{"id":10632,"date":"1971-10-06T00:00:00","date_gmt":"1971-10-05T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/state-of-bihar-vs-oriental-coal-co-ltd-on-6-october-1971"},"modified":"2018-06-24T18:11:54","modified_gmt":"2018-06-24T12:41:54","slug":"state-of-bihar-vs-oriental-coal-co-ltd-on-6-october-1971","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/state-of-bihar-vs-oriental-coal-co-ltd-on-6-october-1971","title":{"rendered":"State Of Bihar vs Oriental Coal Co. Ltd on 6 October, 1971"},"content":{"rendered":"
Supreme Court of India<\/div>\n
State Of Bihar vs Oriental Coal Co. Ltd on 6 October, 1971<\/div>\n
Equivalent citations: 1972 AIR 378, \t\t 1972 SCR (1) 982<\/div>\n
Author: K Hegde<\/div>\n
Bench: Hegde, K.S.<\/div>\n
           PETITIONER:\nSTATE OF BIHAR\n\n\tVs.\n\nRESPONDENT:\nORIENTAL COAL CO.  LTD.\n\nDATE OF JUDGMENT06\/10\/1971\n\nBENCH:\nHEGDE, K.S.\nBENCH:\nHEGDE, K.S.\nGROVER, A.N.\n\nCITATION:\n 1972 AIR  378\t\t  1972 SCR  (1) 982\n\n\nACT:\nCivil Court-Jurisdiction-Assessment of sales  tax-Assessee's\nplace of business outside State-Payment of sales tax outside\nState-Assessment set aside by appellate authority-Suit,\t for\nrefund-Filed  outside  State-if cause of action or  part  of\ncause of action arose outside State.\n\n\n\nHEADNOTE:\nThe  registered\t office\t of the respondent  company  was  at\nCalcutta.   The respondent company was a  registered  dealer\nunder  the Bihar Sales Tax Act, 1947. it issued\t cheques  to\nthe  appellant-State for the amounts due towards  sales\t tax\nfor  the  years 1950-51, 1951-52 and 1952-53 on\t a  Calcutta\nBank and the cheques were encashed there.  After paying\t the\ntax  it\t appealed  and the  appellate  authority  heard\t the\nappeals at Calcutta and set aside the orders of\t assessment.\nThereafter,   the  respondent  filed  an   application\t the\nSuperintendent\tof Sales Tax, Dhanbad, in Bihar, for  refund\nof  the tax paid by it.\t Since the request was not  complied\nwith,  a  suit was failed on the original side of  the\tHigh\nCourt of Calcutta.  The respondent urged that a part of\t the\ncause of action arose at Calcutta, because, (1) the payments\nwere made at Calcutta under a bona fide mistake of law\tthat\nit  was liable to pay sales tax; (2) its appeals were  heard\nin  Calcutta and the orders of the appellate authority\twere\nalso  received ,it Calcutta; and (3) its registered  office\nwas  situate in Calcutta and it was ?tic duty of the  debtor\nto find the creditor.\nThe  trial  Judge held that the High Court at  Calcutta\t had\njurisdiction  but on merits came to the conclusion that\t the\nrespondent  was\t not entitled to any relief.   The  Division\nBench,\ton appeal, held that the respondent was entitled  to\nthe refund.\nAllowing the, appeal to this Court,\nHELD : (1) In view of Sales-tax Continuance Order, 1950 made\nby the President in exercise of his powers under the proviso\nto Art. 286(2) of the Constitution as the article then stood\nand  s.\t 2 of the Sales Tax Laws Validation Act,  1956,\t the\nassessments for the periods from April 1, 1950 to March\t 31,\n1951  and from April 1, 1951 to March 31, 1953\trespectively\nwere  valid.  Therefore the payments were not made  under  a\nbona fide mistake of law. 1987 C-H, 988 A-DI\nSundaramier v. State of A.P. [1958] 1 S.C.R, 422, followed.\n(2)   But  the\tappellate  authority  had  held\t  that\t the\nassessments  were not valid.  'This order of  the  appellate\nauthority  is  not affected by s. 2 of the Sales  Tax  Laws\nValidation   Act,  because  that  section   only   validates\nassessments  already made,, 'notwithstanding  any  judgment,\ndecree or order a court, but not, 'notwithstanding an  order\nmade by an authority under the Sales Tax Act'.\tThe validity\nof the order made by the appellate authority could not\talso\nbe  questioned by the appellant in a civil court in view  of\ns.  23\tof  the Bihar Sales Tax\t Act.\tTherefore,  as\tthat\nassessment,,,\tmade  were  set\t aside\tby   the   appellate\nauthority,  the respondent was entitled to the refund.\t[988\nD-H]\n983\n(3) But the High Court at Calcutta had no jurisdiction.\t The\nfact that the plaintiff based his claim on three alternative\ngrounds,  for  one of which alone (which however was  not  a\ntenable\t plea) a part of the cause of action can at best  be\nsaid to have arisen in Calcutta, but not for others,  cannot\nconfer\tjurisdiction on the Calcutta High Court to  try\t the\nsuit on basis of grounds in respect of which no part of\t the\ncause  of  action arose in Calcutta.  The  cause  of  action\nwithin\tthe contemplation of law is that which relates to  a\ntenable plea. [990 D]\n(a)  Since it could not be said that the payments were\tmade\nunder any mistaken impression of the, law, the fact that the\ncheques\t issued by the respondent were encashed at  Calcutta\ndid  not afford any cause of action for filing the  suit  in\nCalcutta. [989 C]\n(b)  (i)  Assuming  that the encashment of  the\t cheques  in\nCalcutta  gave rise to a cause of action at Calcutta  for  a\nclaim  based  on the ground that the payments were  made  on\nmistaken  impression of law, that circumstance could not  be\nsaid  to give rise to a cause of action for the suit on\t the\nground that the respondent was entitled to the refund of the\namounts\t  paid\tbecause\t of  the  order\t of  the   appellate\nauthority. [989 D]\n(ii)  In  view\tof  the Bihar  Sales  Tax  Rules,  1949,  an\napplication  for  refund could have been made  only  to\t the\nCommissioner whose office was situate in Bihar.