2. The cardinal rule of ‘Stare Decisis’ requires
standing by the decided cases, upholding precedents and maintaining former
adjudication. The doctrine of binding precedence ensures stability and
uniformity in judicial interpretation and keeps the scale of justice even and
steady without being liable to waiver with every new judge’s opinion. The
question, however, arises as to whether all declarations or conclusions
constitute binding precedents. A decision which is not express and is not
founded on reasons, nor does it proceed on consideration of issues, cannot be
deemed to be a law or authority of a general nature binding as a precedent. Such
a decision is sub-silentio and is deprived of its value as precedent. As
observed by R. M. Sahai J in State of U.P. and Anr. v. M/s. Synthetics and
Chemicals Ltd. and Anr., (1992) 87 STC 289 (SC), “Restraint in dissenting or
overruling is for sake of stability and uniformity, but rigidity beyond
reasonable limits is inimical to the growth of law. Law declared is not that can
be culled out, but that which is stated as law to be accepted and applied. A
conclusion without reference to relevant provisons of law is weaker than casual
observation. In the absence of any discussion or any argument, the order was
founded on a mistake of fact and, therefore, it could not be held to be law
declared”. Overruling its own earlier decision in Synthetics and Chemicals
Ltd. v. State of U.P. and Anr., (1990) 1 SCC 109, the Court held that the
decision fell in both the exceptions viz. the rule of sub-silentio
and being in per incurrium to the binding authority of the precedents.
3. The issue involved in the case was the competency of the
U.P. State Legislature to impose sales tax on industrial alcohol in view of the
Ethyl Alcohol (Price Control) Order, enabling the Central Government to control
its prices. The High Court, following the earlier 1990 decision of the Supreme
Court (supra) held the levy as beyond the legislative competence. In
appeal, it was argued before the Supreme Court that reference to sales tax in
their earlier decision was accidental, in per incurrium and not arising
from the judgment. The levy of sales tax was not in question at any stage of
arguments, nor was the question considered as it was not in issue and the Court
gave no reason whatsoever for abruptly stating that sales tax was not leviable.
Agreeing with the arguments, the Court in 1992 decision held the earlier
decision as not an authority for the proposition canvassed by the assessee.
4. In Armit Das v. State of Bihar, 2000 AIR SCW 2037,
where the issue involved was the crucial date for determination whether a person
is juvenile as per the Juvenile Justice Act. Various decisions were cited to
canvass the view that the crucial date was commission of offence. Disagreeing
with their value as precedent, the Court observed that “a decision not
expressed, not accompanied by reasons and not proceeding on conscious
consideration of an issue cannot be deemed to be a law declared to have a
binding effect as is contemplated by Article 141. That which has escaped in the
judgment is not ratio decidendi. This is the rule of sub-silentio
in the technical sense when a particular point of law was not consciously
determined”.
5. In CIT v. Kanji Shivji & Co., (242 ITR 0124) where
there were conflicting decisions of the Supreme Court itself as to the
applicability of Explanation to S. 40(b) — whether prospective or retrospective
— the Court overruled its own decision in Rasik Lal & Co. v. CIT, (229
ITR 458), which held the explanation as prospective on the ground that in that
case, the explanation was not really an issue. In Chamber of Income-Tax
Consultants v. Central Board of Direct Taxes, (1994) 209 ITR 660, the Bombay
High Court considered the observations of the Supreme Court in Associated Cement
Co. (1993) 201 ITR 435 as to the inclusion of professional services within the
ambit of S. 194 C and held the same as not constituting a precedent when read as
a whole.
6. A decision is the outcome of consideration of the facts of
the case in reference to different related and inter-dependent provisions of
law. A declaration as to the meaning of any word or expression in the statue is
possible on reading the provision as a whole. If, for whatever reason, including
the failure on the part of the party to the proceeding to bring it to the
Court’s notice, the decision is made without consideration of another provision
or aspect of the matter which would have had a material influence on the
outcome, the declaration or conclusion becomes sub-silentio. In
Dhrangadhra Municipality v. Dhrangadhra Chemical Works Ltd., [174 ITR 77 (Guj.)],
where the issue concerned maintainability of suit u/s.72 of the Contract Act for
claiming refund of octroi paid under mistake and reliance was placed on the
Supreme Court decisions in Sales Tax Officer v. Kanhaiya Lal, AIR 1959 SC
135 and D. Cawasji & Co. v. State of Mysore, AIR 1975 SC 813 upholding
such maintainability, the Gujarat High Court did not go by those decisions for
the reason that in these cases the Court’s attention was never invited on that
aspect of the matter which concerned any prejudice or legal injury suffered by
the aggrieved party. The Court cannot be assumed to have spoken on it though it
was never canvassed before it. “Precedents sub-silentio and without
arguments are of no moment”, observed the Court in Divisional Controller
KSRTC v. Mahadeva Shetty, 7 SCC (2003) 199.
7. Courts may sometimes conclusively decide in favour or
against a party because of some legal point which it pronounces upon, ignoring
another point which too should have been decided in favour or against for
arriving at the conclusion reached. In such a case, that point passes sub-silentio
and the decision cannot be an authority so far as the point ignored is
concerned.
8. It is now well settled that a decision is not deprived of
the authority of precedent merely because it was badly argued or inadequately
reasoned. While total absence of argument and consideration vitiates the
precedent, inadequate arguments or consideration do not, unless they miss
something vital to the total outcome in a decision.
