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PETITIONER: KAMALA MILLS LTD.

       Vs.

RESPONDENT: STATE OF BOMBAY

DATE OF JUDGMENT: 23/04/1965

BENCH: GAJENDRAGADKAR, P.B. (CJ) BENCH: GAJENDRAGADKAR, P.B. (CJ) WANCHOO, K.N. SHAH, J.C. DAYAL, RAGHUBAR SIKRI, S.M. BACHAWAT, R.S. RAMASWAMI, V.

CITATION:  1965 AIR 1942            1966 SCR  (1)  64  CITATOR INFO :  R          1966 SC 893  (18)  MV         1966 SC1089  (43,46,47,48,51)  R          1966 SC1412  (5,15)  R          1966 SC1738  (4,6,7)  RF         1967 SC   1  (56)  E          1968 SC 271  (12)  E          1969 SC  78  (19,21,26,30,32,35)  RF         1975 SC2238  (22)  R          1977 SC 955  (15,16,23)

ACT: Bombay  Sales  Tax  Act, 1946 (5 of 1946),  s.  20-Suits  to challenge   assessments  made  under  Act  and  rules   made thereunder   barred-’Outside’  sales  wrongly  assessed   as ’inside’ sales--Suit to recover tax wrongly charged  whether lies,.

HEADNOTE: The  appellant, a public limited company  manufacturing  and selling  textiles was a ’dealer’ under the Bombay Sales  Tax Act  1946.  For the period 26th January 1950, to 31st  March 1951, it was assessed to sales tax oncertain sales  which were treated by the Sales Tax Authorities as ’inside’sales but which according to the decision of the Supreme Court  in theBengal  Immunity  Co. Ltd. v. State of Bihar  and  Ors. [1955] 2 S.C.R.603,  delivered on 6th  September  1955, were  ’outside’ sales non-taxable under the Act.  After  the above  decision  the appellant discovered that it  had  been illegally subjected to tax in respect of the said  ’outside’ sales.   The  period  for  remedies  under  the  Act  having expired,  it  filed  a suit for the  recovery  of  sales-tax illegally  collected  from it in respect  of  the  ’outside’ sales.  On behalf of the respondent State the plea taken  in defence  was that the suit was barred by s. 20 of  the  Act. Accepting the plea, the trial court dismissed the suit.  The High  Court, in appeal, took the same view, whereupon,  with certificate, the appellant came to this Court.

