http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 5  

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. ^

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 5  

    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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 5  

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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 5  

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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 5  

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.