schedule to the

ADE Act are not taxable by the State.

10. In the State of Orrisa vs. Radhey Shyam Gudakhu Factory11

the issue was whether Gudakhu was covered by the expression ‘tobacco’

as defined in Section 2(c) of ADE Act. Following the decision of the

Calcutta High Court in Gulabchand Harekchand v. State of West

Bengal12

, this Court held that Gudakhu is a product of ‘tobacco’ and

hence, a product which falls within the exemption covered by S. No. 35 of

the Schedule to the Orissa Sales Tax Act 1947.

11. In Reliance Trading Company, Kerala v. State of Kerala13, this

Court took the view that cotton based tarpaulin was exempted from Sales

Tax under the Kerala General Sales Tax Act, 1963, since it was exigible to

Additional Excise Duty under the First Schedule of the ADE Act.

12. In Agra Belting Works (supra), the question was whether any class

of goods – cotton fabrics of all kinds, to be specific, exempted from Sales

Tax Act under section 4 of the Uttar Pradesh Sales Tax Act, 1948, would

be exigible to Sales Tax by virtue of a subsequent Notification under

11 (2018) 11 SCC 505

12 1984 SCC Online Cal 274

13 (2011) 15 SCC 762

Section 3A of the said Act, specifying the rate of sales tax in respect of an

item of the class of goods exempted under Section 4, without withdrawing

the earlier Notification under Section 4. While the majority held that a

Notification of recall of exemption was not a condition precedent for

imposition of tax, by a valid Notification under Section 3A, B.C.Ray, J.

dissented with the view of the majority.

13. In Agra Belting Works (supra), the majority of the threeJudge

Bench of this Court, by ratio of 2:1, inter alia, held:

“6. As has been pointed out above, Section 3 is the charging

provision; Section 3A authorises variation of the rate of tax and

Section 4 provides for exemption from tax. All the three sections are

parts of the taxing scheme incorporated in the Act and the power

both under Section 3A as also under Section 4 is exercisable by

the State Government only. When after a notification under Section

4 granting exemption from liability, a subsequent notification under

Section 3A prescribes the rate of tax, it is beyond doubt that the

intention is to withdraw the exemption and make the sale liable to

tax at the rate prescribed in the notification. As the power both for

the grant of exemption and the variation of the rate of tax vests in

the State Government and it is not the requirement of the statute

that a notification of recall of exemption is a condition precedent to

imposing tax at any prescribed rate by a valid notification under

Section 3A, we see no force in the contention of the assessee

which has been upheld by the High Court. In fact, the second

notification can easily be treated as a combined notification — both

for withdrawal of exemption and also for providing higher tax.

When power for both the operations vests in the State and the

intention to levy the tax is clear we see no justification for not

giving effect to the second notification. We would like to point out

that the exemption was in regard to a class of goods and while the

exemption continues, a specific item has now been notified under

Section 3A of the Act.”

14. B.C. Ray, J. dissenting with the majority view, held:

“14. The next question for consideration is what is the effect of a

notification under Section 3A including an item in the Schedule for

imposition of sales tax though there is a general exemption from

sales tax under Section 4 of the Sales Tax Act.

…

15. A similar question also arose in the case of CST v. Rita Ice

Cream Co., Gorakhpur [1981 UPTC 1239 (DB)(All HC)] and it was

held that so long as the general exemption under Section 4

continues a particular item notified under Section 3A of Sales Tax

Act cannot be taxed.

16. On a conspectus of all these decisions aforesaid, the only

irresistible inference follows that so long as the general exemption

granted under Section 4 with regard to cotton fabrics of all kinds

continues no sales tax can be imposed on beltings of all kinds

which fall within the cotton fabrics of all kinds and the general

exemption under Section 4 will prevail over the notification made

under Section 3A of the Sales Tax Act. I am unable to subscribe to

the view that since the notification under Section 3A of the U.P.

Sales Tax Act has been made subsequent to the notification issued

under Section 4 of the said Act, the subsequent notification under

Section 3A will prevail over the general exemption granted under

Section 4 of the said Act. In my considered opinion the reasonings

and conclusions arrived at by the High Court are unexceptionable.”

15. In Sales Tax Officer, SectorIX, Kanpur vs. Dealing Dairy

Products and Anr.14, a two Judge Bench of this Court followed the

majority decision in Agra Belting Works (supra), and held that, even

though the State of Uttar Pradesh had been issuing notifications under

Section 4 of the U.P. Sales Tax Act 1948, exempting milk and milk

products from levy of sales tax, a later notification under Section 3A

notifying the rate of tax on icecream amongst other items, withdrew the

exemption in respect of all kinds of icecream and made the sale of icecream exigible to sales tax at the rate specified in the Notification under

Section 3A.

