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PETITIONER: DHULABHAI AND OTHERS

       Vs.

RESPONDENT: THE STATE OF MADHYA PRADESH AND ANOTHER

DATE OF JUDGMENT: 05/04/1968

BENCH: HIDAYATULLAH, M. (CJ) BENCH: HIDAYATULLAH, M. (CJ) BACHAWAT, R.S. VAIDYIALINGAM, C.A. HEGDE, K.S. GROVER, A.N.

CITATION:  1969 AIR   78            1968 SCR  (3) 662  CITATOR INFO :  R          1970 SC1298  (9)  R          1971 SC  71  (7)  RF         1971 SC 530  (233,239,387)  R          1971 SC1558  (19)  RF         1975 SC2238  (22)  E          1977 SC 955  (12,14,16,20,24)  R          1978 SC1217  (25)  R          1981 SC2016  (8,10)  R          1986 SC 794  (8,12,13,14)  R          1987 SC2205  (13)  RF         1988 SC 752  (10)  R          1990 SC 255  (4,5)  RF         1991 SC1094  (6)

ACT: Madhya Bharat Sales Tax Act (30 of 1950), s. 17-Jurisdiction of civil court barred-Scope of the bar.

HEADNOTE: By  Notifications issued by the State Government under s.  5 of  the  Madhya  Bharat Sales Tax  Act  1950  sales-tax  was imposed  and  collected  from the  appellants.   They  filed suits,  for  refund  of the tax on the ground  that  it  was illegally   collected   from   them   being   against    the constitutional  prohibition in Art. 301 and not saved  under Art.  304(a).  In Bhailal v. State of M.P.  (1960)  M.P.L.J. 6011, the petitioner therein challenged in a writ  petition, the levy of sales tax on the same grounds and the High Court declared  the notifications to be offensive to Art. 301  and held  that  ,the imposition of tax was  illegal.   Following that  decision, the trial court decreed the suits  filed  by the  appellants.   In appeal before the High  Court  it  was conceded  by the State that the tax could not be imposed  in view  of Art. 301, but it was contended that the suits  were not maintainable in view of s. 17 of the Act which  provides that  no  assessment made under the Act shall be  called  in question  in any court.  The High Court held that the  suits were incompetent. In appeal to this Court,

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HELD: The suits were maintainable. [684 D] An enquiry into the diverse views expressed in the decisions of this Court shows that an exclusion of the jurisdiction of civil  court  is  not  readily to  be  inferred  unless  the following conditions apply : (1)  Where the statute gives a finality to the orders of the special  tribunals  the civil court’s jurisdiction  must  be held  to be excluded if there is adequate remedy to do  what the  civil  courts  would  normally  do  in  a  suit.   Such provision,  however, does not exclude those cases where  the provisions of the particular Act have not been complied with or  the statutory tribunal has not acted in conformity  with the fundamental principles of judicial procedure. [682  A-C; 683 C] Secretary  of  State v. Mask [1940] L.R. 67 I.A.  222;  Firm Illuri  Subbayya Chetty & Sons v. State of  Andhra  Pradesh, [1964]  1 S.C.R. 752 and Kerala v. Ramaswami Iyer and  Sons, [1966] 3 S.C.R. 582. In  Firm  Illuri Subbayya Chetty & Sons’ case  the  assessee conceded  that  the tax was payable and did  not  raise  the issue  before the appellate authorities under the Act.   The suit  for refund of tax was held not maintainable  on  those special  facts,  with reference to the addition  of  s.  18A excluding  the jurisdiction of civil court and  the  special remedies  provided in ss. 12A to 12D in the  Madras  General Sales Tax Act, 1939.  This Court, however, did not think  it necessary   to  pronounce  any  opinion  on   the   Judicial Committee’s  view in the Raleigh Investment Co. case  [1947] L.R. 74 I.A. 50) that even the vires of the provisions could be  considered by the Tribunals constituted under  the  Act. Dealing with Mask & Co.’s case, it was pointed out that non- compliance  with  the provisions of the statute  meant  non- compliance with such fundamental                             663 provisions   of  the  statute  as  would  make  the   entire proceedings  before  the appropriate authority  illegal  and without jurisdiction. [679 G-H; 680 B-D] (2)  Where  there is an express bar of the  jurisdiction  of the  an examination of the scheme of the particular  Act  to find  the  adequacy  or  the  sufficiency  of  the  remedies provided may be relevant but is not decisive to sustain  the jurisdiction of the civil court. [682 D] Where  there is no express exclusion the examination of  the remedies  and the scheme of the particular Act to  find  out the  intendment  becomes  necessary and the  result  of  the inquiry  may  be  decisive.   In  the  latter  case,  it  is necessary to see if the statute creates a special right or a liability and provides for the determination of the right or liability and further lays down that all questions about the said  right  and  liability  shall  be  determined  by   the tribunals  so  constituted, and  whether  remedies  normally associated  with actions in civil courts are  prescribed  by the said statute or not. [682 D-F] In  Provincial Government v. J. S. Basappa, [1964] 5  S.C.R. 517  it  was  held that the  civil  court  had  jurisdiction because, at the relevant time, (a) the Madras General  Sales Tax  Act,  1939, did not have s. 18A (which  was  introduced later barring the jurisdiction of civil court) (b). the  Act did  not  have the elaborate machinery for  adequate  remedy which  was  also  introduced  later, and  (c)  the  tax  was illegally  collected ignoring the fundamental provisions  of the Act.  Therefore, the observation in Kerala v.  Ramaswami Iyer & Sons that Basappa’s case was wrongly decided is  open to doubt. [678 D, H] M/s.  Kamala Mills Ltd. v. State of Bombay, [1966] 1  S.C.R.

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64  was a decision of a Special Bench holding that s. 20  of the  Bombay Sales Tax Act 1946 excluded the jurisdiction  of the civil court in suits for refund of tax, in cases,  where the decision of the authorities under the Act was merely  an error in assessment capable of correction by the usual  pro- cedure of appeals etc.  But the Bench observed, that in such cases, where the jurisdiction of the civil court is  barred- by  providing an adequate machinery in the Act,  it  becomes ’pertinent  to enquire whether remedies normally  associated with actions in civil court are prescribed by the statute or not’,  and thus expressly left open the question as  to  how far  the  bar  would operate in  cases  where  the  charging provision is ultra vires. [681 A-B, G-. 684 C-D] (3)  Challenge  to the provisions of the particular  Act  as ultra  vires cannot be brought before Tribunals  constituted under  that Act.  Eve,, the High Court cannot go  into  that question on a revision or reference from the decision of the Tribunals. [682 F-G] K.   S.  Venkataraman  v. State of Madras, [1966]  2  S.C.R. 229;  Deputy  Commercial Tax Officer,  Madras  v.Rayalaseema Constructions, 17 S.T.C. 505; Circo’s Coffee Co. v. State of Mysore, 19 S.T.C. 66 (S.C.); C. T. Senthulnathan Chettiar v. Madras,  (C.A.  1045  of 1966. dated 20th  July,  1967)  and Pabojan Tea Co. Ltd. v. Dy.  Commissioner, Lakhimpur, [1968] 1 S.C.R. 260; A.I.R. 1968 S.C. 271. (4)  When  a provision is already declared  unconstitutional or   the  constitutionality  of  any  provision  is  to   be challenged,  a  suit  is open.  A  writ  of  certiorari  may include  a  direction  for refund if the  claim  is  clearly within  the time prescribed by the Limitation Act but it  is not a compulsory remedy to replace a suit. [682 G-H] In  State  of  M.P. v. Bhailal, [1964] 6  S.C.R.  261  which confirmed  the  decision  in 1960 M.P.L.J.  601  this  Court upheld  the  order of refund by the High Court in  its  writ jurisdiction   held  that  in  cases  where  a  defence   of limitation  was open or other facts had to be  decided,  the order of 664 refund  was not proper, and accepted the proposition that  a suit lay in’ such cases without adverting to, the provisions of  the Act to see whether the jurisdiction of  civil  court was  barred  either expressly or by  necessary  implication. Therefore, this case cannot be an authority for holding that the-  civil court has jurisdiction to entertain such  suits. [668] (5)  Where  the  particular Act contains  no  machinery  for refund of,, tax collected in excess of constitutional limits or illegally collected a suit lies. [683 A] Bharat  Kala Bhandar Ltd. v. Municipal Council,  Dhamangaon, [1965] 3 S.C.R. 499. (6)  Questions  of the correctness of the  assessment  apart from  its  constitutionality  are for the  decision  of  the authorities  and a civil suit,does not lie if the orders  of the  authorities  are declared to be final or  there  is  an express prohibition in the particular Act.  In either  case, the scheme of the particular Act must be examined because it is a relevant enquiry. [6 83 B] In the present case, though the Madhya Bharat Sales Tax  Act contains ,Provisions for appeal, revision, rectification and reference to the High ,Court, the notifications having  been rightly  declared void in the earlier -decision of the  High Court, the appellants could take advantage of the fact  that tax  was levied without a complete charging section.   Since the  tax  authorities could not even proceed to  assess  the party  their  jurisdiction was affected and  the  case  fell

