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PETITIONER: DEVILAL MODI, PROPRIETOR, M/S.  DALURAM   PANNALAL MODI

       Vs.

RESPONDENT: SALES TAX OFFICER, RATLAM AND OTHERS

DATE OF JUDGMENT: 07/10/1964

BENCH: GAJENDRAGADKAR, P.B. (CJ) BENCH: GAJENDRAGADKAR, P.B. (CJ) WANCHOO, K.N. HIDAYATULLAH, M. DAYAL, RAGHUBAR MUDHOLKAR, J.R.

CITATION:  1965 AIR 1150            1965 SCR  (1) 686  CITATOR INFO :  R          1965 SC1153  (5,57)  RF         1977 SC1680  (7)

ACT: Practice-Principle    of    constructive    res    judicata- Applicability to writ petitions.

HEADNOTE: The  appellant  was assessed to sales tax and the  order  of assessment  was  challenged by a writ petition in  the  High Court.   The  High  Court  dismissed  the  petition  and  he appealed to the Supreme Court.  At the bearing of the appeal additional contentions were sought to be raised.  The appeal was  dismissed  and  the  additional  contentions  were  not permitted  to be raised.  Thereupon, he filed  another  writ petition   in  the  High  Court  raising  those   additional contentions and challenging the order of assessment for  the same year.  The High Court dismissed the petition on merits. On appeal to the Supreme Court, HELD  : The appeal should be dismissed as the  principle  of constructive   res   judicata   is   applicable   in   these circumstances. [692 E-F]. Though the courts dealing with questions of infringement  of fundamental  rights  must consistently endeavor  to  sustain them  and  strike down their unconstitutional  invasion,  it would  not be right to ignore the principle of res  judicata altogether  in dealing with writ petitions.   Considerations of  public policy and the basic doctrine that  judgments  of competent  courts  are  final and  binding  as  between  the parties must receive due consideration. [691 C-E]. The  Amalgamated  Coal Fields Ltd. & Anr.  v.  The  Janapada Sabha, Chhindwara, [1963] Supp. .1 S.C.R. 172, explained.

JUDGMENT: CIVIL APPELLATE JURISDICTION : Civil Appeal No. 249 of 1964. Appeal  by special leave from the judgment and  order  dated April  29, 1963, of the Madhya Pradesh High Court  in  Misc.

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Petition No. 129 of 1963. U.   M.  Trivedi,  R.  C.  Koohatta, S.  C.  Dafria,  S.  S. Khanduja, S.   K. Manchanda and Ganpat Rai, for the appellant. B. Sen and I. N.  Shroff, for the respondents. The Judgement of the Court was delivered by Gajendragadkar  C.J.  The short question which  this  appeal raises  for  our  decision  is  whether  the  principle   of constructive  res  judicata can be invoked  against  a  writ petition  filed  by the appellant Devilal Modi, who  is  the Proprietor of M/s.  Daluram Pannalal Modi, under Art. 226 of the Constitution.  The appellant has been assessed to sales- tax for the year 1957-58 under  687 the  Madhya Bharat Sales Tax Act, 1950.  He  challenged  the validity of the said order of assessment by a writ  petition filed  by  him (No. 114/1961) in the High  Court  of  Madhya Pradesh  on the 25th April, 1961.  The High Court  dismissed his  writ petition and by special leave, the appellant  came to  this  Court in appeal against the said decision  of  the High Court.  On the 8th March, 1963, the appellant’s  appeal by special leave was dismissed by this Court. Thereafter, the appellant filed the present writ petition in the same High Court on the 23rd April, 1963 (No.  129/1963). By this writ petition the appellant challenges the  validity of  the  same  order  of assessment.   The  High  Court  has considered the merits of the additional grounds urged by the appellant  on this occasion and has rejected them.   In  the result, this second writ petition filed by the appellant has been  dismissed by the High Court on the 29th  April,  1963. It  is against this decision that the appellant has come  to this Court by special leave; and that raises the question as to  whether  it is open to the appellant  to  challenge  the validity  of  the  same order of  assessment  twice  by  two consecutive writ petitions under Art. 226. It appears that the Madhya Bharat Sales Tax Act, 1950, under which the impugned order of assessment against the appellant to  pay sales-tax for the year 1957-58 has been passed,  was repealed  by the Madhya Pradesh General Sales Tax Act,  1958 on  the 1st April, 1959.  It was on the 31st December,  1960 that  a notice was issued to the appellant by the  Assistant Commissioner  of Sales Tax under the 1958 Act.  This  notice recited  that the Assistant Commissioner was satisfied  that the appellant’s sales during the period from 1-4-1957 to 31- 3-1958 had escaped assessment and thereby the appellant  had rendered  himself liable to be reassessed under s. 19(1)  of the   Act.   Pursuant  to  this  notice,  fresh   assessment proceedings were started against the appellant in respect of the  sales in the year 1957-58, and as a result of the  said proceedings,  an order was passed on the 31st  March,  1961, imposing an additional tax on the appellant to the extent of Rs.  31,250  for the year in question and a penalty  of  Rs. 15,000.   It  is this order which is the  subject-matter  of both the writ petitions. In his first writ petition, the appellant had  substantially raised  two contentions.  He had urged that though S. 30  of the Act had made provision for the delegation of the  duties of  the  Commissioner, in fact by his order  passed  by  the Commissioner  in  pursuance of the said  authority,  he  had delegated to the Assistant 688 Commissioner his power under S. 19, but not his duties;  and the  said delegation, therefore, made the proceedings  taken by  the  Assistant Commissioner invalid in law.   The  other contention  raised by the appellant against the validity  of

