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Judgment
R. C. Gandhi, J.—By virtue of the reference made by the Division Bench, writ peti- lions were taken up for hearing. Before touching the
merits of the case, at the very outset, learned Advocate General representing the respondents, contended to canvass the maintainability of the
reference made by the Division Bench of this Court for hearing and deciding the petitions by a Larger Bench, in presence of the law laid down by a
Full Bench of this Court in Girdhari Lal Anand Saraf v. State of J. and K. AIR 1969 J&K 113 wherein the legality and constitutional validity of
Section 3 of the Levy of Tools Act, Samvat, 1995 (hereinafter to be referred to,as the Act) has been held to be intra vires, which is also the
subject-matter of challenge in the present writ petitions.
The matrix of the case is that the petitioners in this batch of petitions, have invoked the extraordinary writ jurisdiction of this Court under Article
226 of the Constitution of India projecting an issue with regard to the legality and constitutional validity of Section 3 of the Act and SROs 348 and
349 of 1982. Before the issuance of impugned SRO 348 of 1982, toll tax was levied on the goods at the rate of 6 paise per kg. By the issuance of
SRO 348 of 1982 dated 20-8-1982, additional toll tax at the rate of 00.60 paise per kg. and SRO 349 of 1982 dated 20-8-1982 sales tax at the
rate of 8% per kg. respectively on dry fruits including almonds walnuts and walnut kernals, to be exported out of the State, has been imposed. The
petitioners also seek to quash SRO 436 of 1983 dated 23-8-1983 whereby the State has withdrawn exemption from payment of toll tax by
various Small Scale Industrial Units (for short, SSIs) granted under SRO 484 of 1977.
The petitioners contended before the writ Court that the impugned SROs are discriminatory and violative of Articles 14, 19, 265, 286(1) and
301 of the Constitution. The learned single Judge formulated, five points for consideration and in view of the law laid down in AIR 1969 J&K 113
holding the levy of tax u/s 3 of the Act intra vires of Articles 301 and 304 of the Constitution, felt it necessary for reconsideration of the law laid
down by the Full Bench, by a Larger Bench to determine the controversy by an authoritative pronouncement. The learned single Judge referred the
writ petitions, by an order dated 6-2-1987, for consideration of a Larger Bench.
Pursuant to the said reference, Division Bench proceeded to hear the petitions. Upon hearing the learned counsel for the parties, the Division
Bench was persuaded to form a view that prima facie there is merit in the contention of the writ petitioners. The Division Bench in view of the law
laid down by the Full Bench of this Court, similarly, felt the necessity in the interest of justice, to refer the petitions to be heard and decided by a
Larger Bench because decision in Girdhari Lal Anand's case supra had been delivered by a Full Bench consisting of three learned Judges. This is
how this reference has come up before the Full Bench.
While the matter was taken up, as pointed out earlier, a controversy has been generated by learned counsel for the respondents with regard to
the maintainability of the reference made by the learned single Judge as well as by the Division Bench for reconsideration of the Full Bench
judgment, on the plea that the law laid down by the Full Bench of this Court, having its binding character, the learned single Judge and the Divi-sipn
Bench ought to have followed the law laid down by the Full Bench and maintained the judicial propriety and discipline. The. plea of respondents
has been contested by the writ petitioners.
We have heard learned counsel for the parties on the issue of maintainability of the reference and considered the record of the cases.
Learned counsel representing the petitioners in support of the reference have placed reliance and on the force of the judgments reported in
Mahadeolal Kanodia Vs. The Administrator-general of West Bengal, : Jaisri Sahu Vs. Rajdewan Dubey and Others, : The State of Gujarat Vs.
Ramprakash P. Puri and Others, and Sundarjas Kanyalal Bhathija and others Vs. The Collector, Thane, Maharashtra and others, want the Court
to maintain the reference in affirmative.
In Mahadeolal Kanodia Vs. The Administrator-general of West Bengal, , the Apex Court pronounced that:
A Division Bench should not take upon itself to say that an earlier Division Bench ruling of the same High Court cited before it, is wrong, but
should follow the usual procedure in case of difference of opinion with an earlier decision, of referring the question to a Larger Bench. Judicial
decorum, no less than legal propriety forms the basis of judicial procedure. Similarly, a single Judge differing from a decision of another single
Judge in a previous case on a question of law should refer the case to a Larger Bench instead of deciding the case in accordance with his own
view."" Simitar view is taken in case titled Jaisri Sahu Vs. Rajdewan Dubey and Others, , holding that at page 87 of AIR:
When a Bench of the High Court gives a decision on a question of law, it should in general be followed by other Benches unless they have reasons
to different from it, in which case the proper course to adopt would be to refer the question for the decision of a Full Bench. Where two conflicting
decisions are placed before a later Bench, the better course for the latter is to refer the matter to a Full Bench without taking upon itself to decide
whether it should follow the one Bench decision or the other.
