JUDGMENT
Manohar Lall, J.
1. In this appeal by the plff. whose suit has been dismissed by the Additional Subordinate Judge of Darbhanga, the two questions for decisions are whether the suit is maintainable & whether the appellant is a “dealer” within the meaning of the Sales Tax Act (The Bihar Act IV (4) of 1944) hereafter to be called the Act.
2. Except as to whether the plff. is a dealer within the meaning of the Act, the facts are not in dispute. The plff. Raja Visheshwar Singh Bahadur is the proprietor of Rajnagar Estate in the district of Darbhanga & possesses extensive zirat fields on which he grows grains like paddy, khesari, wheat & gram besides sugar-cane. After meeting the personal requirements of himself, his family & his large staff, a portion of the excess, which is not required to be stored for consumption, is sold. The cause of action for the suit was that in February 1945, the Sales Tax Officer of Darbhanga, served the plff. with a notice that he should get himself registered as a dealer under the Act, but the plff. denied that he was a dealer within the meaning of the Act. The Superintendent of Commercial Taxes, Darbhanga, Circle, however, called upon the plff. to produce the papers by his notice dated 1-6-1945, apparently under Section 9 of the Act. The plff. again denied his liability to furnish the returns or produce the papers, & accordingly the plff. served a notice dated 20-6-1945 on the deft., who is the Province of Bihar, requesting the Superintendent for the withdrawal of the aforesaid notice. As the Sales Tax Officers appeared to be unwilling to withdraw the notice, the plff. instituted the suit giving rise to this appeal on 7-9-1945 for the following reliefs: that a declaration be made in the plff’s favour that he is not a dealer under the Sales Tax Act & so need not get himself registered under the Act & is not liable to assessment of Sales Tax; & that a permanent injunction be granted restraining the deft, from ever proceeding with the assessment & realising any tax under the Sales Tax Act from the plff. The suit was valued at Rs. 5001/-.
3. The deft’s contention was that the suit was not maintainable & was barred under the provisions of the Act & the Civil Court had no jurisdiction to try it, & further that the deft. was a dealer within the meaning of the Act.
4. The learned Subordinate Judge has come to the contusion that the suit was maintainable because no order had yet been passed by the Sales Tax Officer which could be called an order under the Act. Upon a consideration of the evidence adduced he held that the plff. was a dealer because the sale or supply has grown into a profession — the learned Subordinate
Judge does not say the sale or supply of which of the agricultural produce he has in mind, but apparently he is thinking of sugarcane which was sold to the Lohat Sugar Mill & Sakri Sugar Mill to the value of Rs. 72,000 in 1943-44 & Rs. 50,000 in 1944-45. The only evidence adduced in the case is that of the accountant of the plff. who also stated that paddy, khesari, wheat & gram are also sold by the plff., & more than Rs. 5000/- worth of these articles were sold in 1351 & 1352 fasli, & also in previous & subsequent years.
5. The learned Subordinate Judge on these findings has dismissed the suit & hence this appeal to this Court.
6. The first question which I propose to consider is whether the suit is maintainable.
7. The principle upon which the extent of jurisdiction of a Court with limited powers is to be determined has been laid down in the leading case of ‘Queen v. Special Commissioners of Income Tax’, (1888) 2 Tax Cas 332. The oft quoted & frequently followed observations of Esher, M. R. may be usefully reproduced :
“When an inferior Court, or an inferior tribunal, or an inferior body which is trusted by the Legislature to come to a decision on facts is constituted by Act of Parliament for the first time, the Legislature has to consider what power it will give to those persons. It may say if as certain state of facts exist before you have anything to do with the matter, then you will have jurisdiction to do what we will tell you to do, but you shall not have jurisdiction otherwise, then the existence of such facts is not for them to decide, & if they exercise the jurisdiction which is given them without the existence of those preliminary facts which they have not to decide upon, you may question the exercise of their jurisdiction afterwards, & hold that they have no jurisdiction to do what they did. They would then have done all that was entrusted to them under circumstances when that jurisdiction which was to be entrusted to them did not exist — the preliminary facts did not exist; but they had not to decide upon the preliminary facts, they had no jurisdiction to decide upon the preliminary facts; but there is another state of things. The Legislature may, if the matter will present some doubt, entrust them not with two jurisdictions, in my opinion — with one jurisdiction but a jurisdiction which comprises & includes two sets of facts. They have the jurisdiction given to them to decide whether the preliminary set of facts exists, which if they do exist, will entitle them to go farther, & to do something more. If the Legislature gives them that, I do not call it a double jurisdiction, but that comprehensive jurisdiction, it is all one jurisdiction. They have jurisdiction with regard to what you may call the preliminary facts, the first set of facts — the same jurisdiction & just as much jurisdiction as they have with regard to the second. When the Legislature given to an inferior body of any kind by Act of Parliament for the first time a jurisdiction, the Legislature has to consider this: ‘Will we, or will we not, grant an appeal against those persons with regard to their decisions?” If, in such a case, when the Act of Parliament gives them jurisdiction for the first time, & a limited jurisdiction, the Act of Parliament does not give as appeal, there is no appeal. Then, in the case I have just spoken of, it is not right to say
that they are giving themselves jurisdiction by deciding wrongly upon certain facts; the jurisdiction is given them over all the facts, & no appeal is given; & in that case, to my mind, as to the first set of facts just as much to the second, if the Act of Parliament has given them no appeal, there is no appeal.”