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The questions, arising out of the arguments on behalf of the appellant,  which fell for determination were : (1)  whether an  assessment in violation of a statutory  provision  could claim the status of an assessment made under the Act, within the  meaning  of  s. 20; (2) whether  the  decision  by  the appropriate  authority as to the nature of  the  transaction was  a decision on a collateral fact, the finding  on  which alone  conferred jurisdiction on the authority to  levy  the tax, or was it a decision on a question of fact which had to be  determined by the authority itself as one of the  issues before  it  ? (3) Whether s. 20 was valid  if  construed  as being  a  complete  bar  to a suit  such  as  filed  by  the appellant. HELD  :(i)  Section 20 protects "assessment made  under  the Act,   or   the  rules  made  thereunder"   by   appropriate authorities.   In  Firm and Illuri Subbaya Chetty  and  Sons this  Court, interpreting a similar provision in s.  18A  of the  Madras  General  Sales Tax Act observed  that  the  ex- pression  "any  assessment  made under this  Act"  was  wide enough  to  cover all assessments made  by  the  appropriate authorities under the Act whether the said assessments  were correct or not.  There can be little doubt. that the  clause "an assessment made" cannot mean on assessment properly  and correctly made. [72 B-D] In  its  plaint the appellant was undoubtedly  calling  into question  the  assessment order made against it and  such  a challenge was plainly prohibited by s. 20. [72C] 65 Firm  and  Illuri Subbaya Chetty and Sons v.  The  State  of Andhra Pradesh, [1964] 1 S.C.R. 752, relied on. (ii)If the relevant provisions which confer jurisdiction on the  appropriate  authorities  to  levy  assessment  on  the dealers  in  respect of transactions to which  the  charging section applies are examined, it is impossible to escape the conclusion that all questions pertaining to the liability of the   dealers  to  pay  assessment  in  respect   of   their transactions  are  expressly  left  to  be  decided  by  the appropriate  authorities  under the Act as  matters  falling within  their  jurisdiction.   Whether or not  a  return  is correct; whether or not transactions which are not mentioned in the return, but about which the appropriate authority has knowledge, fan within the mischief of the charging section-, what  is the true or real extent of the  transactions  which are assessable; all these and other allied questions have to be determined by the appropriate authorities themselves, and so it is impossible to accept the argument on behalf of  the appellant that the finding of the appropriate authority that a particular transaction is taxable under the provisions  of the  Act, is a finding on a collateral fact which gives  the appropriate  authority jurisdiction to take a  further  step and make the actual order of assessment.  The whole activity of  assessment beginning with the filing of the  return  and ending  with  the  order  of  assessment  falls  within  the jurisdiction of the appropriate authority and no part of  it can  be  said  to  constitute  a  collateral  activity   not specifically  and expressly included in the jurisdiction  of the appropriate authority as such. [75 D-H] If   the   appropriate  authority   while   exercising   its jurisdiction and powers under the relevant provisions of the Act,  holds  erroneously  that a  transaction  which  is  an outside  sale is not an outside sale and proceed,-, to  levy sales-tax  on  it cannot be said that the  decision  of  the appropriate authority is without jurisdiction. [78B] The Provincial Government of Madras (Now Andhra Pradesh)  v. J. S. Basappa, 15 S.T.C. 144 and Bharat Kala Bhandar Ltd. v.

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Municipal  Committee,  Dhamangaon,  C.A.  No.  600  of  1964 decided March 26. 1965, distinguished. Smt.   Ujjam Bai v. State of Uttar Pradesh. [1963] 1  S.C.R. 776, relied on. State Trading Corporation of India Ltd. v. State of  Mysore, [1963] 3 S.C.R. 792, Secretary of State, represented by  the Collector of South Arcot v. Mask and Co.L.R.  67   I.A. ’222’ Raleigh Investment.  Co. Ltd. v. Governor-General inCouncil, L.R. 74 I.A. 50 Pyx Granite Co.  Ltd. v. Ministryof Housing JUDGMENT: Yiewsley  and West Dryton Urban District Council,  [1957]  2 Q.B. 136, referred to. (iii)If  it  appears that a statute creates  a  special right or liability ind provides for the determination of the right  or 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 deter- mined 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.  Such an enquiry would have relevance in the present case  in  construing  the  terms of s.  20  as  well  as  in considering the question of the constitutionality of s.  20. If  the court was satisfied that the Act provided no  remedy to make a claim for the recovery of illegally collected  tax and  yet s. 20 prohibited such a claim being made before  an ordinary  civil court, the court might hesitate to  construe s. 20 as creating an absolute bar, or if such a construction was 66 not  reasonably possible the court might  seriously  examine the  question  about the constitutionality of  such  express exclusion of the civil court’s jurisdiction having regard to the  provisions of Arts. 19 and 31 of the Constitution.  [82 C-F; 83 C-D] Sales Tax Officer, Banaras & Ors. v. Kanhaiya Lal Mukund lal Saraf,  [1959]  S.C.R.  1350  and  Commissioner  for   Motor Transport  V. Antill Ranger & Co. Pty.  Ltd.  State  of  New South Wales and Ors. v. Edmund T.  Lennon Pty.  Ltd.  [1956] 3 All E.R. 106, referred to. (iv)From  an examination of the relevant provisions of  the Act  it  was  clear that the  appellant  could  have  either appealed or applied for revision and prayed for  condonation of   delay  on  the  ground  that  the  mistake  which   was responsible for the recovery of the tax illegally levied was discovered on the 6th of September 1955, because such a plea would have been perfectly competent under s. 22B.  In  other Words if the appellant had pursued a remedy available to  it under  s. 21 or s. 22 read with s. 22B, its case would  have been  considered  by  the  appropriate  authority  and   the validity  of the grounds set up by it for the refund of  the tax in question would have been legally examined.  Therefore it  could  not  be said that even for the  claim  which  the appellant  sought to make in the present suit, there was  no alternative remedy prescribed by the Act. [85 A-C] The  above conclusion served a double purpose.  It  made  it easier  to  construe the wide words used in s. 20  and  hold that they constituted an absolute bar against institution of the present suit and it also helped the respondent to  repel the plea of the appellant that s. 20 if so widely  construed was  unconstitutional.   The conclusion  therefore  followed that s. 20 had to be construed in the same manner as s.  18A of  the Madras General Sales Tax Act was construed  by  this Court in Firm and Illuri Subbaya Chetty and Sons and even on this  wide  construction the  section  was  constitutionally

