PETITIONER:
RAMSARAN DAS AND BROS.
Vs.
RESPONDENT:
COMMERCIAL TAX OFFICER, CALACUTTAAND OTHERS
DATE OF JUDGMENT:
31/10/1961
BENCH:
SINHA, BHUVNESHWAR P.(CJ)
BENCH:
SINHA, BHUVNESHWAR P.(CJ)
KAPUR, J.L.
HIDAYATULLAH, M.
SHAH, J.C.
MUDHOLKAR, J.R.
CITATION:
1962 AIR 1326 1962 SCR Supl. (1) 276
ACT:
Supreme Court-Practice-Appeal by special
leave from order of assessment-Maintainability-
Statutory remedies to be exhausted first-
Constitution of India, Art. 136.
HEADNOTE:
In respect of its business as a middleman
relating mainly to sales of coal and coke in the
course of inter-State trade, the appellant firm
was assessed to Central sales tax under s. 8(2) of
the Central Sales Tax Act, 1956, by the Commercial
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 directly against the
order of assessment When the appeal was taken up
for hearing, the question was raised as to whether
it should be entertained, 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.
Held, that an assessee is not entitled
ordinarily to come up to the Supreme Court
directly against the judgment of the Assessing
Authority and invoke the Court's jurisdiction
under Art. 136 of the Constitution without first
exhausting the remedies provided by the taxing
statutes.
Mahadayal Premchandras v. Commercial Tax
Officer Calcutta, [1959] S.C.R. 551 and The State
of Bombay v. M/s. Ratilal Vedilal, [1961] 2 S. C.
R. 367, explained.
Chandi Prasad Chokhani v. The State of Bihar,
[1962] 2 S. G. R. 276 and Kanhaiyalal Lohia v,
Commissioner of Income-Tax Bengal, [1962] 2 S. C.
R. 839, followed.
^
Held, further, that in the present case, in
which there, were no special circumstances and in
which the facts had not yet been finally
determined, the appeal must be considered to be
incompetent.
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 592 of 1960.
Appeal by special leave from the judgment and
order dated June 17, 1959, of the Commercial Tax
officer, Calcutta, in case No. 54(c) of 1969-60.
277
N. a. Chatterjee and S. a. Mazumdar, for the
appellants.
B. Sen and P. E. 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
SINHA, a. J.-This is a direct appeal by
special leave granted by this court on September
7, 1969, against the order, dated July 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 hereinafter
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 ease, it is not necessary to state in any
detail the facts and circumstances leading up to
this appeal. The appellant is a 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 a
dealer in coal and coke, and (2) of a middleman
bringing about sales of coal and coke between
colliery owners and consumers. In respect of its
business as a dealer, the appellant is a
registered dealer under the Bengal Finance (Sales
Tax) Act (Bengal Act VI of 1941). Its second
business as a middleman relates mainly to sales
of coal and coke in the course of interstate 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
278
applied for and obtained a certificate of
registration under the Act on July 30, 1957. In
May 1958, the appellant made its return under the
Act in respect of the period aforesaid, showing
the turnover as nil. But in spite of its showing
cause against the proposed assessment, the first
respondent determined Rs.9,17,196 as the
appellant’s turnover in respect of the period
aforesaid and assessed central sales tax thereon
at Rs. 42,617.82nP. under s. 8(2) of the Act, and
issued Demand Notice. The appellant moved this
Court and obtained the special leave to appeal
from the order of the first respondent making
assessment and later a demand on the basis of the
assessment.
From the statement of facts given above, it
is clear that the appellant did not exhaust all
his remedies under the Act itself; and came
directly to this Court as if the order of
Assessment passed by the first respondent was
final. The question, therefore, arises whether
this court should entertain the appeal, when even
the facts have not been finally determined by the
final fact-finding authority under the Act, nor
has the jurisdiction of the High Court been
involved to exercise its power under the Act. But
Mr. Chatterjee, on behalf of the appellant, has
contended in the first instance that the powers of
this Court are 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 the
Constitution are as wide as they could be,
because, unlike the preceding articles of the
constitution, there is no limitation that the
Judgment, decree or order should be final in the
sense that the appellant in this Court has
exhausted all the remedies provided by law before
invoking the jurisdiction of this Court to grant
“special leave to appeal from any judgment, decree
determination sentence or order in any case or
matter passed or
279
made by any Court or Tribunal in the territory of
India.” In spite of the wide amplitude of the
jurisdiction of this Court to entertain appeals by
special leave, this Court has imposed certain
limitations 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. But Mr. Chatterjee, on behalf of the
appellant, invited our attention to the decision
of this Court in Mahadayal Premchandra v.