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within  categories (3) and (4) above, ,and not  in  category (2). [684 A-C]

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 260 to  263 -of 1967. Appeals  from the judgment and decree dated January 5,  1965 of the Madhya Pradesh High Court, Indore Bench in First  Ap- peals Nos. 68, 69, 71 and 70 of 1961 respectively. M . C. Setalvad, Rameshwar Nath and Mahinder Narain, for the appellants (in all the appeals). B.   Sen  and I. N. Shroff, for the respondents (in all  the appeals). The Judgment of the Court was delivered by Hidayatullah,  C.J.  These are four appeals  by  certificate against  the  common judgment of the High  Court  of  Madhya Pradesh  (Indore Bench), 16 December, 1964/5  January,  1965 -dismissing  four suits filed by the appellants  to  recover sales-tax alleged to be realized illegally from them by  the State  of Madhya, Pradesh, the respondent in these  appeals. The  suits  were  earlier decreed  by  the  District  Judge, Ujjain.   The  facts  in the suits are common  and  were  as follows: The appellants are dealers in tobacco and have their  places of business at Ujjain.  They purchase and sell tobacco  used for eating, smoking and for preparing bidis. They get  their tobacco  locally or import it from extra-state places.   The former Madhya Bharat State enacted in 1950 the Madhya Bharat Sales Tax Act (Act 30 of 1950) which came into force on  May 1, 1950.  Under                             665 s.   3  of  the  Act  every dealer  whose  business  in  the previous  year  in  respect of sales or  supplies  of  goods exceeded  in the case of an, importer and  manufacturer  Rs. 5,000  and  in  other cases Rs. 12,000 had  to  pay  tax  in respect  of  sales or supplies of goods effected  in  Madhya Bharat from 1st May 1950.  Under s. 5, the: tax was a single point tax and it was provided that the Government might by a notification specify the point of the sales at which the tax was payable.  The section also fixed the minimum and maximum rates  of tax leaving it to Government to notify the  actual rate. Government, in pursuance of this power, issued a number,. of notifications  on April 30, 1950, May 22, 1950, October  24, 1953 and January 21, 1954.  All these notifications  imposed tax  at  different rates on tobacco above described  on  the importer,  that is to say at the point of import.   The  tax was  not  levied on sale or purchase of tobacco  of  similar kind  in  Madhya  Bharat.   The tax  was  collected  by  the authorities  in  varying  amounts from  the  appellants  for different quarters.  We are not concerned with the, amounts. The  appellants  served notices under s. 80 of the  Code  of Civil  Procedure and filed the present suits for  refund  of the  tax on the ground that it was illegally collected  from them  being against the constitutional prohibition  in  Art. 301 and not saved under Art. 304(a) of the Constitution. The State of Madhya Pradesh was formed on November, 1, 1955. In  Bhailal  v.  M.P.(1) the High Court  of  Madhya  Pradesh declared  the notifications to be offensive to Art.  301  of the Constitution on the ground that it was illegal to levy a tax  on  the importer when an equal tax was  not  levied  on similar goods produced in the State.  The decision was later confirmed on this point in State of M.P. v. Bhailal Bhai(2).

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The  appellants did not take, recourse to the provisions  of Art.  226  of  the Constitution but  filed  their  suits  on December 21, 1957. The suits were opposed by the State on the main ground  that such a suit was barred by the provisions of s. 17 of the Act which provides :               "17.   Bar to certain proceedings.-Save as  is               provided  in S. 13, no assessment made and  no               order passed under this Act or the rules  made               thereunder   by   the   assessing   authority,               appellate authority or the Commissioner  shall               be  called in question in any Court, and  save               as is provided-in sections 11 and 12 no appeal               or application for revision shall lie  against               any such assessment or order." The   State  also  pleaded  that  as  appeals  against   the assessment  were pending before the Sales Tax  Appeal  Judge the plaintiffs        were (1) 1960 M. P. L. J. 601. (2) [1964] 6 S.C. R. 261. 666 not  entitled  to  file  the  suits.   The  District  Judge, following State of Tripura v. The Province of East Bengal(1) and  Bhailal Bhai Gokal Bhai v. State of M.P.(2), held  that such  a  suit  lay when a declaration was  sought  that  the provisions  of  law  relating to an  assessment  were  ultra vires,  and demand was made for refund of amounts  illegally collected under it.  On the second point the District  Judge held that s. 21 of the Act which allows the Commissioner  or the appellate authority to order refund of tax wrongly  paid did  not apply since no such appeal was proved to have  been filed  and  the tax was not wrongfully paid  but  wrongfully realised. On appeal by the State the High Court reversed the decision. Before  the  High Court it was conceded (as it  is  conceded even  now) that the tax could not be imposed in view of  the bar  of Art. 301.  The short question thus was  whether  the suit  was  barred  expressly  by s. 17 of  the  Act  or  any implication arising from the Act.  The contention on  behalf of  the  appellants  was that if it was a  question  of  the correctness of the imposition within the valid framework  of the  statute,  rules  or  notifications  S.  17  might  have operated  but not when the imposition was under a void  law. In  the latter event the assessee was free to challenge  the validity  of  the law in a civil suit and also  to  claim  a refund. The  High  Court considered the matter in the light  of  the decisions  of the Judicial Committee in  Raleigh  Investment Co. v. Governor General in Council(3), Secretary of State v. Mask(4),Firm  I.  S.  Chetty  &  Sons  v.  State  of  Andhra Pradesh(5),  State  of  Andhra Pradesh v.  Firm  Subbayya  & Sons(6),  and  others, and came to the conclusion  that  the suit  was  incompetent.  The High Court conceded  that  both aspects  of the case were well supported by, authority.   It is  not  necessary to enter into the reasons  which  weighed with  the  High Court because our discussion of  the  autho- rities in this judgment will clearly expose the rival  views and the one preferred in the High Court. The  question that arises in these appeals has  been  before this  Court  in  relation to other  statutes  and  has  been answered  in  different ways.  These appeals went  before  a Divisional Bench of this Court but in view of the difficulty presented  by the earlier rulings of this Court,  they  were referred to the Constitution Bench and that is how they  are before  us.   At  the very start we  may  observe  that  the