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valid. [85 D-E] (v)Although  the suit filed by the appellant in so far  as it  related to the recovery of tax illegally  collected  was barred  by  s.  20,  it  was not barred  in  so  far  as  it challenged the validity of s. 20, itself.  In terms s. 20 is confined  to  cases when the validity of  assessment  orders made  under  the  Act is challenged.  It cannot  take  in  a challenge  to the validity of the section itself.  But  this finding could be of no material assistance to the  appellant because  even if it succeeded on this point it still had  to face the plea of the respondent that on merits the suit  was barred. [85H]

& CIVIL APPELLATE JURISDICTION : Civil Appeal No. 481 of 1963. Appeal from the judgment and order, dated August 7, 1961  of the Bombay High Court in Appeal No. 51 of 1960. A.   V.  Viswanatha  Sastri  and  1.  N.  Shroff,  for   the appellant. S.   V. Gupte, Solicitor-General, S. G. Patwardhan and R. H. Dhebar, for the respondent. S. Venkatakrishnan, for intervener No. 1. Naunit Lal, for intervener No. 2. P.Govinda Menon and V. A. Seyid Muhammed, for  intervener No. 3. 6 7 R.   Ganapathy  Iyer and B. R. G. K. Achar,  for  intervener No.4. N.   Krishna  swamy  Reddy,  Advocate-General,  Madras,   V. Ramaswami and A. V. Ranagam, for intervener No. 5. M.   S. Gupta, for intervener No. 6. G.   C.  Kasliwal, Advocate-General, Rajasthan, K.  K.  Jain and R.    N. Cachthey, for intervener No. 7. C.   B. Agarwala and 0. P. Rana, for intervener No. 8. B.   SEN,  S. C. Base and P. K. Chakravarti for P.  K.  Bose for intervener No. 9. B.   V. Subramaniam, Advocate-General, Andhra Pradesh and B.   R. G. K. Achar, for intervener No. 10. The Judgment of the Court was delivered by Gajendragadkar,   C.J.  The  principal point  of  law  which arises  in this appeal is whether the Bombay High Court  was right in holding that the suit filed by the appellant, Kamla Mills Ltd. against the respondent, the State of Bombay,  was incompetent.  The appellant is a Limited Company and owns  a textile   mill  at  Bombay.   It  carries  on  business   of manufacture  and sale of textile cloth.  During  the  period 26th  January, 1950 to 31st March, 1951, the  appellant  was registered as a "Dealer" under the provisions of the  Bombay Sales  Tax  Act, 1946 (No.  V of 1946)  (hereinafter  called ’the  Act’).  The appellant’s case is that during  the  said period,  it sold goods inside and outside the then State  of Bombay.   The  total value of goods sold  by  the  appellant outside  the State of Bombay was Rs. 40,20,623-12-0 and  Rs. 1,08,946-14-0.   On  the said sales  of  Rs.  40,20,623-12-0 General  Sales Tax of Rs. 61,885-12-0 was levied,  where  on the  sales  of Rs. 1,08,946-14-0 Special Sales  Tax  of  Rs. 3,301-8-0  was  levied.   The total Sales  Tax  thus  levied against the appellant in respect of the outside sales during the relevant period was Rs. 65,187-4-0. On  December 20, 1956, the appellant instituted the  present suit  (No. 402 of 1956) on the Original Side of  the  Bombay High Court, and claimed to recover the said amount from  the respondent  on the ground that it had been illegally  levied