\t The  refund\ncould  have been made only in accordance with  those  rules,\nand  as\t per the rules, the amount could be  refunded  to  a\ndealer only through one of the State-Government\t treasuries.\nHence,\tthe entire cause of action in respect of  the  claim\nfor  refund on the basis of the appellate authority's  order\narose  only within the State of Bihar, and no part  of\tthat\ncause of action arose outside Bihar. [990 A-C]\n(c) For the same reasons no part of the, cause of action for\nclaiming  the amount on the basis of the doctrine  that\t the\ndebtor\tmust seek his creditor could be said to have  arisen\noutside Bihar.. [990 C]\n\n\n\nJUDGMENT:\n<\/pre>\n
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 307 of 1970.
\nAppeal from the judgment and decree dated March 10, 1964  of
\nthe  Calcutta High Court in Appeal from Original Decree\t No.
\n136 of 1960.\n<\/p>\n
D.  P.\tSingh,\tV. J. Francis, S. C.  Agrawal  and  Naravana
\nNettar, for the appellant.\n<\/p>\n
S.  T.\tDesai,\tBhuvanesh Kumari, J. B.\t Dadachanji,  0.  C.
\nMathur and Ravinder Narain, for the respondent.
\nThe Judgment of the Court was delivered by
\nHegde,\tJ. The , respondent original plaintiff\t(which\twill
\nhereinafter  be referred to as the plaintiff) is  a  company
\nhaving\tits  registered\t office\t at  Calcutta.\t It  was   a
\nregistered  dealer under the Bihar Sales Tax Act,  1947\t (in
\nbrief  the  Act).   On\tor  about  December  14,  1953,\t the
\nplaintiff  issued a cheque to the defendant-appellant for  a
\nsum  of Rs. 10,000\/- drawn on the Oriental Bank of  Commerce
\nLtd., Calcutta towards the sales
\n984<\/span>
\ntax due from it for the years 1950-51, 1951-52 and  1952-53.
\nThat cheque was sent to Calcutta for encashment and encashed
\nat  that  place.   On  September  25,  1954,  the  Assistant
\nSuperintendent\tof  Sales-tax passed  assessment  orders  in
\nrespect of the years mentioned earlier.\t According to  those
\norders, the plaintiff was liable to pay sales tax  amounting
\nto Rs. 2803\/2\/- in respect of the year 1950-51; Rs. 3670\/5\/-
\nfor  the  year 1951-52; Rs. 4623\/6\/- for the  year  1952-53,
\nthus  a total of Rs. 11,096\/13\/-.  As seen earlier,  it\t had
\nalready\t paid  a sum of Rs. 10,000\/- earlier.  On  July\t 23,
\n1955, it paid the balance of Rs. 1096\/13\/-; this again by  a
\ncheque\ton  the\t bank  mentioned  earlier.   This  was\talso
\nencashed at Calcutta.\n<\/p>\n
Aggrieved  by  the assessment orders made by  the  assessing
\nauthority, the plaintiff went up in appeal to the  Assistant
\nCommissioner  of  Sales Tax, Chhotanagpur  Division,  Bihar.
\nThose  appeals\twere  heard by the  appellate  authority  at
\nCalcutta.  The appellate authority by its order of September
\n24,  1955  allowed the appeals and set aside the  orders  of
\nassessment.   Before  that order was made,  this  Court\t had
\nruled in The Bengal Immunity Co.  Ltd. v. The State of Bihar
\nand  ors.<\/a> (1) that until Parliament by law made in  exercise
\nof  the\t powers\t vested\t in it by clause  (2)  of  Art.\t 286
\nprovides  otherwise,  no State can impose or  authorise\t the
\nimposition  of any tax on sales or purchases of\t goods\twhen
\nsuch  sales or purchases take place in the course of  inter-
\nState  trade  or commerce. on the basis of  that  conclusion
\nthis  Court held that the charging section of the  Act\tread
\nwith  the relevant definitions cannot operate to tax  inter-
\nState  sales  or  purchases and as the\tParliament  has\t not
\notherwise provided, the Act, in so far as it purports to tax
\nsales  or purchases that take place in the course of  inter-
\nState  trade or commerce, is unconstitutional,\tillegal\t and
\nvoid.  Evidently that decision was brought to the notice  of
\nthe  appellate authority at the hearing of the\tappeals\t and
\nthat  authority\t purported  to\tact on\tthe  basis  of\tthat
\ndecision.   The appeals in question were allowed with  these
\nobservations :\n<\/p>\n
\t      “These  three  appeals  are  directed  against
\n\t      assessment orders for the years 1950-51, 1951-
\n\t      52 and 1952-53.<\/p><\/blockquote>\n
\t      The only point pressed before me is that since
\n\t      this is a case of non-resident dealers,  there
\n\t      should  have  been no assessment.\t  The  lower
\n\t      Court  records show that the, workshop of\t the
\n\t      plaintiff\t is  situate  in  Barakar  which  is
\n\t      outside Bihar.  From here he supplies goods to
\n\t      collieries in Bihar.  In other words, he is  a
\n\t      non-resident
\n(1)  [1955] 2 S.C.R. 603.\n<\/p>\n
 985<\/span><\/p>\n
.lm15
\ndealer and so, according to the latest decision of  Supreme-
\nCourt, he cannot be assessed to pay any tax in Bihar.
