TaxTMI 
TaxTMI 
2022 (9) TMI 895
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....riyanka Prakash, Adv. Mrs. Beena Prakash, Adv. Mr. Dhruv Agrawal, Sr. Adv. Mr. Nalin Talwar, Adv. Mr. Praveen Kumar, AOR Mr. Nischit Agrawal, Adv. Ms. Sunaina Kumar, Adv. Ms. Kanishka Mittal, Adv. Mr. Madhav Bhatia, Adv. Mr. Shreshth Arya, Adv. Mr. Aditya Pandey, Adv. Ms. Bharti Tyagi, AOR Mr. Rahul Arya, Adv. Mr. Pawanshree Agrawal, AOR For the Respondent : Mr. Mukesh Kumar Maroria, AOR Mr. K. Radhakrishnan, Sr. Adv. Mr. T. S. Sabarish, AOR Mr. Vishnu Unnikrishnan, Adv. Ms. Shivani Jena, Adv. Mr. S. Shankar, Adv. Mr. Naman Dwivedi, Adv. Dr. V. Dappen Shetty, Sr. Adv. Mr. Hitesh Kumar Sharma, Adv. Mr. K.N.S. Pandian, Adv. Ms. Kavita Muthusamy, Adv. Ms. Kiren K. Pandi Selvy, Adv. Mr. R. Nedumaran, AOR Mr. M. Yogesh Kanna, AOR Mr. Bhakti Vardhan Singh, AOR Mr. N. Venkatraman, ASG Mr. Arijit Prasad, Adv. Mr. Chandan Kumar, Adv. Mr. Gurmeet Singh Makker, AOR JUDGMENT 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 S....
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.... 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 s....
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....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....
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.... Sales Tax Act, 1956." 6. In Mahalakshmi Oil Mills v. State of A.P. (1989) 1 SCC 164, 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 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.P (2005) 2 SCC 515., this Court held: " 70. So even if tobacco is an article of luxury, a tax on its supply is within the exclusive competence ....
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....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 c....
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.... 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. 16. In State of Bihar and Others v. Krishna Kumar Kabra and Another (1997) 9 SCC 763, 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....
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....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 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") - ....
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....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. [INDIRA BANERJEE] ............................................... J. [SURYA KANT] ............................................... J. [M.M. SUNDRESH] ............................................... J. [SUDHANSHU DHULIA] ............................................... J JUDGMENT 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 m....
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....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 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....
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....his 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 th....