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jurisdiction of the Civil Courts is all embracing except  to the extent it is excluded by an express. provision of law or by  clear  intendment arising from such law.   This  is  the purport of (1)  A. 1. R. 1951 S. C. 23. (3)  [1947] L. R. 74 1, A. 50; A. 1. R. 1947 P. C. 78. (4)  [1940] L. R. 67 1. A. 222; A. 1. R. 1940 P. C. 105. (5)  [1964] 1 S. C. R. 752; A. 1. R. 1964 S. C. 322. (6) A. 1. R. 1958 Mad. 544 (F.  B.). (2) 1960 M.P.L.J. 601.                             667 s.   9 of the Code of Civil Procedure.  How s. 9 operates is perhaps  best illustrated by referring to the categories  of cases,   mentioned  by  Willes,  J.  in  Wolverhampton   New Waterworks co. v. Hawkesford(1)-They are :               "One  is where there was a liability  existing               at common law, and that liability is  affirmed               by  a  statute  which  gives  a  special   and               peculiar  form  of remedy different  from  the               remedy  which  existed at common  law:  there,               unless   the  statute  contains  words   which               expressly or by necessary implication  exclude               the common law remedy the party suing has  his               election   to  pursue  either  that   or   the               statutory  remedy.  The second class of  cases               is,  where the statute gives the right to  sue               merely,  but provides, no particular  form  of               remedy : there, the party can only proceed  by               action  at common law.  But there is  a  third               class, viz., where a liability not existing at               common  law is created by a statute  which  at               the  same time gives a special and  particular               remedy  for  enforcing it........  The  remedy               provided  by the statute must be followed  and               it is not competent to the party to pursue the               course  applicable  to  cases  of  the  second               class." This  view of Willes, J. was accepted by the House of  Lords Neville v. London ’Express’ Newspaper, Ltd.(2). To  which category do such cases belong in India ? The  con- troversy in India has revolved round the principles accepted in Secretary of State v. Mask (3 ) and in Raleigh Investment Co. v. Governor General in Council(4).  In the first case it was  laid down by the Judicial Committee that the ouster  of the  jurisdiction  of  a Civil Court is not  to  be  lightly inferred and can only be established if there is an  express provision of law or is clearly implied.  In the second  case it  was  held that where a liability to tax  is  created  by statute which gives special and particular remedies  against illegal  exactions  the remedy contemplated by  the  statute must  be  followed  and it is not open to  the  assessee  to pursue the ordinary process of Civil Courts.  To the  latter case  we shall refer in some detail presently.   Opinion  in this  Court has, however, wavered as to how far to  go  with the dicta of the Privy Council in the two cases.  Before,  however, we go into the question we may  refer  to State of M.P. v. Bhailal(5).  In that case the notifications were  declared ultra vires Article 301 of  the  Constitution and  not saved by Art. 304(a).  It was therefore  held  that the  portion  of the tax already paid must  be  refunded  by Government.  The question then posed was: (1) [1859] 6 C. B. (NS) 336. (2) [1919] A.C. 368. (2) [1940] 67 I. A. 222. (4) [1947] 74 I. A. 50.

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(5) [1964] 6 S. C. R. 261. 668               "The   question  is  whether  the  relief   of               repayment  has to be sought by the  ’tax-payer               by an action in a civil court or whether  such               an order can be made by the High Court in  the               exercise of its jurisdiction conferred by Art.               226 of the Constitution 2" This  Court after examining the jurisdiction under Art.  226 concluded that the High Court had the power to order  refund in proceedings for a writ since complete relief could not be said  to  be given if only a declaration  were  given.   The Court, however,observed :               "At the same time we cannot lose sight of  the               fact  that  the  special  remedy  provided  in               Article  226  is  not  intended  to  supersede               completely the modes of obtaining relief by an               action  in a civil court or to  deny  defences               legitimately open in such actions." Pointing  out  that where a defence of limitation  could  be raised or other issues of fact had to be tried, it was  held that the Court should leave the party aggrieved to seek  his remedy  by the ordinary mode of a civil suit.  Therefore  in those cases (there were 31 appeals before this Court)  where the writ was asked for within three years, this Court upheld the  order  of  refund  by  the  High  Court  in  its   writ jurisdiction,  but in those cases in which the  parties  had gone  to the High Court after a lapse of 3 years, the  order of refund was questioned and not approved observing that the petitioners would be at liberty to seek such relief as  they might  be entitled to in a Civil Court if it was not  barred by limitation. It  will  appear from this analysis of the  case  that  this Court  :accepted the proposition that a suit lay.   This  it did  without  adverting to the provisions of the  Act  there considered  to  see whether the jurisdiction  of  the  Civil Courts  was barred or not, either expressly or by  necessary implication.   This  Court was, of course, "not  invited  to express  its opinion on the matter but only on  whether  the High  Court  in its extraordinary jurisdiction  could  order refund  of  tax paid under a mistake.  Having held  that  in some  cases  the High Court should not  order  refund,  this Court  merely pointed out that the civil suit would  be  the only  other  remedy  open to the party.   The  case  cannot, therefore, be treated as an authority to hold that the Civil Courts had jurisdiction to entertain such suits. We  may now proceed to consider first the two cases  of  the Judicial  Committee before examining the position under  the rulings of this Court.  In Secretary of State v. Mask(1) the sole  question  was the jurisdiction of the civil  court  to entertain a suit to (1)  [1940] L. R. 67 1. A. 222.  669 recover an excess amount of customs duty collected from Mask and Co. The suit was filed after an appeal to the  Collector of  Customs and a revision taken to the Government of  India under  the Land Customs Act, 1924 was dismissed.   The  suit was dis missed by the trial Judge on the preliminary  ground that the Civil Court had no jurisdiction.  An appeal by Mask and Co. to the  High Court succeeded and there was a  remit. The appeal to the Judicial Committee followed.  Section 1.88 of the Land Customs Act, 1924 provided inter alia               "Every  order  passed  in  appeal  under  this               section   shall,  subject  to  the  power   of               revision conferred by S. 191, be final."