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against  it.  According to the appellant, the illegality  of the impugned assessment, levy, imposition and collection was discovered  by  it  soon after  this  Court  pronounced  its judgment  in The Bengal Immunity Co., Ltd. v. The  State  of Bihar & Others, (1) on the 6th September, (1)[1955] 2 S.C.R. 603. 68 1955.   The appellant’s case further was that s. 20  of  the Act did not bar the institution of the present suit; and, in the  alternative, if it was held that it created a bar,  the said  section was ultra vires the Constitution of India  and void. The  claim  thus made by the appellant was resisted  by  the respondent  on several grounds.  One of the pleas raised  by the  respondent  was that the Court had no  jurisdiction  to entertain the suit.  It was urged by the respondent that  s. 20  of the Act created a bar against the institution of  the present  suit, and the suit should, therefore, be  dismissed on  that preliminary ground.  The respondent also  contended that the plea raised by the appellant that the said  section was ultra vires the Constitution was without any  substance. On the merits, the respondent pleaded that the appellant was not  justified  in claiming a refund of the  amount  of  tax recovered from it for the sale transactions in question. On  these  pleadings, the learned trial  Judge  framed  nine issues.   Issue No. 2 was in regard to the  jurisdiction  of the  Court to entertain the suit.  This issue was  tried  by the  learned trial Judge as 3a preliminary issue.   He  held that  s. 20 of the Act was a bar to the institution  of  the present suit, and on that view, he upheld the Plea raised by the  respondent.   In the result, the appellant’s  suit  was dismissed. The  appellant  challenged  the  correctness  of  the   said decision by preferring an appeal before a Division Bench  of the  said High Court under Clause 15 of the Letters  Patent. The Division Bench agreed with the view taken by the learned trial  Judge  and  dismissed the  appeal  preferred  by  the appellant.   The appellant then applied for and  obtained  a certificate from the said High Court and it is with the said certificate that it has come to this Court in appeal. When this appeal was argued before a Division Bench of  this Court  on March 23, 1964, Mr. Purshottam for  the  appellant contended  that  in  addition to the point  which  had  been decided  by the High Court, he wanted to urge that s. 20  of the  Act was invalid.  The case which was thus presented  by Mr.   Purshottam   was  that  on  a  fair   and   reasonable construction, it should be held that s. 20 does not create a bar  against  the  institution of  the  present  suit.   If, however, it was construed to create a bar, it was  constitu- tionally  invalid.  It appears that though this  alternative plea bad been taken by the appellant in its plaint, no issue was framed in respect of it and naturally, the point has not been  considered either by the learned trial.  Judge_ or  by the Division Bench which 69 heard  the  Letters Patent Appeal.  Even  so,  the  Division Bench  of  this Court which heard the  appeal,  allowed  Mr. Purshottam to raise his alternative contention, and so,  the appeal was ordered to be placed before a Constitution Bench. The appeal then came on for hearing before the  Constitution Bench on April 10, 1964.  After it was argued for sonic time the Court decided to issue notices to the  Advocates-General of  different States, because it was felt that the  question about  the constitutionality of s. 20 of the Act  which  the appellant wanted to raise was of considerable importance and