\nThese appeals are accordingly allowed in full.”\n<\/p>\n
\t\t      Sd\/- M. Ahmad,
\n\t\t\t24-9-1955
\n\t   Assistant Commissioner of Sales Tax.”\n<\/p><\/blockquote>\n
It  is\trather\tdifficult to understand,  this\torder.\t But
\nbefore\tthe High Court Counsel for both the  parties  agreed
\nthat  the decision referred to in the order is the  decision
\nin the Bengal Immunity’s case(1).\n<\/p>\n
On  October  12, 1955, the plaintiff  filed  an\t application
\nbefore\tthe Superintendent of Sales Tax, Dhanbad for  refund
\nof the tax paid by him.\t This claim was made on the basis of
\nthe  appellate order.  On January 30, 1956, Sales  Tax\tLaws
\nValidation  Ordinance (No. 3 of 1956) was issued  which\t was
\nfollowed  up  by Sales Tax Laws Validation Act,\t 1956.\t The
\nscope  of this Act was considered by this Court in M. P.  V.
\nSundararamier & Co. v. The State of Andhra Pradesh and\tAnr.<\/a>
\n(2).  , Therein this Court by majority held that  the  Sales
\nTax  Laws Validation Act, 1956 is in-substance\tone  lifting
\nthe  ban on taxation of inter-State sales and is within\t the
\nauthority  conferred  on Parliament under  Art.\t 286(2)\t and
\nfurther\t that  under  that provision  it  was  competent  to
\nParliament  to\tenact a law with  retrospective\t operation..
\nTherein\t this Court further held that S. 2 of the Sales\t Tax
\nLaws  Validation  Act  validates  not  only  levies  already
\ncollected but also authorised the imposition of tax on sales
\nfalling within the explanation which had taken place, within
\nthe period specified in s. 2. It was also. held that the Act
\nwas  not a temporary one though its operation is limited  to
\nsales  taking  place within a specified\t period.   Evidently
\nbecause\t of the Sales-tax Laws Validation Ordinance and\t the
\nSales  Tax Laws Validation Act, the Superintendent of  Sales
\nTax,  Dhanbad  did not comply with the demands made  by\t the
\nplaintiff Thereafter the plaintiff issued to the defendant a
\nnotice on June 7, 1958 calling upon the defendant to  refund
\nthe amount paid by it With interest.  The defendant  ignored
\nthat  demand.\tThen  the  plaintiff filed  a  suit  on\t the
\noriginal  side of the Calcutta High Court claiming a sum  of
\nRs. 13,176\/69 P. with interest and costs.  In the plaint the
\nplaintiff put forward three different grounds as  affording
\nhim a cause of action to institute the suit on the  original
\nside of the High Court.\t They are : (1) that the payments in
\nquestion  were made by it under a bona fide mistake  of\t law
\nnamely that it was liable to pay sales tax to the defendant
\n(1) [1955] 2 S.C.R. 603\t       (2) [1958] S.C.R. 1422.
\nL119SuPCI\/72
\n986<\/span>
\nduring the periods in question; hence it his a right to\t get
\nback  that  amount  and\t as the\t cheques  in  question\twere
\nencashed at Calcutta, a part of the cause of action arose in
\nCalcutta.  (2) its appeals to the Assistant Commissioner  of
\nSales  Tax  were  heard in Calcutta and\t the  order  of\t the
\nappellate  authority was received at Calcutta, therefore,  a
\npart  of  the cause of action on that basis  also  arose  in
\nCalcutta  and  (3)  its\t Registered  Office  is\t situate  in
\nCalcutta.   It\tis the duty of the debtor to  find  out\t the
\ncreditor  and  pay  the debt.  Hence it\t was.  open  to\t the
\nplaintiff to sue, the defendant in Calcutta.
\nThe  defendant resisted the plaintiffs claim.  It  contended
\n(1)  that  in view of s. 2 of the Sales Tax Laws  Validation
\nAct, the  impugned levy and collection must be considered as
\nvalid, therefore no question of reimbursement arose and\t (2)
\nthe Calcutta High Court had no jurisdiction to entertain the
\nsuit as no part of the cause of action arose in Calcutta.