8. As an illustration of the application of the principle I refer to some cases. In ‘Kodak Ltd. v. Robert Clark’, (1903) 4 Tax Cas 549, the Court refused to issue a writ of prohibition to the Commissioners of Income Tax forbidding them from making an assessment. The contention of the assessees was that they were not carrying on a trade so as to make them liable for taxation on the profits thereof. The Master of the Rolls observed at p. 572,
“Now what is it that the General Commissioners of Taxes have to ascertain? Surely they had to ascertain what trade a tax payer who is assessable to income-tax is carrying on, & to do this it is within the jurisdiction of the Commissioners to ascertain what is the connection between the Kodak Company in this country & that Rochester business in America. This is what the Commissioners are doing, & I agree with the King’s Bench Division that the assertion that the Commissioners have gone, or are going, wrong in determining this question gives no ground for prohibition.”
9. In ‘Rex v. The Swansea Income Tax Commissioners’, (1925) 9 Tax Cas 437, the assessees obtained a Rule Nisi for a writ of Prohibition against the General Commissioners to prohibit them from proceeding with the assessment on the ground that, as there were no trading profits in the year of assessment, the company was not assessable. Lord Hewart, C. J., discussed a number of cases & drew attention to the general principle so clearly and authoritatively enunciated by Baron Parke in the case of Alien v. Sharp’, (1848) 2 Ex 352 at p. 363 :
“On a careful consideration of these Acts of Parliament, they seem to me to differ from the Statute of Elizabeth as to poor-rate & that the Legislature intended that the assessment of the assessor appointed by the Commissioners should be final & conclusive, unless appealed from in the first place, to the Commissioners, & further, if necessary, to the Judges of the superior Courts.”
& a little later he added,
“Without referring to the Statutes, I should say, a priori, that the object of the “Legislature was to make the decision of the assessor final & binding, unless disputed in the manner pointed out.”
Avory, J. in the agreeing judgment refers to the above quotation from Esher, M. R.
10. I have, however, come across some cases in the English Courts, where writs of prohibition have been issued e.g. ‘The King v. Kensington Income-tax Commissioners’, (1913) 6 Tax Cas 279. See also ‘House of Lords The King v. Kensington Income-tax Commissioners’, (1915) 6 Tax Cas 613.
11. In ‘Rex v. Inspector of Taxes for Parish of Kingsland’, (1922) 8 Tax Cas 327, a notice was issued to the General Commissioners & the Inspector of Taxes to show cause why a writ of Prohibition should not issue, prohibiting them from proceeding with the additional assessments, like Section 34 proceeding in India, Lush, J. observed at p. 330,
“I wish to preface what I am about to say by pointing out that we are not dealing with a case where there is no remedy provided if a mistake either of law or of fact should be made. We are dealing with a case in which admittedly there is a right of appeal both upon law & fact, to the General Commissioners.”
and after discussing the materials on the record he came to the conclusion that the jurisdiction is given to the surveyor to investigate the matters & come to the conclusion whether it is upon the matter of law or upon the matter of fact, & then refused the writ of prohibition. This is exactly the position of an assessee under the provisions of the Sales Tax Act.