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             The  Judicial Committee first made  a  general               observation               "It  is settled law that the exclusion of  the               jurisdiction of the Civil Courts is not to  be               readily inferred, but that such exclusion must               either  be  explicitly  expressed  or  clearly               implied.  It is also well settled that even if               jurisdiction is so excluded, the Civil  Courts               have jurisdiction to examine into cases  where               the  provisions  of  the  Act  have  not  been               complied  with, or the statutory tribunal  has               not  acted in conformity with the  fundamental               principles of judicial procedure."               Then  it proceeded to quote s. 188 (as  above)               and observed               "By  Ss.  188  and 191  a  precise  and  self-               contained  code  of  appeal  is  provided   in               ’regard to obligation which are created by the               statute  itself, and it enables the appeal  to               be   carried  to  the  supreme  head  of   the               executive  Government.   It  is  difficult  to               conceive  what further challenge of the  order               was  intended  to  be excluded  other  than  a               challenge in the Civil Courts........" and  came  to the conclusion that the  jurisdiction  of  the Civil  Courts was excluded.  The decision of the High  Court was reversed and that of the trial Judge restored. The next case is the Raleigh Investment Co. Ltd. v. Governor General  in  Council(1).  This was an appeal  to  the  Privy Council  from  a judgment of the Federal Court of  India  in civil appellate jurisdiction reversing a decree passed by  a Special  Bench  of the Calcutta High Court in  its  original civil jurisdiction.  It arose from a suit filed for recovery of  a  sum paid under protest pursuant to an  assessment  to income-tax of the Investment Company on the ground that  the computation  was  under a provision of the  Income  Tax  Act which  was ultra vires the Indian Legislature.  One  of  the defences in the suit was that whether the said provision (1)  [1947] L. R. 74 I.A. 50. 670 was ultra vires or not, the Civil Courts were excluded  from exercising their jurisdiction by S. 226 of the Government of India Act, 1935 and s. 67 of the Indian Income Tax Act.  The provision in question was held ultra vires by the High Court and it further held that neither of the two provisions was a bar to the civil courts’ jurisdiction.  The Federal Court in disagreement  held  that s. 226 of the Government  of  India Act,  1935  barred the jurisdiction and that  the  provision impugned  was  not  ultra vires.  The bar of s.  67  of  the Income Tax Act was not pressed before the Federal Court. When  the case reached the Judicial Committee, the case  was considered  under s. 67 but not under s. 226.  The  Judicial Committee  was  of  the  opinion  that  s.  67  barred   the jurisdiction.    The  Investment  Company  had  raised   the question before the Incometax authorities that Explanation 3 to  para  4(1) of the Income-tax Act 1922 was  ultra  vires. This  was  not accepted and the assessment  was  made.   The Investment Company filed an appeal but did not proceed  with it   and  the  assessment  was  confirmed.   The   appellate authority  also  said in its order that  the  constitutional question  could not be raised before it.  The suit was  then instituted. Section  67 of the Indian Income-tax Act in  specific  terms stated "No suit shall be brought in any civil court to set aside or

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modify any assessment made under the Act. . . " The  result  of  the suit has  already  been  stated.   ’The Judicial Committee considered this section and observed that the  suit in form did not profess to modify  the  assessment but  in substance it did so. The declaration that a  certain provision was ultra vires was but a step.  According to  the Judicial Committee the assessment made under an ultra  vires statute  was  not a nullity and the assessment ought  to  be taken  to  proceed  on a mistake of law  in  the  course  of assessment.   Therefore,  without going  into  the  question whether  the provision impugned was ultra vires or  not  the Judicial Committee considered the matter. The argument was that the assessment was not one ’under  the Act’, if effect was given to an ultra vires provision  since the  provision  would  be a nullity  and  non-existent.   To discover the force of the prohibition in s. 67 the following tests were applied --               (a)   Does the Act contain machinery by  which               the  assessee  can raise the question  of  the               vires  of  the provision  before  the  special               authorities ?               (b)   This test was not conclusive but one  to               be considered.               671               (c)   If  there was no such machinery and  yet               the  civil courts were barred the vires of  S.               67 itself might come in for consideration. The Judicial Committee, however, came to the conclusion that the Income-tax Act gave the assessee an opportunity to raise the question under the Income-tax Act.  The provision for  a case  stated for the advisory opinion of the High Court  was available  and  even if the authorities refused to  state  a case,  the  High Court could be  directly  approached.   The decision  of  the  High Court was also  subject  to  further appeal.  Thus there was adequate machinery in the Income-tax Act. The  words  of s. 67 ’under the Act’ were construed  as  the activity of an assessing officer acting as such.  That  this activity  took into consideration an ultra  vires  provision did  not  take the matter out of these words.   That  phrase meant the provenance of the assessment, and not the accuracy or  correctness  of the assessment or the machinery  of  the Income-tax Act or the result of; the activity.  There was no difference   between  an  incorrect  apprehension   of   the provisions  of  the Income-tax Act and the invalidity  of  a provision.   The Judicial Committee explained that  if  this were  not  so  all  questions  of  the  correctness  of  the assessment  under  the,;  Income-tax Act  could  be  brought before  the  Court and I the section rendered  otiose.   The section  made  no distinction between tin inquiry  into  the merits  of the assessment and jurisdiction to embark  on  an enquiry  at all.  The Civil Courts’ jurisdiction  in  either case was invoked as to the correctness of the assessment and the  language  of  the section  precluded  consideration  of jurisdiction  in  such circumstances.   The  Income-tax  Act having  a suitable and adequate machinery,  jurisdiction  to question  the  assessment otherwise than by  that  machinery was,  therefore, held barred.  The Judicial  Committee  even doubted  whether  a  provision  such as S.  67  was  at  all necessary in the circumstances. Both  these cases thus appear to be decided on the basis  of provisions   in  the  relevant  Acts  for  the   correction, modification  and  setting  aside  of  assessments  and  the express  bar of the jurisdiction of the Civil  Courts.   The presence of a section barring the jurisdiction was the  main

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reason  and the existence of an adequate machinery  for  the same relief was the supplementary reason.  The provision for a  reference of a question to the High Court was  considered adequate to raise the issue of the validity of any provision of  law  under  which the taxing  authorities  acted.   This follows  from the Raleigh Investment Co.’s case(1).  Mask  & Co.’s  case (2) was more concerned with the finality to  the orders given by the Land Customs Act.  Even so in the Mask & Co.’s  case(2) room was left for interference by  the  Civil Courts by observing that (1) [1947] L. R. 74 1. A. 50. (2) [1940] L. R. 67 I. A. 222. 672 the  Civil  Courts had jurisdiction to  examine  into  cases where the provisions of the Act had not been complied  with, or  the statutory tribunal had not acted in conformity  with the  fundamental principles of judicial  procedures.   These observations  were accepted by this Court in Firm of  Illuri Subbayya Chetty Sow v. The State of Andhra Pradesh(1) and in Kerala  v. Ramaswami Iyer and Sons(2).  A passage  from  the latter case might be,quoted here               "It  is true that even if the jurisdiction  of               the   civil  court  is  excluded,  where   the               provisions  of  the  statute  have  not   been               complied  with or the statutory  tribunal  has               not  acted in conformity with the  fundamental               principles  of judicial procedure,  the  civil               courts  have  jurisdiction  to  examine  these               cases." The  observations  of  the  Judicial  Committee  were   thus completely accepted. We may now examine how the matter was further viewed in this Court.   In  two other cases this Court laid down  that  the validity  of the provisions under which the authorities  act is not a matter for those authorities to decide.  In Circo’s Coffee  Co. v. State of Mysore(3) it was contended  that  s. 40(2)  of the Mysore Sales Tax Act 1957 was ultra vires  and beyond the competence of the State Legislature.  This  Court observed :               "It is true that a question as to the vires of               section 40(2) of the Sales Tax Act was raised,               but  it  is now settled by decisions  of  this               Court  that the question as to the vires of  a               statute  which  a taxing officer  has  to  ad-               minister cannot be raised before him."               The same was again reiterated in C. T. Santhul               Inathan    Chettiar   v.  Madras(4)   in   the               following words :               "...this  Court has held, in Venkataraman  and               Co.  v. State of Madras (60 I.T.R.  112)  that               the authorities under a taxing statute are not               concerned  with  the validity  of  the  taxing               provisions and the questions of ultra vires is               foreign  to the scope of  their  jurisdiction.               As  no such point could be raised  before  the               Income-tax authorities, neither the High Court               nor  the  Supreme  Court  can  go  into  these               questions in a revision or reference from  the               decision of those authorities.  This case  was               followed  in  Commissioner  of  Income-tax  v.               Straw  Products  [1966,  2  S.C.R.  8811;  (60               I.T.R. 156)]".               (emphasis supplied)               (1)   [1964]  1  S.  C.R. 752.  (2)  [1966]  3               S.C.R. 582.

