In a recent ruling a five-judge constitutional bench led by Justice Indira Banerjee refused to deliver an opinion relating to the controversial sale tax levy on the product “pan masala” stating that a unanimous Judgment did not have more precedential value than a Judgment delivered by a Bench of the same strength where one or more Judges dissented.
In a judgment on September 19th, 2022, the bench comprising Justice Indira Banerjee, Justice Surya Kant, Justice M.M. Sundresh and Justice Sudhanshu Dhulia observed that “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 petitioner, M/s Trimurthi Fragrances (P) Ltd contended that the Delhi Lieutenant Governor incorrectly issued a notification under the Delhi Sales Tax Act, 1975, imposing sales tax on ‘Pan Masala and Gutka’ when Tobacco products were exempt from sales tax under the same Act.
In the 2017 Judgment referring the case to a Constitution Bench, Justices R.F. Nariman and S.K. Kaul stated there was a ‘head-on conflict’ between the SC’s decisions in Kothari Products Ltd. v Govt of Andhra Pradesh (2000) and Commissioner, Sales Tax, Uttar Pradesh v Agra Belting Works (1987).
In Kothari Products, the SC held that Pan Masala and Gutka should be exempt from sales tax as they were Tobacco products. In Agra Belting Works, the Court held that if there is a conflict between an exemption and sales tax imposed on a good, it would imply that the Legislature intends to withdraw the exemption provided to that good.
“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,” Justice Hemant Gupta said.
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