12. In ‘Smeeton v. Attorney-General’, (1919) 12 Tax Cas 166, the plff. brought an action against the Attorney General to obtain in substance a declaration that he does not carry on a business & is not liable under Section 39, Finance (No. 2) Act, 1915, or under any other statutory enactment to the payment of excess Profits Duty. Peterson, J. at p. 172 observed, “while the Court has jurisdiction to make a declaration in such a case as the present, the exercise of the jurisdiction is discretionary”, and referred to some cases. He then puts the matter thus at p. 173, “but the real question is whether the plff.’s business or occupation is one which comes within Section 39 of the Act, & that question depends upon the circumstances of the particular case. Nor can it be said that the Commissioners are obvionsly doing something which they are not authorised to do, for the question whether the plff. is subject to the duty is one which may well be, and has in fact been, the subject of considerable discussion & some doubt. The plff.’s contention involves the proposition that whenever the Commissioners require a return under Section 144 it is open to the recipient of the notice to commence an action for a declaration that his business or occupation is not one of those which are subject to the tax under Section 39 on the ground that there is a question of fact whether he is carrying on a business which comes within the scope of the section. On this basis the Commissioners could not without exposing the Crown to an action for a declaration require a return from any person unless the knowledge of the details of his business or occupation was such as to satisfy them that it came within Section 39. But in many cases it is quite impossible for them to have this previous knowledge. How without investigation of the books of the subject or information supplied by him could they, for instance, say what amount of capital was required for the purpose of his profession, or whether his profits are dependent mainly upon his personal qualifications, or whether his business is that of an agent whose remuneration consists wholly of a fixed sum not dependent on the amount of business done or any other contingency, or whether he takes commissions?
13. The Legislature in passing this Act can hardly have contemplated that questions of this kind were to be removed from the consideration of the Commissioners, who are the appropriate body for the purpose of investigating facts of this description. Nor can it be said that the question in this case can only be determined in an action of this sort. The plff. might have followed the course which has been accepted in other cases. He might have made a return & at the same time raised the question whether he was chargeable at all under the Act, & if the
Commissioners decided against him he could have the question determined by the Court which decides Revenue cases. If he preferred to insist upon what he considered to be his strict rights & refused to make a return, although he had the material for his Income Tax return available for the purposes of this return, he might have waited until the Commissioners assessed him in default of making a return & appealed from their assessment. In the result the learned Judge held that it was not desirable that cases of this character should be withdrawn from the Court which is constituted for the purpose of dealing with Revenue cases. He therefore, declined to make the declaration for which the plff. asked & abstained from expressing any opinion on the question whether the plff. is carrying on a trade or business which is subject to the provisions of the Act.
14. In my opinion, the question which arises for consideration in this case is similar to the one dealt with in ‘Smeeton’s case’, (1919) 12 Tax Cas 166, & I should follow this decision.
15. In ‘Lionel Sutcliffe, Ltd. v. The Commrs. of Inland Revenue”, (1928) 14 Tax Cas 171, it was held that the writ can only issue where the Income Tax Authorities are merely masquerading & pretending to do their duties, but really they are arbitrarily & injudiciously refusing to hear the assessee.
16. Similarly, in ‘Rex v. General Commrs. of Income Tax for the Division of St. Maryleborne’, (1928) 13 Tax Cas 746, Lord Hewart, C. J., says at p. 757 :
“Now this appln. for a writ of prohibition is undoubtedly an endeavour to prevent the Commissioners for the General Purposes of the Income Tax from pursuing that course which is laid down very clearly by the Income Tax Acts as the normal course to be pursued with reference to the question whether, & to what extent, a person is liable to be taxed. There are, no doubt, a few very exceptional cases in which that normal course has not so much been departed from as interrupted & prevented for a sufficient reason. The question is whether this particular case falls within that exceedingly narrow & restricted category,”
and then referred to the instances in which the departure had been affirmed. With regard to the question before himself, the learned Chief Justice observed at p. 760 that
“here the question of the fact upon which the liability of Mr. Caesar Schlesinger to pay Income Tax depends is a question of the kind which, in the clearest terms, the legislature has appointed the General Commissioners of Income Tax to determine. Avory, J. in a concurring judgment adopted a passage from the judgment of Lord Chancellor, Lord Selborne, in the case of the ‘Denaby Main Colliery Company that the Railway Commissioners ‘have acted within their jurisdiction. They have not done anything which is shown to be prohibited by any law or statute, & they have not omitted anything which is shown by any law or statute to be made a condition of the exercise of their jurisdiction’.”