\nThe  suit  was heard by Ray J. (at present a judge  of\tthis
\nCourt) on the original side-of the High Court.\tThe  learned
\njudge  came to the, conclusion that a part of the  cause  of
\naction\tfor the suit did arise in Calcutta for\ttwo  reasons
\nviz.  (1) the cheques issued by the plaintiff were  encashed
\nat Calcutta and (2) under the, circumstances of the case the
\nState  of  Bihar  must\tbe held to be  the  debtor  and\t the
\nplaintiff its creditor; hence it was the duty of the  debtor
\nto find out its creditor and pay the debt to the creditor at
\nCalcutta.   But\t on merits, the learned\t single\t judge\theld
\nagainst\t the plaintiff., He came to the conclusion  that  in
\nview  of s. 21 of the.\tSales Tax Laws Validation Act,\tthe
\nlevy  and collection must be held to be valid  despite\tthe’
\norder of the appellate authority.\n<\/p>\n
Aggrieved, by that decision the plaintiff took up the matter
\nin appeal to a Division Bench of the Calcutta High Court and
\nthe  appeal  was  heard by a Division  Bench  consisting  of
\nBachawat  J.  (who later became a judge of this\t Court)\t and
\nArun  K.  Mukherjee J. The learned judges  of  the  Division
\nBench  allowed the appeal in full.  On the question  whether
\nan part of cause of action arose in Calcutta, differing from
\nthe  view taken\t by Ray J. they held that the doctrine\tthat
\nthe  debtor must find out his creditor and pay the debt\t did
\nnot  apply to the facts of this case because of\t ‘the  rules
\ntrained under the Act under which the refund claimed CA only
\nbe  made inside Bihar.\tBut all the same the learned  judges
\ncame  to the conclusion that as the cheques I issued by\t the
\nPI  ‘*’were  encashed at Calcutta, part of cause  of  action
\nmust  be  held to have arisen in Calcutta;  therefore,,\t the
\nCalcutta ‘High Court had jurisdiction to entertain the suit.
\nOn  merits  the learned judges came to the  conclusion\tthat
\nwhatever might ‘be the
\n987<\/span>
\neffect\tof the provisions of the Sales Tax  Laws  Validation
\nAct,  in, view of the appellate authority’s  order  allowing
\nthe appeals of the plaintiff, whether that order was  right
\nor  wrong,  the defendant was bound to refund  that  amount.
\nAccording  to the Division Bench the order of the  appellate
\nauthority  became final as it had not been appealed  against
\nnor altered in any manner.  It held that the provisions,  of
\nthe  Sales  Tax\t Laws Validation Act did  not  override\t the
\ndecision of the appellate authority.\n<\/p>\n
Let  us\t first take up the question of the validity  of\t the
\nassessments  as\t original  made.  This question\t has  to  be
\nexamined  under two different heads namely the\tvalidity  of
\nthe  assessment .for the period from April 1, 1950 to  March
\n31,  1951  and\tthe  validity of  the  assessments  for\t the
\nremaining  two\tyears.\tSo far .as the\tassessment  for\t the
\nfirst  period is concerned, the same was not touched by\t the
\nSales  Tax Laws Validation Act.\t Section of that  Act  which
\nvalidates the assessment already made reads
\n\t      “Notwithstanding\tany  judgment,.\t decree\t  or
\n\t      order  of\t any  Court,’  no  law\tof  a  State
\n\t      imposing,\t or authorising the imposition of  a
\n\t      tax on the sale or purchase of any goods where
\n\t      such sale or purchase took place in the course
\n\t      of.  inter-State trade or commerce during\t the
\n\t\t\t    period  between the 1st day of April 1
\n951  and
\n\t      the 6th day of September 1955 shall  be-deemed
\n\t      to  be  invalid or ever to have  been  invalid
\n\t      merely by reason of the fact that such sale or
\n\t      purchase\ttook place in the course  of  inter-
\n\t      State  trade or commerce; and all\t such  taxes
\n\t      levied or collected or purporting to have been
\n\t      levied  or  collected  during  the   aforesaid
\n\t      period  shall  be deemed always  to.  have  be
\n\t      validly levied or collected in accordance with
\n\t      law”\n<\/p>\n
it is clear that this provision only deals with taxes levied
\nor collected or purporting to have been, levied or collected
\nduring the period commencing April 1, 1951 till September 6,
\n19  Hence this sect-ion does not take in the assessment\t for
\nthe year 1950-51.  The question of the validity\t of  that
\nassessment-has,\t  to   be  separately\tconsidered   without
\nreference  to  the Sales Tax, Laws Validation Act. ‘It\tis
\nseen  that the levy and collection of tax relating  to\tthat
\nperiod\tis governed by the Sales Tax Continuance Order\t1950
\nmade  by the President in exercise of his powers  under\t the
\nprovision  to cl…(2) of Art…286 of\tthe Constitution  of
\nIndia as that Article stood,then. In view of that order,  it
\ncannot\tbe said that the assessment made for-the  year,1950-
\n51’  is. violative of Art. 286 ‘ The validity of ‘the  above
\nreferred order has not been challenged before us.  Hence our
\nconclusion  is\tthat the assessment in respect of  the\tyear
\n1950-51 was validly made.\n<\/p>\n
988<\/span><\/p>\n
Now  coming to the validity of the assessments made for\t the
\nsecond\tperiod, the same is fully covered by the  Validating
\nprovisions  contained  in  S.  2  of  the  Sales  Tax\tLaws
\nValidation  Act.  This section has been given  retorspective
\neffect as from April 1, 1951.  Therefore we have to  proceed
\non  the basis of the fiction that the provisions of the\t Act
\nrelating to levy of tax on inter-State sales have all  along
\nbeen valid provisions.\tThis position is made clear ‘by\t the
\ndecision of this Court in Sundararamier’s(1) case.