14 (1994) Supp. 2 SCC 639

16. In State of Bihar and Others v. Krishna Kumar Kabra and

Another15, a two Judge Bench of this Court referred to and followed Agra

Belting Works (supra) and Dealing Dairy Products (supra) and held

that Sections 3A and 4 of the U.P. Sales Tax Act were parts of a taxing

scheme incorporated in that Act and therefore, where the notification was

issued under Section 3A prescribing the rate of tax on goods, which had

been exempted from tax under Section 4, by an earlier notification, it had

to be held that the later notification was intended to withdraw the

exemption and make the sale leviable to tax at the rate prescribed in the

later notification.

17. In our considered opinion there is no conflict between the Kothari

Products (supra) line of cases and the Agra Belting line of cases. The

Kothari Products (supra) line of cases was on the question of whether

“tobacco” or other goods specified in the First Schedule to the ADE Act

and hence exempted from Sales Tax under State sales tax enactments,

can be made exigible to tax under the State enactments by amending the

Schedule thereto. On the other hand, Agra Belting Works (supra) line of

cases was on the question of interplay between general exemption of

specified goods from sales tax under Section 4 of the U.P. Sales Tax Act

and specification of rates of sales tax under Section 3A of the said Act.

This Court held that goods exempted from sales tax under Section 4

would be exigible to tax by virtue of subsequent notification under Section

3A specifying the rate of sales tax for any specific item of the class of

15 (1997) 9 SCC 763

goods earlier exempted under Section 4. There being no conflict, the

reference to Constitution Bench is incompetent. The cases may be placed

for decision before the regular Bench.

18. The second question is answered by the judgment of the

Constitution Bench of this Court in Dr. Jaishri Laxmanrao Patil v.

The Chief Minister and Others.16. The Constitution Bench speaking

through Bhat, J. held:

“10. A careful reading of the judgments in Indra Sawhney v. Union

of India [Indra Sawhney v. Union of India, 1992 Supp (3) SCC

217 : 1992 SCC (L&S) Supp 1] , clarifies that seven out of nine

Judges concurred that there exists a quantitative limit on

reservation—spelt out at 50%. In the opinion of four Judges,

therefore, per the judgment of B.P. Jeevan Reddy, J., this limit

could be exceeded under extraordinary circumstances and in

conditions for which separate justification has to be forthcoming by

the State or the agency concerned. However, there is unanimity in

the conclusion by all seven Judges that an outer limit for

reservation should be 50%. Undoubtedly, the other two Judges,

Ratnavel Pandian and P.B. Sawant, JJ. indicated that there is no

general rule of 50% limit on reservation. In these circumstances,

given the general common agreement about the existence of an

outer limit i.e. 50%, the petitioner's argument about the incoherence

or uncertainty about the existence of the rule or that there were

contrary observations with respect to absence of any ceiling limit in

other judgments (the dissenting judgments of K. Subba Rao, in T.

Devadasan v. Union of India [T. Devadasan v. Union of India,

(1964) 4 SCR 680 : AIR 1964 SC 179] , the judgments of S.M. Fazal

Ali and Krishna Iyer, JJ. in State of Kerala v. N.M. Thomas [State

of Kerala v. N.M. Thomas, (1976) 2 SCC 310 : 1976 SCC (L&S)

227] and the judgment of Chinnappa Reddy, J. in K.C. Vasanth

Kumar v. State of Karnataka [K.C. Vasanth Kumar v. State of

Karnataka, 1985 Supp SCC 714 : 1985 Supp (1) SCR 352] ) is not

an argument compelling a review or reconsideration of Indra

Sawhney [Indra Sawhney v. Union of India, 1992 Supp (3) SCC

217 : 1992 SCC (L&S) Supp 1] rule.

11. The respondents had urged that discordant voices in different

subjects (Devadasan [T. Devadasan v. Union of India, (1964) 4

SCR 680 : AIR 1964 SC 179] , N.M. Thomas [State of Kerala v. N.M.