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different States may be interested in presenting their  case before  this Court, for a provision similar to that  of  the impugned section would be found in Sales Tax statutes passed by many State legislatures.  That is why this Court directed that  notices should be served on the  Advocates-General  of all  States  and  the matter should be  placed  for  hearing before  a Special Bench.  That is how this matter  has  been placed before a Special Bench for final disposal. For  the  appellant,  Mr. Viswanatha Sastri  has  urged  two points before us.  He argues that on a fair construction  of s.  20, it should’ be held that the present suit is  outside the mischief of the said section.   In  the alternative, he contends that  if  s.  20 creates  a statutory bar against the institution of  a  suit like  the  Present,  it  should  be  held  ultra  vires  the Constitution. Before  dealing  with the points raised in this  appeal,  it would  be  necessary to refer to one fact which  is  not  in dispute.  The Act was passed in 1946 and it came into  force on  March 8, 1946.  At that time, the word as defined by  s. 2(g)  of the Act would have taken in all sales whether  they were inside sales or outside sales.  After the  Constitution was  adopted on January 26, 1950, Art. 286 came  into  force and  it  protected certain sales specified by  it  from  the purview  of State taxation.  It may theoretically  be  true, that  as soon as Art. 286 became effective,  the  expression "sale"   as   defined   by   the   Act   was   automatically constitutionally controlled by the limitations prescribed by it.  To make this position clear, however, Bombay  Ordinance If  of  1952 was passed and by s. 3, it added s. 30  to  the Act.   In effect, s. 30 introduced in the Act  the  relevant provisions prescribed by Art. 286 of the Constitution, so as to  bring the operation of the Act expressly  in  conformity with  the said constitutional provision.  Section 3  further made it clear that the addition made by it by introducing s. 30  in the Act shall be made and shall always be  deemed  to have  been  made in the said Act as so continued  in  force, with effect from the 26th January, 1950. 70 It  is  well-known  that the controversy in  regard  to  the interpretation  of Art. 286 began with the decision of  this Court in the State of Bombay v. United Motors(1), and  ended with  the subsequent decision, of this Court in the case  of Bengal  Immunity Co.(2) In order to alleviate  the  economic crisis which was likely to result in view of the  subsequent decision of this Court, the President promulgated the  Sales Tax  Validation  Ordinance, 1956 on January  30,  1956,  the provisions of which were later incorporated in the Sales Tax Validation   Act,  1956.   This  Act  validated  sales   tax collected  by different States from 1st April, 1951  to  6th September, 1955 in accordance with the principles laid  down by  this  Court  in  United  Motors’  case.   The  sales-tax similarly collected between 26th January 1950 to 31st March, 1951  was  also  sought to be validated  by  the  Sales  Tax Continuance  Order,  1950.  If we had reached the  stage  of considering the merits about the validity of the recovery of tax in the present case, it would have become necessary  for us  to consider the effect of this Continuance  Order.   Mr. Sastri contends that notwithstanding the Continuance  Order, the  recovery  of the tax is illegal and that  is  the  main foundation .of his argument before us.  The present  dispute between  the  parties,  according to  Mr.  Sastri,  is  thus essentially similar to other disputes between assessees  and the  respective  States  where  through  mistake,  tax   was collected  or  paid  in regard to  transactions  which  were