\nFrom the above discussion it follows that if the assessments
\nmade  by the assessing authority are examined solely on\t the
\nbasis  of  law,\t there\tis  no\tground\tfor  coming  to\t the
\nconclusion  that those assessments are invalid\tassessments.
\nIf they are not invalid assessments then the plaintiffs case
\nthat  he  made the payments in question under  a  bona\tfide
\nmistake\t of  law  is clearly  unsustainable.   In law,\tas
\ninterpreted by us, he was bound to make those payments.
\nBut  the complicating factor is the order of the  ‘appellate
\nauthority.    The  appellate  authority\t had  come  to\t the
\nconclusion  that the impugned assessments were\tnot  validly
\nmade.\tIt  is that order that gave the plaintiff  right  to
\nclaim  back  the amounts paid by it though  that  order\t was
\npartly erroneous even when it was made and it became wholly
\nerroneous  when\t the  Parliament  validated  the  law\twith
\nretrospective  effect.\t But,  that did not  take  away\t the
\neffect\tof the order.  It was an order made by\ta  competent
\nauthority,  which  authority,  to repeat  the  often  quoted
\nsaying had the right to decide the case before it rightly or
\nwrongly.\n<\/p>\n
Section\t 2  of the Sales Tax Laws Validation Act,  does\t not
\ntake  in any order made by any of the authorities under\t the
\nSales  Tax Act.\t It merely refers to judgments,\t decrees  or
\norders of any court.  The orders of the appellate  authority
\ncannot\tbe  considered\teither as judgments  or\t decrees  or
\norders of the Court.  In this view, it is not necessary\t ‘to
\nexamine the scope of the remaining part of that section.
\nFrom  what  has been stated above, it follows  that  as\t the
\nassessments made were set aside by the appellate  authority,
\nthe plaintiff was entitled to the refund of the amounts paid
\nby  him.  The validity of the order made by  the  appellate
\nauthority cannot be called into question in a civil court in
\nview of S. 23 of the Act.  It:says
\n\t      “Save  as\t is  provided  in  section  25,\t  no
\n\t      assessment  made,\t and no order  passed  under
\n\t      this  Act or the rules made thereunder by\t the
\n\t      Commissioner  or any person.  appointed  under
\n\t      section 3 to assist him shall be called
\n(1)  (1958) S.C.R. 1422.\n<\/p>\n
989<\/span><\/p>\n
\t      into  question  in any Court, and save  as  is
\n\t      provided\t in   section  24,  no\t appeal\t  or
\n\t      application  for revision or review shall\t lie
\n\t      against any such assessment or order.”\n<\/p>\n
In-  view  of  that  section,  the  State  could  not\thave
\nchallenged  the validity of the order made by the  appellate
\nauthority before the High Court.\n<\/p>\n
This  takes  us to the question whether the  High  Court  of
\nCalcutta  had  territorial  jurisdiction  to  entertain\t the
\nplaintiff’s  suit.  We have earlier come to  the  conclusion
\nthat  under  law,  the assessments  made  by  the  assessing
\nauthority  are valid assessments and therefore it cannot  be
\nsaid that the payments made by the plaintiff were made under
\nany  mistaken impression of the law.  Hence in\tour  opinion
\nthe  fact  that\t the cheques issued by\tthe  plaintiff\twere
\nencashed  in Calcutta could not have afforded any  cause  of
\naction\tfor  filing  the suit in the  Calcutta\tHigh  Court.
\nAssuming  but  not deciding that the fact of  encashment  of
\ncheques\t in  Calcutta  gave rise to a  cause  of  action  at
\nCalcutta  for a claim based on the ground that the  payments
\nwere  made  on\ta  mistaken  impression\t of  law  but\tthat
\ncircumstance  cannot  be  said to give rise to\ta  cause  of
\naction\tfor  the suit on the ground that  the  plaintiff  is
\nentitled  to the refund of the amounts paid because  of\t the
\nappellate  authority order.  In our judgment the High  Court
\nfailed to keep apart the two questions namely the claim\t for
\nthe return of the amount paid on the basis that it was\tpaid
\nunder a mistaken impression of the law and the claim made in
\npursuance  of  the order of the\t appellate  authority.\t The
\npayments made by the plaintiff by cheques have nothing to do
\nwith  the appellate authority’s order.\tThey have  not\tbeen
\nmade  on  the basis of that order.  They were made  on\tthe,
\nbasis of the original assessments.  The only ground on which
\nthe High Court has come to the conclusion that the plaintiff
\nis entitled to claim refund of the amount paid is because of
\nthe  fact  that\t the appellate\tauthority  had\tdecided\t the
\nappeals in its favour.\n<\/p>\n
Now,  let  us take up the question whether any part  of\t the
\ncause  of  action  for\tthe  suit  arose  outside  Bihar  in
\nconsequence of the order of the appellate authority.  As per
\nrule 40 of the Bihar Sales Tax Rules, 1949 made in pursuance
\nof  the\t rule  making power conferred  under  the  Act,\t all
\napplications from a dealer for refund of the excess tax paid
\nhave  to be made to the Commissioner in form XIII.  Rule  41
\nprovides that when the Commissioner is satisfied that refund
\nis  due,  he shall record an order sanctioning\tthe  refund.