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the said order was that it was in respect of sales which had been  assessed  earlier under the Act of 1950 and  the  same could  not  be reassessed under the subsequent Act.   It  is true that the said earlier assessment had been  subsequently cancelled  by  an order made under s. 39(2) of  the  Act  of 1958; but it was argued that the said order of  cancellation was itself invalid.  Both these contentions were rejected by this Court, with the result that the appeal preferred by the appellant was dismissed with costs. It  appears  that at the hearing of the appeal  before  this Court,  Mr.  Trivedi for the appellant sought to  raise  two additional points, but he was not permitted to do so on  the ground that they had not been specified in the writ petition filed  before the High Court and had not been raised  at  an earlier stage.  While refusing permission to Mr. Trivedi  to raise  the  said  points, this Court  indicated  what  these points  were.  The first of these two points was that  under S.  19(1)  of  the  1958  Act  only  those  sales  could  be reassessed  which were chargeable to tax under that Act  and the  sales brought to tax under the impugned order  were  in respect of sale of sugar, a commodity the sale of which  was not chargeable under the Act.  The other point was that  the penalty which had been imposed against the appellant by  the impugned  order under s. 14 of the Act of 1950  was  illegal inasmuch as the said Act had been repealed and the right  to impose  a penalty under it had not been saved by the  saving section  52 of the 1958 Act.  Since this Court  had  refused permission  to  Mr. Trivedi to raise  these  two  additional grounds, it was observed in the course of the judgment  that the Court did not express any opinion as to their tenability on the merits. The  present writ petition raises these two contentions  and as  we have already indicated, the High Court  has  examined them  on the merits and has rejected them.  That is how  the question which arises for our decision is, is it permissible to  the appellant to attack the validity of the  same  order imposing a sales-tax and penalty on him for the year 1957-58 by two consecutive writ petitions ?  In other words, is  the principle  of constructive res judicata applicable  to  writ petitions of this kind or not ? Mr. Trivedi for the appellant has strenuously contended that where  a  citizen seeks for redress from the High  Court  by invoking  its high prerogative jurisdiction under Art.  226, it would be  689 inappropriate  to  invoke  the  principle  of  res  judicata against  him.   What the appellant contends is that  he  has been exposed to the risk of paying a large amount by way  of sales-tax  and penalty when the said liability has not  been lawfully incurred by him and the impugned order is  contrary to  law.   It is a case of deprivation of  property  of  the citizen  contrary to law, and the High Court should allow  a citizen who feels aggrieved by an illegal order to challenge the  validity  of the impugned order even by a  second  writ petition as he has sought to do in the present case. There can be no doubt that the fundamental rights guaranteed to   the   citizens  are  a  significant  feature   of   our Constitution and the High Courts under Art. 226 are bound to protect  these  fundamental rights.  There can  also  be  no doubt  that  if a case is made out for the exercise  of  its jurisdiction  under  Art.  226 in  support  of  a  citizen’s fundamental  rights,  the High Court will  not  hesitate  to exercise that jurisdiction.  But the question as to  whether a citizen should be allowed to challenge the validity of the same order by successive petitions under Art. 226, cannot be

