RAMSARAN DAS AND BROS. versus COMMERCIAL TAX OFFICER, CALCUTTA AND OTHERS

276 SUPREME OOURT REPORTS [1962] SUPP. RAMSARAN DAS AND BROS. v. COMMERCIAL TAX OFFICER, CALCUTTA AND OTHERS (B. P. Srmu., c. J., J. L. K.u>UR, !If. HIDAYATULLAH, J.C. SRAH and J. R. MuoHOLKAR, JJ.)

Supreme Courl-Practia-Appeal by special leave from or.Ur of a.ausmmt-Maintainability-Statut-Ory remedies t-0 be uhaUBtt4ftrat-Conalilution of India, Art. 136.

In respect of its business as middleman relating main. ly to sales of coal and coke in the course of inter-State trade, the appellant finn was assessed to Central sales tax under s. 8(2) of the Central Sales Tax Act, 1956, by the Commer-cial Tax Officer. The appellant without availing itself of the remedies under the Act, applied for and obtained special leave to appeal under Art. 136 of the Constitution of India direct! y against the order of assessment. When the appeal was taken up for hearing, the question was raised as to whether it should be enterained, when even the facts had not been finally determined by the final fact-finding authority under the Act, nor had the jurisdiction of the High Court been invoked to exercise its powers under the Act.

H.Id, that an assessee is not entitled ordinarily to come

up to the Supreme Court directly against the judgment of the A5'essing Authority and invoke the Court's jurisdiction under Art. 136 of the Constitution without fir.t exhausting the remedies provided by the taxing statutes.

Ma/ladayal Prtmchandra• v. Commucw l Tax Officer, Calcutta, (1959] S. c,. R. 551 and Tht Stall of Bombay v. M/s. RatilalVtdilal, (1961] 2 S. C.R. 367, explamed. Chandi Prasad Clwkhani v. The State of Billar, [ 1962] 2 S. C. R. 276 and Kanhaifl<l[al Lohia v. Commiaaiontr of Inoome-tax, Wut Bengal, [1962]2 S. C.R. 839, followed.

Held, ruthcr, that in the present case, in which th~re were no special circumstances and in which the facts had not yet been finally determined, the appeal must be consider-ed to be incompetent.

CIVIL APPELLATE Jun1SDICTIO!'I: Civil Appeal No, 592 of 1960.

Appeal by special leave from the judgment and order dated June 17, 195!J, of the Commercial Tax Officer, Calcutta, in caso No. 54{c) of

1959-60.

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N. 0. Okatterjee and S. 0. Mazumrlar, for the

appellants.

B. Sen and P. K. Bose, for respondents Nos. 1

and 2.

K. N. Rajagopal Sastri and T. M. Sen, for

respondent No. 3.

1961. October 31. The Judgment of the Court was delivered by

SrNHA, C. J.-This is direct appeal by

special leave granted by this Court on September 7, 1959, against the order, dated June 17, 1959, passed by the first respondent-the Commercial Tax Officer-assessing the appellant to central sales tax amounting to Rs. 42,647 odd, for the period July 30, 1957 to March 31, 1958, under the Central Sales Tax Act (LXXIV of 1956)-which here· inafter will be referred to as the Act. The second respondent is the State of West Bengal, and the third respondent is the Union of India.

In view of the order we propose to make in

this case, it is not necessary to state in any detail the faots and circumstances leading up to this appeal. The 11.ppellant is partnership firm, under the Indian Partnership Act, with its principal place of business at 18, Netaji Subhas Road, Calcutta, within the jurisdiction of the first respondent. The appellant alleges that he carries on business of two kinds, namely, (1) of dealer in coal and coke, and (2) of middleman bringing about sales of coal and ooke between colliery owners and consu· mers. In respect of its business as dealer, the appellant is registered dealer under the Bengal Finance (Sales Tax) Act (Bengal Act VI of 1941). lts second business as middleman relates mainly to sales of coal and coke in the course of inter~ State trade or commerce, and-the tax in question relates to this second branch of its business. The Act came into operation in the State of West Bengal on July 1, 1957, when the appellant

Bamsl!fan Das v. <Amnurcfal Tax 0 jfu:er CalcuJta

Sinh• C. J.