\nRule  42  provides that when an order for  refund  has\tbeen
\npassed under rule 41, the Commissioner shall, if the  dealer
\ndesires\t payment in cash issue the refund payment  order  in
\nform XIV and shall make it over to the dealer for encashment
\nat the government treasury, a copy of the refund order shall
\nalso  be forwarded to the Treasury Officer concerned.\tRule
\n43 says that if the dealer desires
\n990<\/span>
\npayment by adjustment against any amount payable to him, the
\nCommissioner  shall issue a refund adjustment order in\tform
\nXV  accompanied\t by a challan for adjustment.\tIn  view  of
\nthese  rules an application for refund could have been\tmade
\nonly  before  the Commissioner whose office  is\t situate  in
\nBihar and the refund could have been made only in accordance
\nwith the rules.\t As per the rules the amount to be  refunded
\ncan  be paid to a dealer only through one of the  government
\ntreasuries.  Hence the entire cause of action in respect  of
\nthe  claim  for\t refund\t on  the  basis\t of  the   appellate
\nauthority’s  order arose only within the State of Bihar\t and
\nno  part of that cause of action arose outside\tBihar.\t For
\nthe same reasons no part of the cause of action for claiming
\nthe amount in question on the basis of the doctrine that the
\ndebtor\tmust  seek his creditor and pay the debt  due  could
\nhave arisen outside Bihar, in view of the rules referred  to
\nearlier.   The\tfact that the plaintiff based his  claim  on
\nthree alternative grounds, for one of which alone a part  of
\nthe  cause of action can at best be said to have  arisen  in
\nCalcutta  but not for others, cannot confer jurisdiction  on
\nthe  Calcutta  High Court to try the suit on  the  basis  of
\ngrounds\t in respect of which no part of the cause of  action
\narose  in  Calcutta.   The  cause  of  action,\twithin\t the
\ncontemplation  of  law is that which relates  to  a  tenable
\nplea.\n<\/p>\n
For the reasons mentioned above we are unable to agree\twith
\nthe High Court that any part of the cause of action for\t the
\nsuit arose in Calcutta.\t Hence we set aside the judgment  of
\nthe  Division Bench of the Calcutta High Court\tand  restore
\nthat  of the single judge but not on the ground\t that  found
\nfavour with the learned judge.\n<\/p>\n
In  the result the plaintiff’s suit stands dismissed but  in
\nthe circumstances of the case we direct the parties to\tbear
\ntheir  own  costs both in this Court as well as\t before\t the
\nfirst  appellate  court.  The order of the  trial  court  as
\nregards costs stands.\n<\/p>\n
V.P.S.\t\t\t\t Appeal allowed.\n991<\/span>\n\n\n\n<\/pre>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India State Of Bihar vs Oriental Coal Co. Ltd on 6 October, 1971 Equivalent citations: 1972 AIR 378, 1972 SCR (1) 982 Author: K Hegde Bench: Hegde, K.S. PETITIONER: STATE OF BIHAR Vs. RESPONDENT: ORIENTAL COAL CO. LTD. DATE OF JUDGMENT06\/10\/1971 BENCH: HEGDE, K.S. BENCH: HEGDE, K.S. GROVER, A.N. CITATION: 1972 AIR […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-10632","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nState Of Bihar vs Oriental Coal Co. Ltd on 6 October, 1971 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/state-of-bihar-vs-oriental-coal-co-ltd-on-6-october-1971\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"State Of Bihar vs Oriental Coal Co. Ltd on 6 October, 1971 - Free Judgements of Supreme Court & High Court | Legal India\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.legalindia.com\/judgments\/state-of-bihar-vs-oriental-coal-co-ltd-on-6-october-1971\" \/>\n<meta property=\"og:site_name\" content=\"Free Judgements of Supreme Court & High Court | Legal India\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/LegalindiaCom\/\" \/>\n<meta property=\"article:published_time\" content=\"1971-10-05T18:30:00+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2018-06-24T12:41:54+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/i0.wp.com\/www.legalindia.com\/judgments\/wp-content\/uploads\/sites\/5\/2025\/09\/legal-india-icon.jpg?fit=512%2C512&ssl=1\" \/>\n\t<meta property=\"og:image:width\" content=\"512\" \/>\n\t<meta property=\"og:image:height\" content=\"512\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Legal India Admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@legaliadmin\" \/>\n<meta name=\"twitter:site\" content=\"@Legal_india\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Legal India Admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"21 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.legalindia.com\/judgments\/state-of-bihar-vs-oriental-coal-co-ltd-on-6-october-1971#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.legalindia.com\/judgments\/state-of-bihar-vs-oriental-coal-co-ltd-on-6-october-1971\"},\"author\":{\"name\":\"Legal India Admin\",\"@id\":\"https:\/\/www.legalindia.com\/judgments\/#\/schema\/person\/0bfdffe9059fb8bb24a86d094609c5ea\"},\"headline\":\"State Of Bihar vs