Thomas, (1976) 2 SCC 310 : 1976 SCC (L&S) 227] and Indra

16 (2021) 8 SCC 1

Sawhney [Indra Sawhney v. Union of India, 1992 Supp (3) SCC

217 : 1992 SCC (L&S) Supp 1] ) should lead to reexamination of

the ratio in Indra Sawhney [Indra Sawhney v. Union of India, 1992

Supp (3) SCC 217 : 1992 SCC (L&S) Supp 1] . It would be useful to

notice that unanimity in a given Bench (termed as a “super

majority”) — denoting a 5 : 0 unanimous decision in a Constitution

Bench cannot be construed as per se a strong or compelling reason

to doubt the legitimacy of a larger Bench ruling that might contain

a narrow majority (say, for instance with a 4 : 3 vote, resulting in

overruling of a previous unanimous precedent). The principle of

stare decisis operates both vertically — in the sense that decisions

of appellate courts in the superior in vertical hierarchy, bind

tribunals and courts lower in the hierarchy, and horizontally — in

the sense that a larger Bench formation ruling, would be binding

and prevail upon the ruling of a smaller Bench formation. The logic

in this stems from the raison d'être for the doctrine of precedents

i.e. stability in the law. If this rule were to be departed from and

the legitimacy of a subsequent larger Bench ruling were to be

doubted on the ground that it comprises of either plurality of

opinions or a narrow majority as compared with a previous Bench

ruling (which might be either unanimous or of a larger majority, but

of lower Bench strength), there would be uncertainty and lack of

clarity in the realm of precedential certainty. If precedential

legitimacy of a larger Bench ruling were thus to be doubted, there

are no rules to guide the courts' hierarchy or even later Benches of

the same court about which is the appropriate reading to be

adopted (such as for instance, the number of previous judgments

to be considered for determining the majority, and consequently

the correct law).

12. In view of the above reasoning, it is held that the existence of a

plurality of opinions or discordant or dissident judgments in the

past — which might even have led to a majority (on an overall

headcount) supporting a particular rule in a particular case cannot

detract from the legitimacy of a rule enunciated by a later, larger

Bench, such as the nineJudge Bench ruling in Indra

Sawhney [Indra Sawhney v. Union of India, 1992 Supp (3) SCC

217 : 1992 SCC (L&S) Supp 1] .”

19. The view of Bhat, J. was expressly concurred by Rao, J. (Para 196)

and Gupta, J. (Para 227). There was no dissent to the view. In view of

Article 145(5) of the Constitution of India concurrence of a majority of the

judges at the hearing will be considered as a judgment or opinion of the

Court. It is settled that the majority decision of a Bench of larger strength

would prevail over the decision of a Bench of lesser strength, irrespective

of the number of Judges constituting the majority.

20. In view of the fiveJudge Bench decision in Dr. Jaishri Laxman

Rao (supra), it is not necessary for this Court to answer the question.

….……………………………………. J.

[INDIRA BANERJEE]

………..……………………………… J.

[SURYA KANT]

………..……………………………… J.

[M.M. SUNDRESH]

………..……………………………… J.

[SUDHANSHU DHULIA]

NEW DELHI;

SEPTEMBER 19, 2022

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 8486 OF 2011

M/S TRIMURTHI FRAGRANCES (P) LTD. THROUGH

ITS DIRECTOR SHRI PRADEEP KUMAR AGRAWAL .....APPELLANT(S)

VERSUS

GOVT OF N.C.T OF DELHI THROUGH ITS

PRINCIPAL SECRETARY (FINANCE) & ORS. .....RESPONDENT(S)

W I T H

CIVIL APPEAL NO. 8485 OF 2011

CIVIL APPEAL NO. 8487/2011

CIVIL APPEAL NOS. 8496-8501/2011

CIVIL APPEAL NO. 8502/2011

CIVIL APPEAL NO. 8617/2014

CIVIL APPEAL NOS. 10374-10379/2014

CIVIL APPEAL NO. 8488/2011

CIVIL APPEAL NOS. 8491-8494/2011

CIVIL APPEAL NO. 8495/2011

SLP(C) NO. 33322/2017

J U D G M E N T

HEMANT GUPTA, J.

A. I entirely agree with the judgment authored by Hon. Indira Banerjee J. However,

in respect of Question No.2, I would like to supplement the opinion expressed.

B. Mr. Gopal Sankaranarayanan, learned Senior Advocate referred to Article 145(5)

of the Constitution to contend that a judgment of this Court is mandated to be

delivered with the concurrence of a majority of the Judges present at the

hearing of the case, but nothing in this clause shall be deemed to prevent a

Judge who does not concur from delivering a dissenting judgment or opinion.

Thus, the Constitution itself envisaged that the judgment is by the majority of

the Judges.

C. A reference was made to insertion of Article 144A in the Constitution by the 42nd

Amendment with effect from 01.02.1977. The amendment reads thus:

“144-A. Special provisions as to disposal of questions relating to

constitutional validity of laws – (1) The minimum number of Judges

of the Supreme Court who shall sit for the purpose of determining

any question as to the constitutional validity of any Central law or

State law shall be seven.

