The doctrine of merger is neither a theory of common law nor a statutorily accepted doctrine. It is a common law doctrine based on the principles of propriety in the hierarchy of the justice system. In the case of the Commissioner for Income Tax, Bombay v. M / s Amritlal Bhogilal and Co., the Income Tax Officer issued an order for the company to register and the company was then assessed as a registered company. An appeal was brought before the Appellate Commissioner on the order of assessment of the assessee. It cannot be claimed that the initial order authorizing the firm's registration was merged into the appeal order of the Appellate Commissioner, the Court held. The subject-matter of the two cases is not the same, the court said that there can be no merger. The opinion of the appeal authority alone, which exists and is operational and capable of compliance. The Court held that, although the order of assessment made by ITO had been appealed against, the order had not been appealable at all and therefore the order of registration had not been merged.

In the State of Madras Vs. Madurai Mills Co. Ltd., the Court held that the doctrine of mergers was not a doctrine of rigid and universal application. The implementation of the doctrine depends on the essence of the appeal or revision order in each case and on the extent of the legislative provisions conferring jurisdiction on the appeal. Their Lordships referred to an earlier decision of this court in U.S. Chopra Vs. The state of Bombay.

A larger Bench of this Court (Seven-Judges) held in S.S. Rathor Vs. State of Madhya Pradesh that the distinction made between courts and tribunals concerning the applicability of the doctrine of a merger has no legal justification. The prohibition for bringing a suit challenging the adverse order would start not from the date of the initial adverse order but on the day when the order of the higher authority disposing of the substantive remedy was issued. The doctrine is neither universal nor unlimited. The essence of jurisdiction exercised by the superior tribunal and the substance of the subject-matter of challenge laid or which could have been laid shall have to be held in view, said the Court. In the case of C.I.T. Vs. Amritlal Bhogilal & Co. (supra), and this court's several other decisions.

Dismissal at the stage of special leave – without reasons – no res judicata, no merger:

In Workmen of Cochin Port Trust Vs Board of Trustees of the CochinPort Trust and Another 1978(3) SCC 119, a Three-Judges Bench of this Court held that the Supreme Court 's dismissal of a special leave petition by a non-speaking dismissal order in which no reasons have been issued does not constitute res judicata. Madras High Court's decision in The Management of W. India Match Co. Ltd. Vs. Industrial Tribunal. The High Court held that, if it could be considered a right at all, the right to apply for leave to appeal to the Supreme Court could not be equated with a right to appeal under Article 136.