Oriental Coal Co. Ltd on 6 October, 1971\",\"datePublished\":\"1971-10-05T18:30:00+00:00\",\"dateModified\":\"2018-06-24T12:41:54+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.legalindia.com\/judgments\/state-of-bihar-vs-oriental-coal-co-ltd-on-6-october-1971\"},\"wordCount\":3320,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/www.legalindia.com\/judgments\/#organization\"},\"articleSection\":[\"Supreme Court of India\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.legalindia.com\/judgments\/state-of-bihar-vs-oriental-coal-co-ltd-on-6-october-1971#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.legalindia.com\/judgments\/state-of-bihar-vs-oriental-coal-co-ltd-on-6-october-1971\",\"url\":\"https:\/\/www.legalindia.com\/judgments\/state-of-bihar-vs-oriental-coal-co-ltd-on-6-october-1971\",\"name\":\"State Of Bihar vs Oriental Coal Co. Ltd on 6 October, 1971 - Free Judgements of Supreme Court & High Court | Legal India\",\"isPartOf\":{\"@id\":\"https:\/\/www.legalindia.com\/judgments\/#website\"},\"datePublished\":\"1971-10-05T18:30:00+00:00\",\"dateModified\":\"2018-06-24T12:41:54+00:00\",\"breadcrumb\":{\"@id\":\"https:\/\/www.legalindia.com\/judgments\/state-of-bihar-vs-oriental-coal-co-ltd-on-6-october-1971#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.legalindia.com\/judgments\/state-of-bihar-vs-oriental-coal-co-ltd-on-6-october-1971\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.legalindia.com\/judgments\/state-of-bihar-vs-oriental-coal-co-ltd-on-6-october-1971#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.legalindia.com\/judgments\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"State Of Bihar vs Oriental Coal Co. Ltd on 6 October, 1971\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.legalindia.com\/judgments\/#website\",\"url\":\"https:\/\/www.legalindia.com\/judgments\/\",\"name\":\"Free Judgements of Supreme Court & High Court | Legal India\",\"description\":\"Search and read the latest judgements, orders, and rulings from the Supreme Court of India and all High Courts. A comprehensive database for lawyers, advocates, and law students.\",\"publisher\":{\"@id\":\"https:\/\/www.legalindia.com\/judgments\/#organization\"},\"alternateName\":\"Free judgements of Supreme Court & High Court of India | Legal India\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.legalindia.com\/judgments\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/www.legalindia.com\/judgments\/#organization\",\"name\":\"Judgements of Supreme Court & High Court | Legal India\",\"alternateName\":\"Legal India\",\"url\":\"https:\/\/www.legalindia.com\/judgments\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.legalindia.com\/judgments\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/www.legalindia.com\/judgments\/wp-content\/uploads\/sites\/5\/2025\/09\/legal-india-icon.jpg\",\"contentUrl\":\"https:\/\/www.legalindia.com\/judgments\/wp-content\/uploads\/sites\/5\/2025\/09\/legal-india-icon.jpg\",\"width\":512,\"height\":512,\"caption\":\"Judgements of Supreme Court & High Court | Legal India\"},\"image\":{\"@id\":\"https:\/\/www.legalindia.com\/judgments\/#\/schema\/logo\/image\/\"},\"sameAs\":[\"https:\/\/www.facebook.com\/LegalindiaCom\/\",\"https:\/\/x.com\/Legal_india\"]},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.legalindia.com\/judgments\/#\/schema\/person\/0bfdffe9059fb8bb24a86d094609c5ea\",\"name\":\"Legal India Admin\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.legalindia.com\/judgments\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/4faa9d728ed1af3b73d52225c7f12901ac726fe6f7ea0a3348a1d51f3a930987?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/4faa9d728ed1af3b73d52225c7f12901ac726fe6f7ea0a3348a1d51f3a930987?s=96&d=mm&r=g\",\"caption\":\"Legal India Admin\"},\"sameAs\":[\"https:\/\/www.legalindia.com\",\"https:\/\/x.com\/legaliadmin\"],\"url\":\"https:\/\/www.legalindia.com\/judgments\/author\/legal-india-admin\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"State Of Bihar vs Oriental Coal Co. Ltd on 6 October, 1971 - Free Judgements of Supreme Court & High Court | Legal India","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.legalindia.com\/judgments\/state-of-bihar-vs-oriental-coal-co-ltd-on-6-october-1971","og_locale":"en_US","og_type":"article","og_title":"State Of Bihar vs Oriental Coal Co. Ltd on 6 October, 1971 - Free Judgements of Supreme Court & High Court | Legal India","og_url":"https:\/\/www.legalindia.com\/judgments\/state-of-bihar-vs-oriental-coal-co-ltd-on-6-october-1971","og_site_name":"Free Judgements of Supreme Court & High Court | Legal India","article_publisher":"https:\/\/www.facebook.com\/LegalindiaCom\/","article_published_time":"1971-10-05T18:30:00+00:00","article_modified_time":"2018-06-24T12:41:54+00:00","og_image":[{"width":512,"height":512,"url":"https:\/\/i0.wp.com\/www.legalindia.com\/judgments\/wp-content\/uploads\/sites\/5\/2025\/09\/legal-india-icon.jpg?fit=512%2C512&ssl=1","type":"image\/jpeg"}],"author":"Legal India