17. The most recent pronouncement of the Judicial Committee in ‘Raleigh Investment Co. Ltd. v. Governor-General in Council’, 1947-15 ITR 332, in probably a settler of this question — it was decided that where the Act (Income
Tax Act in that case) provides a complete remedy a Civil Suit is not maintainable, even if the officer violates the provisions of the Act. Applying this to the present case the assessee has a complete remedy under the provisions of the Sales Tax Act &, therefore, no relief should be granted to him in the Civil Suit. There is a most exhaustive & illuminating discussion of the relevant authorities in the judgment of that eminent Judge Varadachariar J. & by Stodart, J. in ‘Secy. of State v. Meyyappa’, (1936-4 ITR 341). But the conclusion of the learned Judges as to the ambit of Section 67, Income Tax Act cannot be supported in view of the P. C. decision in ‘Raleigh Investment Co.’s case’, (supra) & in ‘Maharajah of Pithapuram v. Commissioner of Income-tax, Madras’, 1945-13 ITR 221.
18. It is unnecessary to cite or consider other cases decided in England or in this country. I am clearly of the opinion that for the reasons given in ‘Smeeton’s case & Lionel Sutcliffe’s case’ (supra) the relief sought for against the Sales Tax Department should be refused.
19. But Mr. Baldeva Sahay on behalf of the plff. founded an argument upon Section 18 of the Act corresponding to Section 21, Bihar Sales Tax Act, of 1947. There it is provided that if any question arises (otherwise than in a proceeding before a Court) whether or not for the purposes of this Act :
“(a) any person … is a dealer, the Commissioner shall determine such question.”
He, therefore, argued that the Civil Court is not debarred from determining the question whether the plff. is a dealer. I think the argument is entitled to succeed, but only to this extent that the determination of the question is not taken out of the jurisdiction of Civil Court, but that does not assist the plff. as the question is not whether the Civil Court can determine the question but whether the Court can prohibit the Sales Tax authorities from proceeding to go on with the assessment proceedings.
20. In several cases decided by their Lordships of the Judicial Committee it has been pointed out that the Court shoud not pass declaratory decrees in India unless circumstances are special & exceptional of the type pointed out by Sir Montague E. Smith while delivering the judgment in ‘Sheo Singh v. Mt. Dakho’, 5 I A 87. His Lordship stated at p. 111:
“It is scarcely necessary to say that their Lordships desire to adhere to the opinion declared in several decisions of this Board, that Section 15, Indian Act VIII (8) of 1859 relating to decleratory decrees ought to receive the same construction as Section 50. English Act, 15 & 16 Vict. C. 86, which is similarly worded, has received from the English Courts. In the last of these decisions, the English & Indian cases on the subject were reviewed, & it was laid down that a declaratory decree ought not to be made unless there is a right to some consequential relief which, if asked for. might have been given by the Court, or unless in certain cases a declaration of right is required as a step to: relief in some other Court. (Kathama Nat-chiar v. Dorasinga Tever’, 2 IA 169.”
See also ‘Robert Fiscber v. Secy. of State’, 26 I A 16; and ‘Sheoparsan Singh v. Ramnandan’, 43 I A 91 at p. 97, in this case Sir Lawrence
Jenkins pointed out that The plff. coming under Section 42, Specific Relief Act, must be entitled to a legal character or to a right as to property. The plff. in the present case does not ask for any declaration of any right; but he asks for a declaration that he is not a dealer, & therefore, cannot be assessed by the Sales Tax Authority i.e. the requirements of Section 42 are not satisfied.
21. But this is an appealable case & we are bound to give our finding on the question whether the plff. as a dealer or not within the meaning of the Sales Tax Act.