A. A Central law or a State law shall not be declared to be

constitutionally invalid by the Supreme Court unless a majority of

not less than two-thirds of the Judges sitting for the purpose of

determining the question as to the constitutional validity of such

law hold it to be constitutionally invalid.”

D. The said amendment was undone by 43rd Amendment when Article 144-A was

omitted with effect on and from 01.02.1977. Though the said insertion of Article

144-A stands repealed, but it shows that the legislature also considered majority

of not less than 2/3rd of Judges should determine the question as to the

constitutional validity of law. Therefore, even such amendment contemplated

dissent and a minority view.

E. A similar question has been examined by a Full Bench of the High Court of

Gujarat in a judgment reported as State of Gujarat v GordhandasKeshavji

Gandhi and Ors.

17. The Court was considering the binding nature of the

judgments of the Bombay High Court in the successor Gujarat High Court but an

ancillary question was considered in respect of numerical strength of the Bench

as well. Though there is divergence of opinion amongst the judges of the Court,

but the minority view was relevant for the second question arising for

consideration. The minority view is expressed by N.M. Miabhoy J and

P.N.Bhagwati J. We are in agreement with the said view. The order passed by

learned Hon’ble Mr. Justice N.M. Miabhoy J reads thus:

“44. ……………The principles which guided the latter Court in the

matter of judicial precedents have been set out by that Court in

(1944) 1 KB 718. All Division Benches considered themselves to be

bound by the judicial precedents created by Full Benches not only

on the ground of judicial comity but also on the ground that a Full

Bench consisted of more number of Judges than a Division Bench. If

a judicial precedent created by a Full Bench required to be

reconsidered, then, the usual practice was to refer the matter to a

Full Bench consisting of more number of Judges than the number

which constituted the former Full Bench whose decision was sought

to be revised. The practice was to regard the precedent of a larger

Full Bench as having greater efficacy and binding authority than

the precedent of a Full Bench consisting of a smaller number of

Judges. This practice was criticised by Beaumont, C.J. in 43 Bom LR

864 at p. 868 : (AIR 1941 Bom 408 at p. 409). It is not necessary to

express any opinion in this case as to whether this criticism was or

was not justified. However, the observations made by the learned

17 AIR 1962 Guj 128

Chief Justice in the above case ignores the important fact that,

when a Full Bench consists of a larger number of Judges, then, the

decision is not merely of a greater number of Judges, but it is one

arising from out of the joint deliberations and discussions of a

greater number of Judges and that this fact may give to the

decision of a Full Bench consisting of a larger number of Judges a

greater binding authority than that of a Full Bench consisting of a

smaller number of Judges…………….. In view of the observations

made by Their Lordships of the Supreme Court in the aforesaid two

cases18, the view that should prevail in India is the view-that the

decision of a larger Full Bench should be followed in preference to

the decision of a smaller Full Bench.

xxx xxx xxx

The order passed by learned Hon’ble Mr. Justice P.N.Bhagwatireads thus:-

xxx xxx xxx

117. ……………………Is the subsequent Full Bench of the High Court

bound to follow the decision of the previous Full Bench of the High

Court, though the previous Full Bench consisted of a lesser number

of Judges than the subsequent Full Bench? The question ultimately

resolves itself into a narrow one, namely, how far the principle of

superiority of numerical strength should be carried. If the principle

of superiority of numerical strength is applied to Full Benches of the

High Court whatever be the numerical strength of the Judges

constituting the Full Benches, a Full Bench of four Judges would be

able to override the previous decision of a Full Bench of three

Judges, a Full Bench of five Judges would be able to override the

previous decision of a Full Bench of four Judges and so on and so

forth. Beaumont, C.J., expressed a doubt as regards the correctness

of this position in 43 Bom LR 864 : (AIR 1941 Bom 408) in the

following terms:—

“……Apparently it was considered that five Judges by a

majority of four to one, could overrule a unanimous decision

of four Judges, the net result being that the opinion of four

Judges prevailed over the opinion of five Judges of coordinate jurisdiction. There seems to be very little authority

18(1) AIR 1960 SC 936

(2) AIR 1960 SC 1118

on the powers and constitution of a Full Bench.-There can be

no doubt that a Full Bench can overrule a Division Bench, and

that a Full Bench must consist of three or more Judges; but it

would seem anomalous to hold that a later Full Bench can

Overrule an earlier Full Bench, merely because the later

bench consists of more Judges than the earlier. If that were

the rule, it would mean that a Bench of seven Judges, by a

majority of four to three, could overrule a unanimous

decision of a Bench of six Judges, though all the Judges were

of co-ordinate jurisdiction.”