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answered  merely  in  the  light  of  the  significance  and importance of the citizens’ fundamental rights.  The general principle  underlying  the  doctrine  of  res  judicata   is ultimately  based on considerations of public  policy.   One important  consideration  of  public  policy  is  that   the decisions  pronounced  by courts of  competent  jurisdiction should  be  final, unless they are modified or  reversed  by appellate  authorities; and the other principle is  that  no one should be made to face the same kind of litigation twice over,   because  such  a  process  would  be   contrary   to considerations  of fair play and justice, vide : Daryao  and Others v. The State of U.P. & Others.(1). It may be conceded in favour of Mr. Trivedi that the rule of constructive  res judicata which is pleaded against  him  in the  present  appeal is in a sense a somewhat  technical  or artificial  rule prescribed by the Code of Civil  Procedure. This rule postulates that if a plea could have been taken by a  party  in a proceeding between him and his  opponent,  he would  not be permitted to take that plea against  the  same party in a subsequent proceeding which is based on the  same cause of action; but basically, even this view is founded on the  same  considerations of public policy, because  if  the doctrine of constructive res judicata is not applied to writ proceedings,  it  would  be open to the party  to  take  one proceeding after another and urge new grounds every (1)  [1962] 1 S.C.R. 574. 690 time;  and that plainly is inconsistent with  considerations of public policy to which we have just referred. In  regard to orders of assessment for different years,  the position  may  be different.  Even if the  said  orders  are passed   under   the  same  provisions  of   law,   it   may theoretically  be  open  to the party to  contend  that  the liability  being recurring from year to year, the  cause  of action is not the same; and so, even if a citizen’s petition challenging  the order of assessment passed against him  for one  year is rejected, it may be open to him to challenge  a similar assessment order passed for the next year.  In  that case, the court may ultimately adopt the same view which had been adopted on the earlier occasion; but if a new ground is urged,  the  court may have to consider it  on  the  merits, because,  strictly, speaking the principle of  res  judicata may not apply to such a case.  That, in fact, is the  effect of the decision of this Court in The Amalgamated  Coalfields Ltd. and Anr. v. The Janapada Sabha, Chhindwara(1).  In that case, this Court had occasion to consider the question about the   applicability   of  constructive   res   judicata   to proceedings   taken  by  the  appellant,   the   Amalgamated Coalfields  Ltd., challenging the tax levied against it  for different  periods.   The  petition first filed  by  it  for challenging  the validity of the tax imposed against it  for one  year  was dismissed by this Court  in  The  Amalgamated Coalfields Ltd. & Anr. v. The Janapada Sabha, Chhindwara(2). At  the time when the appeal of the  Amalgamated  Coalfields Ltd.  was argued before this Court, some new points  of  law were sought to be raised, but this Court did not allow  them to be raised on the ground that they should have been raised at  an  earlier  stage.  When a  similar  order  was  passed against  the  said Company for a subsequent year,  the  said additional points’ were raised by it in its petition  before the High Court.  The High Court held that it was not open to the  Company  to  raise  those  points  on  the  ground   of constructive  res judicata; and that brought the Company  to this Court in appeal by special leave.  This Court held that the  Court  was in error in holding that  the  principle  of