22. Now the word ‘dealer’ is denned in Section 2 (c) to mean a person who carries on the business of supplying goods, & the word ‘goods’ by Sub-clause (d) means all kinds of movable property with certain exceptions. It is not denied that grains or sugarcane are goods within the meaning of the Act, but it is vehemently denied that the plff. is a dealer within the meaning of the definition. The only evidence in the case on this point has been reproduced above. I am unable to hold that on that evidence it can be reasonably held that the plff. is a dealer. I see no evidence or no sufficient evidence rather to hold that the plff. is carrying on a business as a dealer. It is true he sells agricultural products or goods but he has set up no place of business. The evidence is to the effect that the goods are sold in each village probably in the Khalihan where an agriculturist stores them after harvesting or after they are brought to the granaries except with regard to sugarcane which has to be carted to the mills — this is the normal way in which sugarcane is sold in this province at least. The plff. has a vast area of zirat or bakast lands in his cultivation & therefore the amount of goods produced will be large & the bigness of the figures realised by sale thereof is irrelevant.
23. Mr. Baldeva Sahay correctly drew attention to the provisions in the Act relating to sale or transfer of the business of a dealer — Section 7 of the old Act & Section 19 of the new Act. It is argued how can the plff. transfer or sell this business which is inextricably connected with the ownership of the villages in which the lands producing the goods are situated. I would accept the argument as well founded.
24. The provisions of Section 13 of the old Act & Section 16 of the new Act regarding keeping of accounts by dealers — not referred to at the bar — completely demolish the argument of the learned Govt. Pleader who appeared for the deft. These provisions are clear that the dealer is required to keep a true account of the value of goods bought & sold by him. The plff. admittedly does not buy these goods — ex facie therefore he is not a dealer.
25. The decided cases support me in my conclusion based on principle. I am referring only to some of the relevant decisions.
26. In ‘Brown v. Watt’, (1866) 2 Tax Cas 143, a seed merchant took a farm & worked it in connection with the business which was that of selling the seeds. Their Lordships pointed out that there may be engrafted upon that, no doubt, as in many cases there is, the occupation of producing that which the merchant sells, & then he is a manufacturer as well as a merchant, & in such a case the occupation which he was carrying on at the farm is really the manufacturing of seeds to be
used in his business. It will be noticed that the business existed apart from the farm operations. In the present case before me all that I find is that the plff. owns agricultural zirat lands which he cultivates & from which he produces the goods. This is one operation. Now he cannot consume all the goods & he must sell the excess if he does not require all for his own consumption. How can the mere fact of selling the excess make the plff. carry on a business of selling the produce? See the case of ‘Commr. of Income Tax, Burma v. Kokine Dairy, Rangoon’, where a dairy business was being carried on by an assessee owning agricultural lands, ‘1938-8 ITR 502’.
27. In the Privy Council case of ‘Commissioner of Income Tax, Madras v. S. I. Mathias’, 1939.-7 I T R 48, it was found that the assessee was carrying on a business in coffee, Although green coffee itself could not be regarded as income, profits or gains within the meaning of the Act, but it was found that a great organisation was set up by the assessee who owned curing factories at Mangalore & then sold the coffee through his agents at Mangalore & the entire operation from the cultivation to the sale was controlled by the assessee from Mangalore. There are no such facts in the present case.
28. An interesting discussion will be found in a recent case decided by the Privy Council from Australia — ‘The Producers Co-operative Distributing Society, Ltd. v. The Commissioner of Taxation’, 1948-16 I T R Supp. 87, where the “agricultural products” were defined as meaning “the products of any rural industry” & “rural industry” was defined as meaning “the pastoral, dairying or rural purpose” by the relevant Australian Act. The question for decision was whether the making of butter by a factory process was not agricultural pro-cultivation or use of land for any agricultural, duct. Their Lordships pointed out inter alia that the use or cultivation of the agricultural lands results in one definite product-cream, & that “at that stage a distinct organised industry appears on the scene”, that is to say, there are two industries, the farming industry & the butter-making industry, and even though the industries are closely related, they are independent & the product of the latter industry is not in any real sense the product of the former industry. In the present case no organised industry appears on the scene after the agricultural produce is removed from the lands. For these reasons my conclusion is that within the meaning of Section 2(c) the assessee is not a dealer as he is not carrying on any business of selling the agricultural produce or goods in Bihar.
29. In the result, I would reverse the findings of the Additional Subordinate Judge on both the issues, but would confirm his decree by which he dismissed the plffs suit.
30. I would also direct each party to bear his own costs in this Court & in the Court below.
Mahabir Prasad, J.
31. I agree.