Doctrine of merger cannot bar independent adjudication where purchase tax leviability on exempted units remains open.

The Supreme Court having left open the question whether purchase tax could be levied on paddy purchases by exempted units, earlier appellate and writ decisions on that issue did not continue as binding precedent. The doctrine of merger could not be used to treat those prior orders as conclusive on the open question. The Tribunal was therefore required to decide the leviability of purchase tax independently on its own merits rather than rely on the earlier decisions. Its failure to do so was held to be an error in law, and the order was unsustainable.

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Issues: Whether the Tribunal was justified in treating the earlier appellate and writ decisions as binding and in refusing to decide independently the leviability of purchase tax on exempted units after the Supreme Court had left that question open.

Analysis: The Supreme Court had answered only the question relating to recovery of the purchase-tax element included in the procurement price and had expressly kept open the separate question whether purchase tax could be levied on the purchase of paddy in the case of exempted units. In that situation, the earlier Tribunal and High Court decisions on the open question did not survive as a binding precedent for deciding the present dispute, and the doctrine of merger could not be used to avoid an independent adjudication on the issue. The Tribunal was therefore required to examine the matter on its own merits instead of resting its decision on the assumption that the earlier orders continued to govern the field.

Conclusion: The Tribunal erred in law in relying on the doctrine of merger and in failing to undertake an independent decision on leviability of purchase tax; the order was unsustainable.

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