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             (3) 19 S. T. C. 66.               (4)  C. A. 1045 of 1966 decided on 20th  July,               1967.               67 3               The    party   was   left   to    ’appropriate               proceedings’  without  specifying  what   they               would be.  Perhaps a suit was meant.               It  follows that the question of  validity  of               the  taxing laws is always open to  the  Civil               Courts for it cannot be the implication of any               provision  to  make such a decision  final  or               that  even  void  or  invalid  laws  must   be               enforced  without any remedy.   Therefore,  in               Pabbojan  Tea Co. Ltd. v.  Dy.   Commissioner,               Lakhimpur(1), after, quoting the  observations               of Viscount  Simonds (Pyx Granite Co. Ltd.  v.               Ministry of Housing and Local Govt. (1960 A.C.                             260 at p. 286):               "It  is  a principle not by any  means  to  be               whittled down that the subject’s recourse  ’to               Her Majesty’s Courts for determination of  his               rights  is not to be excluded except by  clear               words."; our  brother  Mitter added that the extreme  proposition  in Raleigh Investment Co.’s case (2 ) had not found favour with this Court.  Our learned brother observed :               "This  Court  was not prepared to  accept  the               dictum  in  the judgment  (Raleigh  Investment               Co.)    to   the   effect   that   even    the               constitutional  validity of the taxing  provi-               sions would have to be challenged by  adopting               the  procedure  prescribed by  the  Income-tax               Act-See  Firm  of Illuri Subbayya  Chetty  and               Sons  v.  State  of Andhra  Pradesh  [1964]  1               S.C.R. 752 at 760." The position was rather strengthened in K. S. Venkataraman & Co. v. State of Madras(3).  The question then was whether  a suit  was  not  maintainable under S.  18-A  of  the  Madras General  Sales Tax Act 1939 (corresponding to s. 67  of  the Indian  Income-tax  Act  (1922).   The  suit  followed   the decision of this Court in Gannon Dunkerley and Co. v.  State of  Madras (4) in which ’works contracts’ of an  indivisible nature were held not to fall within the taxing provisions of the  Madras General Sales Tax Act, 1939.  Section  18-A  was pleaded as a bar.  It was held that since the provisions  of the  Madras General Sales Tax Act, 1939 were declared  ultra vires in their application to ’indivisible works  contracts’ the  action of the authorities was outside the said Act  and not under the Act for the purposes of s. 18-A.  The suit was held not barred.  Subarao, J. (as he then was) speaking  for the majority distinguished both the Raleigh Investment Co.’s case(5)  and  the Commissioner of I. T. Punjab,  North  West Frontier & Delhi Provinces, Lahore v.   Tribune       Trust, Lahore(") on the ground that no question of the (1)  A. I. R. 1968 S.C. 271. (3)  [1966] 2 S. C. R. 229. (5)  [1947] L. R. 74 1. A. 50. (2)  [1947] L. R.74 T. A. 50. (4)  [1059] S. C. R. 379. (6)  [1947] L. R. 74 1. A. 306. 674 vires  of  the law was raised in them.   Referring  to  Raja Bahadur Kamakshya Narain Singh of Ramgarh v. C.I.T. (1)  and State of Tripura v. The Province of East Bengal(3), Subbarao J.  pointed out that the suit was held maintainable  in  the

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latter  and there was nothing in the former to  support  the contention  that the question of ultra vires of a  statutory provision  could  be canvassed only  through  the  machinery provided  under the statute.  Referring next to the case  of Firm  of  Illuri  Subbayya Chetty  and  Sons’  case(3).  the learned Judge said that the question whether s. 18-A of  the Madras  General  Sales Tax Act, 1939 could  apply  where,  a particular  provision of the Sales Tax Act was  ultra  vires was left open (see, p. 243).  The learned Judge next  quoted the  opinion of the majority in Bharat Kala Bhandar Ltd.  v. M. C. Dhamangaon(4) to the following effect :               "But,  with respect, we find it  difficult  to               appreciate  how taking into account  an  ultra               vires provision which in law must be  regarded               as  not being a part of the Act at  all,  will               make  -the assessment as one ’under the  Act’.               No  doubt the power to make an assessment  was               conferred by the Act and, therefore, making an               assessment  would be, within the  jurisdiction               of   the  assessing  authoririty.    But   the               jurisdiction can be exercised only  according,               as  well  as  with  reference,  to  the  valid               provisions  of  the Act.  When,  however,  the               authority travels beyond the valid  provisions               it must be regarded as acting in excess of its               jurisdiction.  To give too wide a construction               to the expression ’under the Act’ may lead  to               the serious consequence of attributing to tile               legislature which owes its existence itself to               the Constitution, the intention of  affording,               protection  to unconstitutional activities  by               limiting  challenge to them only by resort  to               the special machinery provided by it in  place               of  the  normal remedies available  under  the               Code  of  Civil  Procedure,  that  is,  to   a               machinery  which cannot be as  efficacious  as               the  one provided by the general law.  Such  a               construction     might     necessitate     the               consideration of the very constitutionality of               the provision which contains this  expression.               This  aspect of the matter does not appear  to               have  been  considered in  Raleigh  Investment               Co.’s case." The   learned   Judge   next   considered   whether    these observations,  although obiter, were departed from  in  M/s. Kamla  Mills Ltd. v. The State of Bombay(5) and came to  the conclusion  that  that  decision  did  not  touch  upon  the question whether a suit would lie in (1)[1947] F. C. R. 130. (2) [1951] S. C. R. 1. (3) [1964]  1 S. C. R. 752. (4) [1965] 3 S. C, R. 499. (5)  [1966] 1 S. C. R. 64.                             675 a,  case  where the assessment was made on the  basis  of  a provision  which  was ultra vires the Constitution  (see  p. 246).  Having considered these rulings the learned Judge  examined the remedies provided by the Indian Income-tax Act and found that  all  authorities  were creatures of  the  statute  and functioned  under  it and could not  ignore  its  provisions since  the  said  Act conferred no  such  ’right’  on  them. Whether  the  provisions  were good or  bad  was  not  their concern.  Pointing out that the reference to the High  Court under  the Indian Income-tax Act was confined  to  questions arising  from  the  order of  the  Appellate  Tribunal,  the learned Judge observed that ’the question of ultra vires  is