IHI

~INJ

c..-sn.ir ... 0 fKD 1 WJ~~(J Bi""" C. J.

applied for and obta.ined;a certificate of registration under tho Act on July 30. l 57. I1 l\fay 1958, the apriella.nt made its return under the Act in respect or the period aforesaid, showing the turnover as nil. But in spito of its showing cause against the proposed assosRment, the first respondent determin-ed Rs.9,l 7,l 9G as th,, appellant's turnover in respect o( tho periorl aforesaid and assessed central sales tax thereon at Rs. 42,6! i·ll2nl'. under s. 8(2) or the Act, and issued Dcm11.11d Notice. The appellant moved this Court and obtain~d tho special leavo to appeal from the ord!'r of ! he first respondent mak-ing assessment, and later demand on the basis of the it~srssment.

From th<' statement of fads ~iven above, it is clear that the appcllimt did uot exhaust all his remedies under the Act itself, and came directly to this Court as if the Order of Assessment passad by the first respondent was final. The question, therefore, arises wethcr this Courl should entertain the appeal. when enn the facts have not been finally deter mined by the firn1l fact-finding autho-rity under the Act, nor has the jurisdiction of the High Court beeu invoked to exercise its power under tho Act. But Mr. Chatterjee, on behalf of the appellant, has contended in the first instance that the powers of this Court arc wide enough to enable him to approach this Court direct, when according to him, there had been an assessment of tax without the authority of law. There is no doubt that the powers of this Court under Art. 136 of tho Constitution arc as wi1le as they could be, because, unlike tho preceding articles of the Constitution, there is no limitation that the Judg-ment, decree or order should he final in the sense that the appellant in this Court has exhausted all the remedies provided by law before invoking the jurisdiction of thi~ Court to grant "special leave to appeal from any judgment, decree determination sentence or order in any case or matter passod or

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made by any Court or Tribunal in the territory of India.'' In spite of the wide amplitude of the jurisdiction of this Conrt to entertain appeals by special leave, this Coul't has imposed certain limi-tatiODB on its own powers for very good reasons, and has refused ordinarily to entertain such appeals when the litigant has not availed himself of the ordinary remedies available to him at law. Rut Mr. Chatterjee, on behalf of the appellant, invited onr attention to the decision of this Court in Mahadayal Premchandra v. Commercial Tax Officer, OalcuUa (1) in which this Court interfered with the order of assessment passed by the Commercial Tax Officer of Calcutta, and this Court had been moved by way of special leave to appeal against the original ·order of the Taxing Officer. It is claimed on behalf of the appellant that that decision completely covers the points in controversy in the present case also. It. is contended that that was also case, like the present one of commission agents who had been charged sales tax. There are several reasons why the authority ofth'!.t decision cannot ·be invoked in favour of the appellant on the preliminary question whether this Court should at all entertain the appeal. In that case, in the reported decision, of thiK Court, no such question, aa we have to determine, had been raised, Appar-ently, cuunsel for both the parties were anxious to have the fin't.l determination of the controversy by this Court. Secondly, there were special circum-stances in that case, which are not present in the instant case. The most outstanding feature of that caae was, as pointed out by this Court, that the .Assessing Authority had not exercised its own judgment in the matter of tho assessment in ques-tion. The Assessing Authority had, contrary to its own judgment, taken instructions from the ABSistant Commissioner and followed those direc-tions. This Court had also pointed out that l;lVen (I) [1959] S. C.R. 551.

Ram5aran Das v. Commeuir.l Tax OJ}ictr, "Ca/c'ltfa Sinha C. J,

1961 Ham,nrnn Das •• G"mmu,iaJ 1·a.t 0 ff ct"' c.Jeulta Sinha C. J,

though the Assessing Authority was satisfied on the materials placed by the assessee that he waa not liable to pay sales tax, he carried out tho directions of superior officer. This Court further pointed out that there had been complete failure of justice on account of tho fact that the assessee had been given no opportunity to meet the points made by the Assistant Commissioner, and the assessment order was made behind his back. Tho Court was led to make the following very significant obser-vations:

"The procedure adopted was, to say that

least, unfair and was calculated to undermine the confidence of the public in tho impartial and fair administration of the sales-tax Department concerned. We would have, simply on this ground, set a.side the assessment order made by tho first respon-dent and remanded tho matter back to him for his duo consideration in accordance with law, but as the matter is old and remand would load to unnecessary harassment of the appellants, we have preferred to clea.l with the appeal on merits." (p. 560).

