Explore the Supreme Court of India’s landmark judgment in Trimurthi Fragrances vs Govt. of NCT Delhi, which clarified whether the strength of the bench or number of judges in the majority determines a judgment’s binding authority. Also understand its impact on the taxation of pan masala and gutkha under the ADE Act.

Introduction: Understanding Judicial Precedent in India

In Indian constitutional law, the debate over what gives a judgment its binding value—bench strength or majority opinion—has persisted for decades. The Supreme Court‘s 2022 decision in M/S Trimurthi Fragrances (P) Ltd. vs Govt. of NCT of Delhi provided critical clarity. Besides resolving a tax dispute involving pan masala and gutkha, it settled a crucial question of legal precedent.

Background of the Case

Parties Involved

• Appellant: M/S Trimurthi Fragrances (P) Ltd., represented by its Director Shri Pradeep Kumar Agrawal

• Respondent: Government of NCT of Delhi, through its Principal Secretary (Finance)

Date of Judgment

• September 19, 2022

Citation

• 2022 INSC 975

Bench Composition

• Justice Indira Banerjee

• Justice Hemant Gupta

• Justice Surya Kant

• Justice M.M. Sundresh

• Justice Sudhanshu Dhulia

Facts of the Case

The case addressed whether pan masala and gutkha, already taxed under the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (ADE Act), could also be subject to state sales tax.

On March 31, 2000, the Lieutenant Governor of Delhi issued a notification making these products taxable under state law. This move sparked legal challenges, raising concerns about dual taxation and federal powers.

Legal Conflict: Kothari Products vs Agra Belting Works

The dispute centered on conflicting rulings:

• Kothari Products Ltd. v. State of Andhra Pradesh – Held that goods taxed under the ADE Act were exempt from additional state sales tax.

• Commissioner of Sales Tax, U.P. v. Agra Belting Works – Allowed state taxation under specific conditions.

Here, Kothari was a unanimous (3:0) decision, while Agra Belting Works had a 2:1 majority, sparking a deeper legal debate: Does unanimity trump bench strength?

Key Issues Considered by the Supreme Court

1. Can States Tax Pan Masala and Gutkha Despite ADE Act Coverage?

2. Which Judgment Holds More Weight: A 3:0 Unanimous Verdict or a 2:1 Majority?

Supreme Court’s Judgment

The five-judge Constitution Bench unanimously ruled:

No Direct Conflict Between Kothari and Agra Belting

The Court clarified that the cases addressed distinct issues:

• Kothari Products involved central taxation under the ADE Act.

• Agra Belting Works involved the mechanics of sales tax exemptions and later notifications.

Bench Strength Determines Binding Precedent

Citing Dr. Jaishri Laxmanrao Patil v. The Chief Minister, the Court ruled that the size of the bench, not the number of agreeing judges, defines the precedential value of a decision.

As per Article 145(5) of the Constitution of India, the decision of the majority of judges on a bench constitutes the judgment of the Court.

Concurring Opinion by Justice Hemant Gupta

Justice Gupta, in his concurring opinion, reaffirmed that a smaller bench cannot override the decision of a larger bench, regardless of how unanimous the smaller bench may be.

Conclusion: Impact on Indian Tax Law and Legal Precedents

The Supreme Court’s decision in Trimurthi Fragrances vs. Govt. of NCT Delhi reinforced these key legal principles:

• States can impose sales tax on items like pan masala and gutkha, even if central excise duty applies.

• A judgment by a larger bench always prevails over one by a smaller bench, irrespective of vote count.

This case has significant implications for both taxation law in India and the interpretation of binding precedent within the judicial system.