.......................... It was the anomaly of this situation which

prompted Beaumont, C.J., to make the aforesaid observations. This

anomaly is, however, inherent in the principle of superiority of

numerical strength and should not stand in the way of acceptance

of that principle in its application to Full Benches of the High Court.

The same anomaly also arises when four or five Judges of the High

Court, each sitting singly take one view of the law on a particular

point while a Division Bench consisting of two Judges takes a

different view or when three or four Division Benches, each

consisting of two Judges, take one view on a point of law while a

Full Bench of three Judges takes a different view. The opinion of two

Judges prevails over the opinion of four or five Judges in the former

case while in the latter case the opinion of three Judges prevails

over the opinion of eight or ten Judges, though all the Judges are of

co-ordinate jurisdiction. This anomaly cannot, therefore, be a valid

argument against the application of the principle of superiority of

numerical strength amongst Full Benches of the High Court. The

principle of superiority of numerical strength is a principle which, as

I have already pointed out above, imparts flexibility to the law and

provides an easy machinery within the framework of the High Court

itself for correction of erroneous decisions which would otherwise

stand inviolate, immune from challenge except on appeal to the

Supreme Court.” (Emphasis Supplied)

F. It may be mentioned that a Constitution Bench of this Court in a judgment

reported as Central Board of Dawoodi Bohra Community and Anr. v.

State of Maharashtra and Anr.

quoted from the earlier Constitution Bench

19 (2005) 2 SCC 673

judgment in Union of India and Anr. v. Raghubir Singh (Dead) By Lrs.

Etc.

20and held as under:

“10. Reference was also made to the doctrine of stare decisis. His

Lordship observed by referring to Sher Singh v. State of

Punjab [(1983) 2 SCC 344 : 1983 SCC (Cri) 461] that although the

Court sits in divisions of two and three Judges for the sake of

convenience but it would be inappropriate if a Division Bench of

two Judges starts overruling the decisions of Division Benches of

three. To do so would be detrimental not only to the rule of

discipline and the doctrine of binding precedents but it will also

lead to inconsistency in decisions on points of law; consistency and

certainty in the development of law and its contemporary status —

both would be immediate casualty.

xxx xxx

12. Having carefully considered the submissions made by the

learned Senior Counsel for the parties and having examined the

law laid down by the Constitution Benches in the abovesaid

decisions, we would like to sum up the legal position in the

following terms:

(1) The law laid down by this Court in a decision delivered by a

Bench of larger strength is binding on any subsequent Bench of

lesser or coequal strength.

(2) A Bench of lesser quorum cannot disagree or dissent from the

view of the law taken by a Bench of larger quorum. In case of doubt

all that the Bench of lesser quorum can do is to invite the attention

of the Chief Justice and request for the matter being placed for

hearing before a Bench of larger quorum than the Bench whose

decision has come up for consideration. It will be open only for a

Bench of coequal strength to express an opinion doubting the

correctness of the view taken by the earlier Bench of coequal

strength, whereupon the matter may be placed for hearing before

a Bench consisting of a quorum larger than the one which

pronounced the decision laying down the law the correctness of

which is doubted.

20 (1989) 2 SCC 754

(3)...........................”

G. The conclusion (1) is that a decision delivered by a Bench of largest strength is

binding on any subsequent Bench of lesser or coequal strength. It is the

strength of the Bench and not number of Judges who have taken a particular

view which is said to be relevant. However, conclusion (2) makes it absolutely

clear that a Bench of lesser quorum cannot disagree or dissent from the view of

law taken by a Bench of larger quorum. Quorum means the bench strength

which was hearing the matter.

H. Thus, it has been rightly concluded that the numerical strength of the Judges

taking a particular view is not relevant, but the Bench strength is determinative

of the binding nature of the Judgment.

.............................................J.

(HEMANT GUPTA)

NEW DELHI;

SEPTEMBER 19, 2022.

संविधान की प्रमुख विशेषताओं का उल्लेख | Characteristics of the Constitution of India

- March 04, 2020

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M/S TRIMURTHI FRAGRANCES (P) LTD. THROUGH ITS DIRECTOR SHRI PRADEEP KUMAR AGRAWAL VERSUS GOVERNMENT OF N.C.T. OF DELHI THROUGH ITS PRINCIPAL SECRETARY (FINANCE) & ORS.

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