In another judgment cited at the bar in support of the contention on the maintainability of the reference is : The State of Gujarat Vs. Ramprakash
P. Puri and Others, wherein the Supreme Court has held :
It is improper for a Division Bench to bypass a Full Bench decision, Judicial decorum required a reference to a fuller Bench; an earlier opinion
expressed by the Supreme Court in Mahadeolal Kanodia Vs. The Administrator-general of West Bengal, was cited ""If one thing is more necessary
in law than any other thing, it is the quality of certainty. That quality would totally disappear if Judge of coordinate jurisdiction in a High Court start
over-ruling one another's decision."" In Union of India v. Paras Laminated (P) Ltd. 1991 (80) STC 273 the Bench of two Members of the Tribunal
while determining the matter, doubted the correctness of the earlier decision of Bench of three members of the 1986 (8) ECR 59 and directed that
the case be placed before the President of the Tribunal for referring it to a larger bench. The President referred the case to a larger bench of five
members. The High Court struck down the order of the Bench of five members of the tribunal, observing that the Bench of two members ought to
have followed the earlier decision of the larger bench of three members and reference of the case to still larger bench was contrary to judicial
precedent and judicial discipline. The Supreme Court while dealing with this proposition held : ""It is true that a Bench of two members must not
lightly disregarded the decision of another bench of the same Tribunal on an identical ques tion. This is particularly true when the earlier decision is
rendered by a larger bench. The ra tionale of this rule is the need for continuity, certainty and predictability in the administration of justice. Persons
affected by decisions of tribu nals of Courts have a right to expect that those exercising judicial functions will follow the rea son or ground of the
judicial decision in the earlier cases on identical matters. Classification of particular goods adopted in earlier decisions must not be lightly
disregarded in subsequent decisions, lest such judicial inconsistency should shake public confidence in the administration of justice. It is, however,
equally true that it is vital to the administration of justice that those exercis ing judicial power must have the necessary free dom to doubt the
correctness of an earlier deci sion if and when subsequent proceedings bring to light what is perceived by them as an erroneous decision in the
earlier case. In such circum stances, it is but natural and reasonable and indeed efficacious that the case is referred to a larger bench. This is what
was done by the Bench of two members who in their reasoned order pointed out what they perceived to be an error of law in the earlier decision
and stated the points for the President to make a reference to a larger Bench.
In a similar proposition, the Supreme Court in Sundarjas Kanyalal Bhathija and others Vs. The Collector, Thane, Maharashtra and others, , held at
page 1898 of AIR :
The attention of the High Court in the present case was drawn to the decision in Chikalthane case. Counsel for the State and interveners seemed
to have argued that the present case really fell fairly and squarely within that was said there. They were indeed on terra firma since the decision in
Chikalthane case was a clear authority against every contention raised by the petitioner. Faced with this predicament, counsel for the petitioners
urged before the High Court that their case should be referred to a larger Bench to reconsider the decision in Chikalthane case. But learned Judges
(Dharmadhikari and Kantharia, JJ.) did not heed to that submission. They neither referred the case to a larger Bench nor followed the view taken
in the Chikalthane case ......,......
The Supreme Court on consideration of this aspect of the case observed, in paras 17 to 19 of the judgment, as under :
It would be difficult for us to appreciate the judgment of the High Court. One must remember that pursuit of the law, however, glamourous it is,
has its own limitation on the Bench. In a multi-Judge Court, the Judge are bound by precedents and procedure. They could use their discretion
only when there is no declared principle to be found, no rule and no authority. The judicial decorum and legal property demand that where a
learned single Judge or a Division Bench does not agree with the decision of Bench of coordinate jurisdiction, the matter shall be referred to larger
Bench. It is a subversion of judicial process not to follow this procedure.
Depreciating this kind of tendency of some Judge, Das Gupta, J., in Mahadeolal Kanodia Vs. The Administrator-general of West Bengal,
We have noticed with some regret that when the earlier decision of two Judges of the same High Court in Deorajin Debi and Another Vs.
Satyadhyan Ghosal and Others, was cited before the learned Judges who heard the present appeal they took on themselves to say that the
previous decision was wrong, instead of following the usual procedure in case of difference of opinion with an earlier decision, of referring no less
than legal propriety form the basis of judicial procedure. If one thing is more necessary in law than any other thing, it is the quality of certainty. That
quality would totally disappear if Judges of co-ordinates jurisdiction in a High Court start overruling one another's decision.
The attitude of the Chief Justice, Gajendragadkar, in Shri Bhagwan and Another Vs. Ram Chand and Another, was not quite different (at p.