Admin","twitter_card":"summary_large_image","twitter_creator":"@legaliadmin","twitter_site":"@Legal_india","twitter_misc":{"Written by":"Legal India Admin","Est. reading time":"21 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.legalindia.com\/judgments\/state-of-bihar-vs-oriental-coal-co-ltd-on-6-october-1971#article","isPartOf":{"@id":"https:\/\/www.legalindia.com\/judgments\/state-of-bihar-vs-oriental-coal-co-ltd-on-6-october-1971"},"author":{"name":"Legal India Admin","@id":"https:\/\/www.legalindia.com\/judgments\/#\/schema\/person\/0bfdffe9059fb8bb24a86d094609c5ea"},"headline":"State Of Bihar vs Oriental Coal Co. Ltd on 6 October, 1971","datePublished":"1971-10-05T18:30:00+00:00","dateModified":"2018-06-24T12:41:54+00:00","mainEntityOfPage":{"@id":"https:\/\/www.legalindia.com\/judgments\/state-of-bihar-vs-oriental-coal-co-ltd-on-6-october-1971"},"wordCount":3320,"commentCount":0,"publisher":{"@id":"https:\/\/www.legalindia.com\/judgments\/#organization"},"articleSection":["Supreme Court of India"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/www.legalindia.com\/judgments\/state-of-bihar-vs-oriental-coal-co-ltd-on-6-october-1971#respond"]}]},{"@type":"WebPage","@id":"https:\/\/www.legalindia.com\/judgments\/state-of-bihar-vs-oriental-coal-co-ltd-on-6-october-1971","url":"https:\/\/www.legalindia.com\/judgments\/state-of-bihar-vs-oriental-coal-co-ltd-on-6-october-1971","name":"State Of Bihar vs Oriental Coal Co. Ltd on 6 October, 1971 - Free Judgements of Supreme Court & High Court | Legal India","isPartOf":{"@id":"https:\/\/www.legalindia.com\/judgments\/#website"},"datePublished":"1971-10-05T18:30:00+00:00","dateModified":"2018-06-24T12:41:54+00:00","breadcrumb":{"@id":"https:\/\/www.legalindia.com\/judgments\/state-of-bihar-vs-oriental-coal-co-ltd-on-6-october-1971#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.legalindia.com\/judgments\/state-of-bihar-vs-oriental-coal-co-ltd-on-6-october-1971"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/www.legalindia.com\/judgments\/state-of-bihar-vs-oriental-coal-co-ltd-on-6-october-1971#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.legalindia.com\/judgments\/"},{"@type":"ListItem","position":2,"name":"State Of Bihar vs Oriental Coal Co. Ltd on 6 October, 1971"}]},{"@type":"WebSite","@id":"https:\/\/www.legalindia.com\/judgments\/#website","url":"https:\/\/www.legalindia.com\/judgments\/","name":"Free Judgements of Supreme Court & High Court | Legal India","description":"Search and read the latest judgements, orders, and rulings from the Supreme Court of India and all High Courts. A comprehensive database for lawyers, advocates, and law students.","publisher":{"@id":"https:\/\/www.legalindia.com\/judgments\/#organization"},"alternateName":"Free judgements of Supreme Court & High Court of India | Legal India","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.legalindia.com\/judgments\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/www.legalindia.com\/judgments\/#organization","name":"Judgements of Supreme Court & High Court | Legal India","alternateName":"Legal India","url":"https:\/\/www.legalindia.com\/judgments\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.legalindia.com\/judgments\/#\/schema\/logo\/image\/","url":"https:\/\/www.legalindia.com\/judgments\/wp-content\/uploads\/sites\/5\/2025\/09\/legal-india-icon.jpg","contentUrl":"https:\/\/www.legalindia.com\/judgments\/wp-content\/uploads\/sites\/5\/2025\/09\/legal-india-icon.jpg","width":512,"height":512,"caption":"Judgements of Supreme Court & High Court | Legal India"},"image":{"@id":"https:\/\/www.legalindia.com\/judgments\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/www.facebook.com\/LegalindiaCom\/","https:\/\/x.com\/Legal_india"]},{"@type":"Person","@id":"https:\/\/www.legalindia.com\/judgments\/#\/schema\/person\/0bfdffe9059fb8bb24a86d094609c5ea","name":"Legal India Admin","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.legalindia.com\/judgments\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/4faa9d728ed1af3b73d52225c7f12901ac726fe6f7ea0a3348a1d51f3a930987?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/4faa9d728ed1af3b73d52225c7f12901ac726fe6f7ea0a3348a1d51f3a930987?s=96&d=mm&r=g","caption":"Legal India Admin"},"sameAs":["https:\/\/www.legalindia.com","https:\/\/x.com\/legaliadmin"],"url":"https:\/\/www.legalindia.com\/judgments\/author\/legal-india-admin"}]}},"modified_by":null,"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_likes_enabled":true,"jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/posts\/10632","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/comments?post=10632"}],"version-history":[{"count":0,"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/posts\/10632\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/media?parent=10632"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/categories?post=10632"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/tags?post=10632"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}