Commercial Tax officer, Calcutta (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 decision completely covers the
points in controversy in the present case also. It
is contended that was also a case, like the
present one of commission agents who had been
charged sales tax. There are several reasons why
the authority of that 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 this Court, no such
question, as we have to determine, had been
raised. Apparently, counsel for both the parties
were anxious to have the final determination of
the controversy by this Court. Secondly, there
were special circumstances in that case, which are
not present in the instant case. The most
outstanding feature of that case was, as pointed
out by this Court, that the Assessing Authority
had not exercised its own judgment in the matter
of the assessment in question. The Assessing
Authority had, contrary to its own judgment, taken
instructions from the Assistant Commissioner and
followed those directions This Court had also
pointed out that even
(1) [1959] S. C. R. 551.
280
though the Assessing Authority was satisfied on
the materials placed by the assessee that he was
not liable to pay sales tax, he carried out the
directions of a superior officer. This Court
further pointed out that there had been complete
failure of justice on account of the, 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. The
Court was led to make the following very
significant observations:
“The procedure adopted was, to say that
least, unfair and was calculated to undermine
the confidence of the public in the impartial
and fair administration of the sales-tax
Department concerned. We would have, simply
on this ground, set aside the assessment
order made by the first respondent and
remanded the matter back to him for his due
consideration in accordance with law, but as
the matter is old and a remand would lead to
unnecessary harassment of the appellants, we
have preferred to deal with the appeal on
merits.” (p. 560).
It was in those circumstances that this Court went
into the whole controversy on its merits and
determined the appeal in favour of the assessee.
That case, therefore, in no precedent in favour of
the appellant.
The next case relied upon by the counsel for
the appellant is The State of Bombay v. M/s.
Ratikal Vadilal(1). That was a case in which the
State of Bombay had appealed to this Court on
special leave against the order of the Sales Tax
Tribunal, Bombay, by which the Tribunal had
allowed the appeal before it and set aside the
order of the Collector of Sales Tax, under the
Bombay Sales Tax Act. The respondents in that case
were commission agents doing business as clearing
and
(1) [1961] 2 S.C.R. 367
281
transport contractors. They had applied to the
Collector of Sales Tax, Bombay, for the
determination of the 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 a reference made to the High Court, and this
Court observed that it has been frequently noticed
that appeals had been filed to this court 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
course for an appellant was to exhaust all his
remedies before invoking the jurisdiction of this
Court under Art. 136 of the constitution. But this
Court went into the merits of this case because
both the parties invited the Court to do so and
did not insist upon the preliminary is an being
decided. It is clear, therefore, 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
ignoring the orders of the High Court refusing to
have a reference made, or decision 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 jurisdiction of this Court
under Art. 136, without coming up in appeal from
the final decision inter parties 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 considered on
extenso. We are in entire agreement with what has
been laid down by this Court in that batch of
cases. other decision of a Division Bench of
(1) [1962] 2 S. C. R. 276.
282
this Court is the case of Kanhaiyalal Lohia v.
Commissioner of Income tax, West Bengal (1). In
that case, this Court has taken the same view and
dismissed the appeal as ‘incompetent.’
The present case in a much simpler one, in
which there are no special circumstances and in
which the facts have not yet been finally deter
mined. It may also be noted that the appellant has
not challenged the vires of the Act or of any
other law. We, therefore, think that we should
dismiss this appeal as ‘incompetent’, without
expressing any opinion on the merits of the
controversy. It will be open to the appellant to
take such steps as it may be advised, in pursuing
such remedies as may be available to it under the
law. The appeal is accordingly dismissed, but in
the circumstances without Costs.
Appeal dismissed.