Court caseAIR 1955 SC 661

Article 141 makes the law declared by the Supreme Court binding on all courts in India, but the Supreme Court is not itself bound by its earlier decisions and may reconsider and overrule them when satisfied that they are erroneous and that the public interest requires it. State of Bombay v. United Motors (1953) was overruled.

The Bengal Immunity Company, a Calcutta manufacturer of sera and vaccines, sold goods to buyers in Bihar by despatching them from Bengal. Bihar sought to levy sales tax on these inter-State sales, relying on the Supreme Court's own recent decision in State of Bombay v. United Motors (1953), which had read the Explanation to Article 286(1)(a) as permitting the State of delivery to tax such sales. The company petitioned for relief, and the question arose whether a seven-judge bench could and should depart from a decision given by five judges only two years earlier.

By a majority of four to three the Court overruled United Motors and held that Bihar could not tax the inter-State sales. Das Actg CJ held that there is nothing in the Constitution which prevents the Supreme Court from departing from a previous decision if it is convinced of its error and of its baneful effect on the general interests of the public; Article 141 binds "all courts", which does not include the Supreme Court itself. The Court should not lightly dissent from its own decisions, but where the earlier decision concerns the Constitution, affects the public at large and is plainly erroneous, reconsideration is a duty. The majority applied the mischief rule of Heydon's case to Article 286, reading it in the light of the evil of multiple taxation of the same sale that it was meant to suppress.