SWATANTER KUMAR, C. J. :- Law, despite its source, is essentially mutable and has to change with the need of the society to ensure that the legislative intent is achieved. It may not be essential to construe statutory provisions strictly or apply the existing judicial dictums so strictly and mechanically that it overreaches the concept of stare decisis. The law of precedents is an accepted precept of administration of justice. Judicial discipline requires precedents to be followed but without transgressing its own limitations. Precedents are described as "Authorities to follow in determination in Courts of Justice. Precedents have always been greatly regarded by the Sages of the Law. The precedents of the Courts are said to be the laws of the Courts and the Courts will not reverse a judgment contrary to many precedents" (Law Lexicon - 1997 Edition). To the rule of precedents there are exceptions founding on the doctrine of ratio decidendi, sub-silentio and stare decisis. For a precedent to be binding, it cannot be without judicial discussion on arguments. An extra judicial opinion given out of Court or without context is not a good precedent. To be a precedent, it has to be an adjudged case or decision of a Court of competent jurisdiction, considered as furnishing an example or authority for an identical or similar case afterward arising or a similar question of law. It is the ratio understood in its correct perspective that is made applicable to a subsequent case on the strength of a binding precedent. The ratio is variously defined to be the relation between two magnitudes of the same kind in terms of quality and quantity. Ratio decidendi is the reason for deciding as reasoning is the soul of decision making process. It is formulation of an opinion by the Judge which is necessary in the facts of the case for determination of the controversy. In the case of C. D. Kamdar vs. State of Orissa, (1985) Tax L.R. 2497, expressing its views in relation to the binding precedents, the Court held as under :-

"Mr. R. Mohanty, the learned counsel for some of the petitioners submitted that the power of the Board under section 90(7) of the Act is to levy fees simpliciter. He cited the case reported in (1968) 34 Cut LT 122 (SC), Laxmidhar Sahu vs. Supdt. of Excise Berhampur in support of the contention. Reading the entire judgment, the contention as raised by Mr. Mohanty, is not spelt out. A Decision is an authority only for what it actually decided and not for what may logically follow from it. Every judgment must be read as applicable to the particular factors proved, or assumed to be proved, since the generality of the expressions, which may be found there, are not intended to be expositions of the whole law but governed or qualified by particular facts of the case in which such expressions are to be found. See AIR ]983 SC 1246, Sreenivasa General Traders etc. vs. State of Andhra Pradesh. The case of Laxmikanta Sahu (supra) was considered by the Supreme Court in AIR 1975 SC 1121 : 1975 Tax LR 1569, Harsankar vs. Dy. Excise and Taxation Company. In para 61 at page 1134 it has been observed that in that case it was expressly contended on behalf of the State of Orissa that the levy was a tax and not a fee. The decision being based on a concession did not involve the determination of the point whether the fee levied under section 90(7) of the Act is a fee simpliciter".

2. We have already indicated that the law in its due course changes its form and application but existence of reasoning with the changing law is a mandatory requirement of judicial process. Ratio est legis anima, mutata legis ratione, mutatur et lex is a maxim for the proposition that law must state reasons and reasons should have a reasonable nexus to the facts of the case. It is said that reason and authority are the two brightest lights of the world and thus it follows that providing of correct reasoning for every decision is the basic feature of rule of law.

3. In