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foreign  to  the scope of the Tribunals’  jurisdiction’  and that if such a question were raised the Tribunal could  only reject  it  on  the ground that it had  no  jurisdiction  to decide it, and the High Court and the Supreme Court would be equally incompetent on appeal to go into the question.   The learned  Judge  next considered the decisions  of  the  High Courts into which it is not necessary to go here and on  the strength  of  some observations which  supported  his  view, stated his view in the following words               "The  legal  position that  emerges  from  the               discussion  may  be  summarized thus  :  If  a               statute  imposes  a liability and  creates  an               effective machinery for deciding questions  of               law   or  fact  arising  in  regard  to   that               liability,  it may, by necessary  implication,               bar  the  maintainability of a civil  suit  in               respect of the said liability.  A statute  may               also  confer  exclusive  jurisdiction  on  the               authorities  constituting the  said  machinery               to.  decide  finally  a  jurisdictional   fact               thereby excluding by necessary implication the               jurisdiction of a civil court in that  regard.               But  an authority created by a statute  cannot               question  the vires of that statute or any  of               the   provisions  thereof  where-,  under   it               functions.  It must act under the Act and  not               outside  it.   If it acts on the  basis  of  a               provision  of  the  statute,  which  is  ultra               vires,  to  that  extent it  would  be  acting               outside  the  Act.  In that event, a  suit  to               question  the validity of such an  order  made               outside the Act would certainly lie in a civil               court." As the head-note correctly states the effect of the decision was  that the foundation laid by the Judicial  Committee  in Raleigh   Investment  Co.’s  case(1)  for   construing   the expression ’under the Act’ had no legal basis. It  may  be mentioned that in Bharat Kala Bhandar  (2)  case also it was held that there was no machinery provided in the Central Provinces and Berar -Municipal Act for refund of tax assessed (1) (1947) L.R.741.A.50. (2) [1965] 3S.C.R.499. 676 and  recovered in excess of constitutional limits  and  that the  remedy:  furnished  by  that  Act  was  inadequate  for enabling   the   assessee  to  challenge   effectively   the constitutionality  or legality of assessment or levy of  tax by  a municipality or to recover from it what  was  realised under  an invalid law. (see the judgment of Mitter, J.  also in Pabbojan case(1) at page 276).  In Bharat Kala Bhan  case (2) it was pointed out that :               "..........  one  of the  corollaries  flowing               from  the principle that the  Constitution  is               the  fundamental law of the land is  that  the               normal remedy of a suit will be available  for               obtaining  redress against the violation of  a               constitutional  provision.   The  Court  must,               therefore, lean in favour of construing a  law               in  such a way as not to take away this  right               and render illusory the protection afforded by               the Constitution." Again  in  Deputy Commercial Tax Officer,  Madras  v.  Raya- laseema  Constructions(")  the problem was the same  as  was dealt with in Venkataraman’s Co. Ltd. case (4) . The earlier case  was  followed  and  it was held  that  the  sales  tax

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authorities having given effect to an ultra vires  provision section  18-A of the Madras General Sales Tax Act, 1939  was no  bar  to the maintainability of the suit to  recover  tax paid under such an assessment since the authorities must  be taken to have acted outside and not under the Madras General Sales Tax Act. This brings us to the case of Provincial Government v. J. S. Basappa(5).  There too three suits were filed alleging  that the  goods had passed to extra state points while they  were still in the possession and ownership of the seller.   Since the  property in the goods remained in the seller  till  the goods had entered into other provinces, the sales could  not be subjected to a tax in Madras Presidency.  Section 11  (4) of the Madras General Sales Tax Act, 1939 made orders of the taxing  authorities final but the Act applied only to  sales within  the Presidency of Madras and not outside it.   There was  at that time no provision to oust the  jurisdiction  of the civil courts. Section  18-A of which we have spoken earlier and  on  which most of the cases turned, was added much later.  Many of the remedies such as were considered in Raleigh Investment Co.’s case(6)  and Venkataraman’s case (4) were also added at  the same  time as s. 18-A.  The question thus had to be  decided without an express provision ousting the jurisdiction of the Civil Courts and (1)  A. 1. R. 1968 S. C. 271. (3)  17 S. T. C. 505. (5)  [1964] 5 S. C. R. 5 1 7. (2)  [1965] 3 S. C. R. 499. (4)  [1966] 2 S. C. R. 229. (6) [1947] L. R. 74 I. A. 50.                             677 without the existence of ail adequate machinery for  raising such  an issue before the authorities.  The  only  provision which  had  to  be considered was S.  11(4)  which  provided ’every  order passed in appeal under this  section,  shall,, subject  to  the powers of revision conferred by S.  12,  be final.’  The  fundamental provisions of the  Madras  General Sales  Tax Act, 1939 (as it then stood) were that the  sales must  be within the Presidency of Madras.   The  authorities ignoring  these  provisions held that ’outside  sales’  were taxable.  Relying upon the dictum of the Judicial  Committee in  Mask  &  Co.’s case(1), as applied  in  Firm  of  Illuri Subbayya  Chetty’s case(2), this Court held that  the  suits were  competent.  In the case of this Court last  cited  the following observation was made:               "It   is   necessary   to   add   that   these               observations,  though  made in  somewhat  wide               terms, do not justify the assumption that if a               decision  has been made by a taxing  authority               under  the provisions of the  relevant  taxing               statute, ,its validity can be challenged by  a               suit on the ground that it is incorrect on the               merits and as such, it can be claimed that the               provisions  of the said statute have not  been               complied with.  Non-compliance with the provi-               sions  of  the statute to which  reference  is               made  by the Privy Council must, we think,  be               non-compliance    with    such     fundamental               provisions  of the statute as would  make  the               entire  proceedings  before  the   appropriate               authority  illegal and  without  jurisdiction.               Similarly,  if  an appropriate  authority  has               acted   in   violation  of   the   fundamental               principles  of  judicial procedure,  that  may

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             also tend to make the proceedings illegal  and               void   and  this  infirmity  may  affect   the               validity of the order passed by the  authority               in question."               The   Divisional  Bench  relying   upon   this               observation pointed out               "It  was  thus  held that  the  civil  court’s               jurisdiction  may not be taken away by  making               the decision of a tribunal final, because  the               civil  court’s  jurisdiction  to  examine  the               order,  with  reference  to  fundamental  pro-               visions  of the statute,  non-compliance  with               which  would make the proceedings illegal  and               without  jurisdiction, still  remains,  unless               the  statute  goes further and  states  either               expressly or by necessary implication that the               civil court’s jurisdiction is completely taken               away.               Applying these tests, it is clear that without               a  provision  like  S. 18A  in  the  Act,  the               jurisdiction  of the civil court would not  be               taken away at least where the action               (1) (1940) L. R. 67 1. A. 222.                            (2) [1964] 1 S.C. R.               752.               678               of  the authorities is wholly outside the  law               and  is  not a mere error in the  exercise  of               jurisdiction.   Mr. Sastri says that  we  must               interpret the Act in the same way as if s. 18A               was  implicit in it and that s. 18A was  added               to make explicit what was already implied.  We               cannot  agree.   The  finality  that   statute               conferred upon orders, of assessment, subject,               however,   to  appeal  and  revision,  was   a               finality for the purposes of the Act.  It  did               not  make  valid  an  action  which  was   not               warranted by the Act, as for example, the levy               of  tax on a commodity which was not taxed  at               all  or was exempt.  In the present case,  the               taxing  of  sales  which did  not  take  place               within  the State was a matter wholly  outside               the jurisdiction of the taxing authorities and               in   respect  of  such  illegal   action   the               jurisdiction  of the civil court continued  to               subsist.   In  our  judgment  the  suits  were               competent." This  case was, therefore, stronger than any so far  noticed because  of  the  absence  of  s.  18-A  and  the  elaborate machinery  for adequate remedy was introduced later and  the tax   was  illegal1y  collected  ignoring  the   fundamental provisions of the Madras General Sales Tax Act, 1939. However,  in Kerala v. Ramaswami Iyer and Sons(1)  (although it  was  not  pointed out what express  provision  or  clear intendment  in the Madras General Sales Tax Act, 1939 as  it then  stood,  barred  a civil suit)  Basappa’s(2)  case  was declared  to  be  wrongly decided.  In that  very  case  the learned  Judges considered a. rule which gave exemption  but held that it did not give protection because it was  enacted after  the  account  period.  What if it  had  been  enacted before  ?  The observations in Basappa’s case(1) that  if  a commodity  was  not taxable at all or was exempt  the  civil Court  would have jurisdiction were, however, not  accepted. It  was sufficient to have said in Ramaswami Iyer’s  case(2) that exemption or no exemption that was for the  authorities

