Binding Judgement of Lager Bench / Majority decision - strength of the Bench - Levy of sales tax - Classification of goods - 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, or not - taxability 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?
As per INDIRA BANERJEE J.
HELD THAT:- 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 KOTHARI PRODUCTS LTD. VERSUS GOVERNMENT OF ANDHRA PRADESH [2000 (1) TMI 823 - SUPREME COURT], 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”.
In COMMISSIONER OF SALES TAX, UP. VERSUS AGRA BELTING WORKS, AGRA [1987 (4) TMI 82 - SUPREME COURT], the majority of the threeJudge Bench of this Court, by ratio of 2:1, inter alia, held 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.
There is no conflict between the Kothari Products line of cases and the Agra Belting line of cases. The Kothari Products 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 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 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.
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.
The conclusion 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.
As per HEMANT GUPTA, J.
A reference was made to insertion of Article 144A in the Constitution by the 42nd Amendment with effect from 01.02.1977 - 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.
The conclusion 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.
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.