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constructive res judicata precluded the Company from raising the said points.  Accordingly, the merits of the said points were  considered and in fact, the said points  were  upheld. In  dealing with the question of constructive res  judicata, this  Court observed that constructive res judicata  was  an artificial form of res judicata enacted by S. 11 of the Code of Civil Procedure and it should not be generally applied to writ petitions filed under Art. 32 or (1) [1963] Supp.  I S.C.R. 172. (2) [1962] 1 S.C.R. 1.  691 Art.  226.  It was in that connection that this  Court  also pointed out that the appeal before the Court was in relation to an assessment levied for a different year, and that  made the  doctrine  of  res judicata  itself  inapplicable.   Mr. Trivedi  contends  that in dealing with writ  petitions,  no distinction should be made between cases where the  impugned order  of assessment is in respect of the same year  or  for different  years;  and  in support of  this  contention,  he relied on the general observations made by this Court in The Amalgamated  Coalfields Ltd. case(1).  In our  opinion,  the said  general observations must be read in the light of  the important  fact that the order which was challenged  in  the second  writ petition was in relation to a different  period and  not for the same period as was covered by  the  earlier petition. As we have already mentioned, though the courts dealing with the questions of the infringement of fundamental rights must consistently endeavor to sustain the said rights and  should strike down their unconstitutional invasion, it would not be right to ignore the principle of res judicata altogether  in dealing  with writ petitions filed by citizens alleging  the contravention  of their fundamental rights.   Considerations of  public policy cannot be ignored in such cases,  and  the basic  doctrine that judgments pronounced by this Court  are binding and must be regarded as final between the parties in respect  of  matters  covered  by  them,  must  receive  due consideration. The  result  of the decision of this Court  in  the  earlier appeal  brought  by  the appellant before it  is  clear  and unambiguous  and  that is that the appellant had  failed  to challenge the validity of the impugned order which had  been passed by the Assistant Commissioner against him.  In  other words,  the effect of the earlier decision of this Court  is that  the  appellant is liable to pay the  tax  and  penalty imposed  on him by the impugned order.  It would, we  think, be  unreasonable  to suggest that after  this  judgment  was pronounced  by  this Court, it should still be open  to  the appellant  to  file a subsequent writ  petition  before  the Madhya  Pradesh High Court and urge that the  said  impugned order was invalid for some additional grounds.  In case  the Madhya  Pradesh High Court had upheld these contentions  and had given effect to its decision, its order would have  been plainly  inconsistent  with  the earlier  decision  of  this Court,  and  that would be inconsistent  with  the  finality which must attach to the decisions of this Court as  between the  parties  before  it in respect  of  the  subject-matter directly covered by the said decision.  Considerations (1)  [1963] Supp.  1 S.C.R. 172. 692 of  public  policy  and the principle  of  the  finality  of judgments are important constituents of the rule of law  and they cannot be allowed to be violated just because a citizen contends  that his fundamental rights have been  contravened by  an  impugned  order and wants  liberty  to  agitate  the

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question  about  its validity by filing  one  writ  petition after another. The  present  proceedings illustrate how a citizen  who  has been  ordered to pay a tax can postpone the payment  of  the tax  by prolonging legal proceedings interminably.  We  have already  seen that in the present case the appellant  sought to raise additional points when he brought his appeal before this Court by special leave; that is to say, he did not take all  the points in the Writ petition and thought  of  taking new points in appeal.  When leave was refused to him by this Court  to  take  those  points in appeal,  he  filed  a  new petition  in  the  High Court and  took  those  points,  and finding  that the High Court had decided against him on  the merits of those points, he has come to this Court; but  that is  not  all.  At the hearing of this appeal, he  has  filed another  petition asking for leave from this Court  to  take some   more  additional  points  and  that  shows  that   if constructive res judicata is not applied to such proceedings a party can file as many writ petitions as he likes and take one  or two points every time.  That’ clearly is opposed  to considerations  of  public policy on which res  judicata  is based  and  would  mean  harassment  and  hardship  to   the opponent.   Besides,  if  such a course  is  allowed  to  be adopted, the doctrine of finality of judgments pronounced by this  Court  would  also be materially  affected.   We  are, therefore, satisfied that the second writ petition filed  by the appellant in the present case is barred by  constructive res judicata. The  result is, the appeal fails and is,  dismissed.   There would, however, be no order as to costs. Appeal dismissed. 693