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to  decide  and  not  a matter for  the  Civil  Courts.  The argument of exemption was rejected by observing :               "There  was in the  Travancore-Cochin  General               Sales Tax Act at the material time no  express               provision  which obliged the taxing  authority               to  exclude  from the computation  of  taxable               turnover  the amount of salestax collected  by               the dealers." (emphasis supplied) This  reasoning  shows that if it had been, the  suit  might have  been  held competent.  It is not necessary for  us  to pursue this matter further than to say that the  observation that  Basappa’s case was wrongly decided is open to  serious doubt. (1) [1966] 3 S. C. R. 582. (2) [1964] 5 S. C. R. 517, 679 This leaves for consideration only the cases Firm of  Illuri Subbayya  Chetty and Sons v. State of Andhra Pradesh(1)  and Kamla Mills Ltd. v. State of Bombay(2).  The case of Firm of Illuri  Subayya  Chetty(1) arose under  the  Madras  General Sales  Tax  Act, 1939, and s. 18-A was pleaded to  make  the suit incompetent.  The transactions in respect of which  tax was recovered were said to be of sales and not purchases and the latter only were to, be taxed.  It was held that s. 18-A barred  the  suit because the attempt was to  set  aside  or modify  an  assessment  made under the  said  Act.   It  was pointed  out  that any challenge to the correctness  of  the assessment  must be made before the appellate or  revisional forums  under  the  same  Act since  the  character  of  the transaction  was  a  matter into  which  the  appellate  and revisional  authorities could go.  A litigant  who  accepted the  assessment when he could call it in question  by  other proceedings under the same Act could not begin a suit.   The expression  ’under the Act’ was sufficient to cover even  an incorrect  assessment.  The assessee firm succeeded  in  the suit  but  the High Court held it barred under s.  18-A  and also  held  against the assessee firm on the nature  of  the transaction. This  Court  first held that there was no provision  in  the said  Act  for  bringing  a  civil  suit  to  question   the assessment.   Therefore  the matter must fall  in  s.  18-A. This  Court  analysed the provisions of the said  Act  which provided  by  s.  12-A,  12-B, 12-C  and  12-D  for  special appeals, including an appeal to the High Court, the  highest Civil  Court  in  the State, laying down  further  that  the appeal should be heard by a Division Bench.  In the light of this elaborate machinery the question, of alternative remedy was  approached.  It was also pointed out that the  assessee firm had itself included these transactions in its  returns. Having  conceded  that the tax was payable  and  not  having raised   the   issue  before   the   appellate   authorities constituted  under the said Act, it was held that  the  firm could not be allowed to raise the issue in a suit.  This was enough to dispose of the appeal to this Court. The  Constitution  Bench, however, went on  to  examine  the rulings  of  the Judicial Committee in Mask &  Co.’s(3)  and Raleigh Investment Co.’s(4) cases.  Dealing with the  former case,  this Court pointed out that non-compliance  with  the provisions  of  the statute meant non-compliance  with  such fundamental  provisions  of the statute as  would  make  the entire proceedings before the appropriate authority  illegal and  without jurisdiction.  I The defect of  procedure  must also  be fundamental.  In either case the defect  must  make the order invalid in law and void.  The Court went on to observe :

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(1)  [1964] 1 S. C. R. 752. (3)  (1940) L. R. 67 I. A. 222. (2)  [1966] 1 S. C. R. 64. (4)  (1947) L. R. 74 I. A. 50. 680 .lm15 "......  In  what  cases such a plea  would  succeed  it  is unnecessary  for us to decide in the present appeal  because we  have-no doubt that the contention of the appellant  that on the merits, -the decision of the assessing authority  was wrong, cannot be the subject-matter of a suit because s. 18- A clearly bars such a claim in the civil courts." Referring next to the Raleigh Investment Co.’s case(1)  this Court  pointed out that under the scheme of  the  Income-tax Act, the Judicial Committee thought that a question of vires of  the provisions could also be considered, but this  Court did not think it necessary to pronounce any opinion  whether this  assumption  was well-founded or not.  This  point  was later  considered in Venkataraman’s case(2) by Subbarao,  J. (as he then was) and we have sufficiently analysed the views of this Court.  The case of Firm of Illuri Subbayya (3 ) may be  said  to  be decided on special  facts  with  additional reference   to  the  addition  of  s.  18-A  excluding   the jurisdiction of civil court and the special remedies  provi- ded  in ss. 12-A to 12-D by which the matter could be  taken to the highest civil court in the State. This brings us to the last case on the subject.  That is the Kamla Mills case(4).  That case was heard by a special Bench of  7 Judges and is of more binding value than  the  others. Kamla  Mills  Ltd. was assessed to  certain  sales  effected between  26 January 1950 and 31 March 1951 which the  taxing authorities  treated  as  ’inside  sales’  and  the  Company claimed to be ’outside sales’ as determined under the Bengal Immunity   Co.  Ltd. v. State of Bihar and  others(5).   The judgment  in the last cited case was delivered on  September 6, 1955.  The period for invoking remedies under the  Bombay Sales Tax Act, 1946 under which the assessment was made  had expired.  A suit was, therefore, filed to claim refund.  The Bombay Act contained s. 20 which read               "20.   Save  as  is  provided  in  s.  23,  no               assessment made and no order passed under this               Act  or  the  rules  made  thereunder  by  the               Commissioner or any person appointed under  s.               3 to assist him shall be called into  question               in any Civil Court, and save as it provided in               sections  21 and 22, no appeal or  application               for  revision  shall  lie  against  any   such               assessment or order." The suit was dismissed on the preliminary point arising from this  bar.   A  Letter Patent appeal in the  High  Court  of Bombay also (1)  [1947] I.L.R 74 1. A. 50. (3)  [1964] 1 S. C. R. 752 (2)  [1966] 2 S. C. R. 229. (4)  [1966] 1 S. C. R. 64. (5) [1955] 2 S. C. R. 603.                             681 failed.   The case came before this Court on a  certificate. It  was  referred  to  a Special Bench  because  S.  20  was challenged as unconstitutional because it barred a suit even where the assessment was unconstitutional.  This Court  held that  as  there was adequate remedy to  raise  the  question before  the authorities by asking for rectification  of  the assessment, the section could not be said to deprive him  of remedy  in  such  a  way as to  render  the  section  itself