1773) :
It is hardly necessary to emphasize that considerations of judicial propriety and decorum require that if a learned single Judge hearing a matter is
inclined to take the view that the earlier decisions of the High Court, whether of a Division Bench or of a single Judge, need to be reconsidered, he
should not embark upon that enquiry sitting as a single Judge, but should refer the matter to a Division Bench or, in a proper case, place the
relevant papers before the Chief Justice to enable him to constitute a larger Bench to examine the question. That is the proper and traditional way
to deal with such matters and it is founded on health principles of judicial decorum and propriety. It is to be regretted that the learned Judges
departed from the traditional way in the present case and chose to examine the question himself.
Mr. Salaria, learned Advocate General in opposition of the reference has vehemently argued that if the reference is held to be maintainable, it
will give option to the Judges of different Benches either to follow or not to follow the judgment rendered by the Division Benches or the Full
Benches and develop a situation of uncertainty of principles of judicial decorum and judicial property. It will also create judicial indiscipline and its
maintainability in itself is nugatory to law amounting to subversion of judicial process. In order to bring home his point he has relied upon (1998)
SCC 290 Commissioner of Income Tax v. Triloknath Mehrotra) wherein it is held :
We do not find any conflict in the law laid down in the case of R.M. Chidambaran Pillai with the law laid down in the earlier two cases. The
decision in the case of Rajkumar Singh Hukam Chandji was rendered by a Bench of three Judges. Therefore, even assuming that there was conflict
between that decision and the decision rendered in Chidambraram Pillai case which was rendered by a Bench of two Judges, the decision of the
larger Bench will prevail.
He has also relied upon State of Andhra Pradesh Vs. v.C. Subbarayudu and Others, which deals with the proposition: where two appeals were
filed against a judgment of the single Bench by different parties. The appeal came up for consideration before differ,-, ent benches. One bench
dismissed the appeal, the other bench while considering the other appeal, taking note of the Supreme Court decision, allowed the appeal on the
ground that the matter is beyond the jurisdiction of the High Court, therefore, the writ petition adjudicated by the learned single Judge was not
maintainable. The Supreme Court held at page 853 of AIR :
........... We would, however, only like to say that the second Division Bench if it was of the opinion that it had to take different view than that
taken by the first Division Bench the matter should as a matter of propriety have been referred to a larger Bench. It is certainly a question of self-
discipline which the Court should observe.
The contention of Mr. Salaria that the learned single Judge and the Division Bench are bound to follow the judgment delivered by the Full
Bench of this Court in Girdhari Lal Anand's case (supra) otherwise it will render situation of an option either to follow or not to follow the judgment
of the larger Bench causing judicial indiscipline and subversion of judicial process, though is much appealing, yet, while the mistake committed in
the earlier decision is brought to the notice of the Court seized of the matter and if the Court is of the view that the earlier decision rendered needs
reconsideration, it is the duty of the Court to correct the law as earlier as possible to determine it with reasons which carry conviction provisions
and orders to make it more effective otherwise it will create a situation of confusion for the bar and the Courts to chose between conflicting
opinions. The apprehension of Mr. Salaria with regard to judicial indiscipline and option with the Judges, is also misplaced. If during the hearing of
the matter, the Court prima facie finds and is not convinced to follow the judgment of the co-ordinate bench or the larger Bench, the Court need
not half-heartedly and mutely follow it unless convinced that the law laid down in the judgment of the larger bench is the correct law and its
application to the case in had shall do justice to the parties. If at this stage the Judge takes a different view ignoring the judgment of the larger bench
with whatever reasoning will, no doubt, be unhealthy for maintaining judicial discipline and decorum. But, where the matter is referred for decision
of a larger bench, it cannot be said that the Judge has exceeded the limits and given rise to a cause of apprehension of judicial indiscipline or it can
develop a practice of option.
Considering the facts of the case in hand, the contentions raised for and against the maintainability of the reference and the law cited at the bar,
we need not to tarry much for determination of the issue in hand for the reason that the law laid down by the Supreme Court in 1991 (80) STC
263 and Sundarjas Kanyalal Bhathija and others Vs. The Collector, Thane, Maharashtra and others, that if a single Bench of coordinate
jurisdiction is of the opinion that the earlier decision rendered by the Bench of coordinate jurisdiction or by a larger Bench re- quires
reconsideration, though the decision rendered by the larger Bench is required to. be followed for maintaining the judicial discipline and quality of
certainty, the best course is to refer to the matter either to a Division Bench or to a larger Bench, is applicable to this case.
Applying this text of law pronounced by the Supreme Court to the present case it can be said with no hesitation that the learned single Judge
while examining the controversy in the writ petitions vis-a-vis the law laid down by the Full Bench of this Court in Girdhari Lal Anand's case, has
not exceeded his jurisdiction or limita tion in referring the matter for constitution of a larger Bench and subsequently the Division Bench also
committed no mistake of judicial propriety or judicial discipline, having noticed that the judgment of the Full Bench needs reconsidera tion, by
referring the matter for reconsideration by a larger Bench.
For the aforesaid reasons the references made by the Division Bench under the circum stances is held maintainable. The reference be posted
for hearing.