It was in those circumstances that t.his Court went

into the whole controversy on its merits and deter-mined tho appeal in favour of tho assessee. That case, therefore, is no precedent in favour of tho appellant.

The next case relied upon by the counsel for

the. appell~ut is The State of Bombay v. M/a, Ratilal Vadilal ('). That was case in which tho State of Bombay had appealed to this Court on special leave against tho order of the Sales Tax Tribunal, Bombay, by which the Tribunal had allowed tho appeal before it and set aside t.he order of tho Collector of Sales Tax, under the Bombay Sales Tax Act. Thti respondents in that case were commission a.gents doing business as clearing and

(I) (1961]25.C.R,367.

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transport contractors. They had applied to the Collector of Sales Tax, Bombay, for the determina-tion of t'ie question if they could be called "dealers" within the meaning of the Act, after giving the facts and circumstances of their case. In that case also no steps had been taken to have reference made to the High Court, and this Court observed that it had been frequently noticed that appeals had been filed to this Uourt without exhausting all the remedies open to appellants and that ordinarily this Court would not allow the High Courts to be bypassed and the appropriate cousre for an appel· !ant was to ex:1aust all his remedies before invok-ing the jurisdiction of this Court under Art. 136 of the Constitution. But this Court went into the merits of the case because both the parties invited the Court to do so and did not insist upon the preliminary issue being decided. It is clear, there· fore, that neither of the two cases relied upon by counsel for the appellant is an authority for the proposition that he can come up to this Court on special leave directly against the judgment of the Assessing Authority, without exhausting all his remedies under the Act.

There are cases in which this Court was moved directly against the order of assessment, after ignor-ing the orders of the High Court refusing to have reference made, or deciding the point referred, against the assessee. In those circumstances, this Court refused to entertain the appeal and held that the appellant was not entitled to invoke the jurisdic-tion of this Court under Art. 136, without coming up in appeal from the final decision inter partes given by the High Court. The latest decision of this Court on that question is the case of Chandi Prasad Chokhani v. The State of Bihar ([1]). In that case, the previous decisions of the Court have all been con. sidered in extenso. We are in entire agreement with what has been laid down by this Court in that batch of cases. Another decision of Division Bench of

(I) [1962] 2 S, C.R. 276,

Ramsar«n Das Commerc;al " Tax Officer, Calcutta Sinha C. J.

1961 Rc11uara11 DaJ v, C'Jfllm~r(lr,/ Toi Ojf1ar, C'..clrllttt.-J Sinh4 C. J.

Octoitf JJ.

.282 SUPREME COURT REPORTS [1962] stJl»i> ..

this Cturt is the <'llS<' of Ka11hai11alal Lohia v. Com· ir.i-<sio11er of ITU"ome Tax, West Bengal('). In that cas<', this Court has taken the same view and dis-missed the appeal as •incompetent.'

Tho pri>sent case is muc·h simpler one, in which there arc no special cireum~tances and in which the facts have not yet he<-n finally deter-mined. It may also he noted that the appellant haa not challenged the vires of the Act or of any other law. We, therefore, think thitt we should dismiss this appeal ae 'incompetent', without oxpressingany opinion on the merits of the controversy. It will be open to tho appollant to take such at.cps as it may Le advised, in pursuing such remedies as may be available to it under the law. The appeal is accordingly dismissed, but in tho circumstances without costs.

Appeal dismissed.

THE JIYAJEEHAO COTTON MILLS LTD.

STATE OF MADHYA PRADESH

(B. P. S1NHA, C. J., J. L. KAPua, M. HmAYATULLAH, J.C. SHAH a.nd J. R. MuDHOLKAR, JJ.)

Electricity-Levy of duty-J'roduar, if liabk lo pay duly on ckcricity ronmmd by him&elj-S,.ch Iffy. if ultra vircs the Constitution-Got:tmmenl of India Acl, 1935 (26 Geo. 5 Ch. 2), List II Entry 48H-Con.1titulion of India, /Ml I Entry 81, Liat II, Emry 53-Central PromnCf's and Berar Electricity Duty Act, 1919 (C. P. dJ Berar JO of 1949), as amen<k.d by Madilya Pradeah Taxalion l IJW8 Amc11dment Acl, 1956 (JI. P. 7 of 1956), SB, Z, 8.

The appellant mill produced electricity over 100 volts exclusively for its own consumption. It challenged the levy of the electricity duty by the Government of Madhya Pradesh

(I) (1962) 2 S. C.R. 839.