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unconstitutional  as was hinted in Raleigh Investment  Co.’s case(1)  about S. 67 of the Indian Income-tax Act.   We  are not concerned with that question. The  next  question  which was considered  was  whether  the jurisdiction  conferred on the taxing  authorities  included the jurisdiction to determine the nature of the  transaction or was the decision about the character of the  transaction, a  decision on a collateral fact ? This Court held  that  it was  the former and not the latter.  Therefore the  decision was  held  to  be merely an error in  assessment  which  was capable of correction by the usual procedure of appeals etc. The bar of s. 20 was, therefore, held to apply.  During  the course  of  the  arguments  the  Special  Bench   considered Basappa’s  case (2 ) and distinguished it from the  Firm  of Illuri  Subayya  Chetty’s  case(3) on the  ground  that  the former was not barred by S. 18-A as it did not exist.   The, Special Bench, however, made an observation to the following effect :               "In  cases  where the exclusion of  the  civil               courts’  jurisdiction  is  expressly  provided               for,  the, consideration as to the  scheme  of               the  statute in question and the  adequacy  or               the  sufficiency of the remedies provided  for               by it may be relevant but cannot be  decisive.               But where exclusion is pleaded as a matter  of               necessary   implication,  such   consideration               -would  be very important, and in  conceivable               circumstances,  1-night even become  decisive.               If it appears that a statute creates a special               right  or  a liability and  provides  for  the               determination of the right and liability to be               dealt with by tribunals specially  constituted               in that behalf, and it further lays down  that               all   questions  about  the  said  right   and               liability shall be determined by the tribunals               so   constituted,  it  becomes  pertinent   to               enquire  whether remedies normally  associated               with actions in civil courts are prescribed by               the said statute or not." The Special Bench refrained from either accepting the dictum of Mask & Co.’s case(4) or rejecting it, to the effect  that even  if jurisdiction is excluded by a provision making  the decision  of  the authorities final, the Civil  Courts  have jurisdiction to examine into (1)  [1947] L.R. 741.  A.50. (3)  [1964] 1 S. C. R. 5 72. (2)  [1964] 5 S. C. R. 517. (4)  [1940] L. R. 67 1. A. 222. 682 cases  where  the provisions of the particular Act  are  not complied with. Neither  of  the two cases of Firm of Illuri  Subayya(1)  or Kamla  Mills(2) can be said to run counter to the series  of cases earlier noticed.  The result of this inquiry into  the diverse  views  expressed  in this Court may  be  stated  as follows :-               (1)   Where  the statute gives a  finality  to               the orders of the special tribunals the  Civil               Courts’  jurisdiction  must  be  held  to   be               excluded  if  there is adequate remedy  to  do               what  the Civil Courts would normally do in  a               suit.   Such  provision,  however,  does   not               exclude  those cases where the  provisions  of               the particular Act have not been complied with               or  the  statutory tribunal has not  acted  in

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             conformity with the fundamental principles  of               judicial procedure.               (2)   Where  there  is an express bar  of  the               jurisdiction  of the court, an examination  of               the  scheme of the particular Act to find  the               adequacy  or the sufficiency of  the  remedies               provided  may be relevant but is not  decisive               to  sustain  the  jurisdiction  of  the  civil               court.               Where  there  is  no  express  exclusion   the               examination of the remedies and the scheme  of               the particular Act to find out the  intendment               becomes  necessary  and  the  result  of   the               inquiry  may be decisive.  In the latter  case               it is necessary to see if the statute  creates               a  special right or a liability  and  provides               for   the  determination  of  the   right   or               liability and further lays down that all ques-               tions about the said right and liability shall               be determined by the tribunals so constituted,               and whether remedies normally associated  with               actions in Civil Courts are prescribed by  the               said statute or not.               (3)   Challenge  to  the  provisions  of   the               particular  Act  as  ultra  vires  cannot be               brought  before  Tribunals  constituted  under               that Act.  Even the High Court cannot go  into               that question on a revision or reference  from               the decision of the Tribunals.               (4)   When  a  provision is  already  declared               unconstitutional. or the constitutionality  of               any  provision is to be challenged, a suit  is               open.   A  writ of certiorari  may  include  a               direction  for refund if the claim is  clearly               within  the time prescribed by the  Limitation               Act  but  it  is not a  compulsory  remedy  to               replace a suit.               (1) [1964] 1 S. C. R. 752.               (2) [1966] 1 S. C. R. 64.                                    683               (5)   Where  the  particular Act  contains  no               machinery  for  refund’ of  tax  collected  in               excess  of constitutional limits or  illegally               collected a suit lies.               (6)   Questions  of  the  correctness  of  the               assessment  apart from  its  constitutionality               are for. the decision of the authorities and a               civil  suit does not lie if the orders of  the               authorities are declared to be final or  there               is  an express prohibition in  the  particular               Act.   In  either  case  the  scheme  of   the               particular Act must be examined because it  is               a relevant enquiry.               (7)   An exclusion of the jurisdiction of  the               Civil  Court  is not readily  to  be  inferred               unless the conditions above set down apply. In  the  light of these conclusions we have to see  how  the present  case stands.  Section 3 was the  charging  section. It spoke  of  the  incidence  of the tax.  In  consisted  of several sub-sections.    These sub-sections laid the tax  on dealers according to their tax     able turnover and in  the case of a dealer who imported goods into     Madhya   Bharat the taxable turnover was Rs. 5000/-. Section      4     made certain exclusions and exemptions, and section 5  prescribed the rate of tax.    That section read

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             "5(1)  The tax payable by a dealer under  this               Act        shall  be  at a  single  point  and               shall not be less than         Rs.  1-9-0  per               cent.  or more than 6 1/4 per cent of the  tax               able  turnover, as notified from time to  time               by  the  Government  by  publication  in   the               official gazette.  Provided  that Government may in  respect  of               special    class of goods charge tax up to  12               1/2per cent. on the tax        able turnover.               (2)  The  Government while notifying  the  tax               payable by a dealer may also notify the  goods               and the point of     their  sale at which  the               tax is payable." In  notifying  the  rate provision was  made  for  rates  in respect of importers, the point of time being the import. As the import itself   postulated movement of goods, the matter fell within Article 301  and   as  trade  and  commerce   is declared to be free throughout the      territory of  India, it became unfree by reason of the tax. The   tax       would therefore have ex facie offended Article 301. This     could however  be  avoided  if  the  tax  was  saved  by   Article 304(a).That  required  that similar  goods  manufactured  or produced in    Madhya Bharat had to bear an equal tax.  Such equal tax was  not  imposed  hence  the  notifications  were struck down as making 684 discrimination  and  rendering trade  and  commerce  unfree. This was the effect of Bhailal’s case(1). No  -doubt the Madhya Bharat Sales-tax Act contained  provi- sions  for appeal, revision, rectification and reference  to the  High Court, the notifications being declared  void  the party  could take advantage of the fact that tax was  levied without  a  complete charging section.   This  affected  the jurisdiction  of the tax authorities because they could  not even  proceed  to assess the party.  The  question  was  one falling in category Nos. 3 and 4 rather than in category No. 2  above.  It was directly covered by the decision  of  this Court in Venkataraman’s case ( 2 ) read with Circo’s  Coffee Co.(2) and Senthulnathan Chettiar’s case(2) already referred to   We   would  have  considered  this  matter   again   if Venkataraman’s  case  (2 ) had been doubted  before  but  it seems  to have been followed in the last mentioned case  and Pabbojan Tea Company’s case(5).  If Kamla Mills Ltd. case(6) had  not  expressly  left the question open  we  would  have applied  the earlier case of the Special Bench but as it  is we  are  bound  not by the Special  Bench  decision  but  by Venkataraman’s  case(2).   We  must  therefore  allow  these appeals  with costs.  The judgment of the High Court is  set aside  and suits are decreed.  The order for costs shall  be as in the suit.  The costs in the High Court shall be  borne as incurred. V.P.S.                                  Appeal allowed., (1)  [1964] 6 S. C. R. 261. (2)  [1966] 2 S. C. R. 229. (3)  19 S. T. C. 66 (S.  C.). (4)  C. A. 1045 of 1966, dated 20-7-1967. (5)  A. 1. R. 1968 S.C. 271. (6)  [1966] 1 S. C. R. 64.                             685