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relates to the construction of s. 20.  Let us read the  said section : We  will now revert to the main points of law raised  before us  for  our  decision.  The first question  which  must  be considered  relates  to the construction of s. 20.   Let  us read the said section               "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". Mr.  Sastri contends that s. 20 can have no  application  to the present suit, because the order of assessment which  the appellant seeks to challenge in the present proceedings  has been  made  by the relevant  Sales-tax  authorities  without jurisdiction.   He  concedes that even though  an  order  of assessment  made  under  the Act may be passed  on  a  wrong conclusion of fact, it cannot be challenged by a suit having regard  to  the  provisions of s. 20.  In  other  words,  an erroneous order of assessment made under the Act would be (1) [1953] S.C.R. 1069. (2) [1955] 2 S.C.R. 693. 71 entitled to the protection of S. 20; but the said protection cannot  be  claimed  by an order  which  is  passed  without jurisdiction.    According  to  Mr.  Sastri,  the   impugned assessment  contravenes  the provisions of Art. 286  and  as such,  is invalid.  What the assessment order  purported  to tax was an outside sale and it was beyond the competence  of the authority to make the said order.  Indeed, it was beyond the  competence  of the State Legislature to levy a  tax  in respect  of  an  outside  sale;  and  so,  on  the  ultimate analysis,  the impugned assessment is  without  jurisdiction and  it cannot, therefore, be said to be an assessment  made under the Act within the meaning of S. 20. Mr.  Sastri did not dispute the fact that the argument  thus presented  by  him would be equally applicable to  cases  of assessment made erroneously in respect of transactions which are otherwise statutorily exempted from the operation of the Act.   If a Sales Tax statute exempts  certain  transactions from   the  purview  of  its  charging  section,   and   the appropriate  authority  makes  an  order  of  assessment  in respect  of  such an exempted transaction,,  the  assessment would  be beyond its jurisdiction and can be impeached by  a suit; s. 20 will not protect such an assessment.  No  doubt, Mr. Sastri emphasised the fact that the constitutional  pro- hibition  against an assessment in respect of outside  sales stood  on a much higher pedestal than the prohibition  by  a statutory   provision  in  a  Sales  Tax  Act.   The   first prohibition  is a constitutional prohibition and its  breach would entitle a citizen to claim the protection of Art.  265 and Art. 31(1); but, on principle, according to Mr.  Sastri, a  transaction which is exempted from assessment  either  by virtue  of Art. 286 or by virtue of any  specific  statutory provision,  cannot  be validly assessed, and  an  assessment made  in  respect  of  it cannot  claim  the  status  of  an assessment  made under the Act within the meaning of s.  20. A  suit would, therefore, be competent to challenge such  an invalid  assessment.   That,  in  brief,  is  Mr.   Sastri’s argument on the construction of s. 20. In  dealing with this question, it is necessary to  remember

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that the normal rule prescribed by S. 9 of the Code of Civil Procedure   is  that  the  courts  shall  (subject  to   the provisions  herein contained) have jurisdiction to  try  all suits  of  a  civil nature excepting suits  of  which  their cognizance  is either expressly or impliedly barred.   There is  no  doubt  that  a claim for the  refund  of  sales  tax allegation  to  have  been paid by  the  appellants  through mistake is a claim of a civil nature and normally it  should be triable by the ordinary courts of competent  jurisdiction as  provided  by S. 9 of the Code; but this  section  itself lays down that the jurisdiction of the civil 72 courts to try suits of a civil nature can be excluded either expressly  or  impliedly; and so, the point raised  for  our decision  in  the present appeal is whether on  a  fair  and reasonable  construction of s. 20, It can be said  that  the Jurisdiction  of the civil court is barred either  expressly or impliedly. Section  20 protects "assessment made under the Act  or  the rules  made thereunder" by appropriate  authorities.   There can  be  little doubt that the clause "an  assessment  made" cannot mean the assessment properly or correctly made.   The said  clause takes in all assessments made or  purported  to have been made under the Act.  In its plaint, the  appellant is  undoubtedly calling into question the  assessment  order made  against  it, and such a challenge  to  the  assessment order  is  plainly  prohibited  by  s.  20.   An  order   of assessment,  though  erroneous,  and  though  based  on   an incorrect  finding  of fact, is, nevertheless, an  order  of assessment within the meaning of s. 20; and s. 20, in terms, provides that it will not be called in question in any civil court. This question has been recently considered by this Court  in Firm  and  Illuri  Subbayya Chetty & Sons v.  The  State  of Andhra  Pradesh(1).   Dealing  with s.  18A  of  the  Madras General Sales Tax Act (Act 9 of 1939), which corresponds  to s.  20  with which we are concerned in the  present  appeal, this Court observed that the expression "any assessment made under this Act" is wide enough to cover all assessments made by  the appropriate authorities under this Act  whether  the said assessments are correct or not.  It is the activity  of the  assessing  officer  acting as  such  officer  which  is intended  to  be protected and as soon as it is  shown  that exercising his jurisdiction and authority under this Act, an assessing  officer  has made an order  of  assessment,  that clearly  falls  within  the scope of s. 18A.   It  was  also observed  that  whether or not an assessment has  been  made under  this  Act,  will not depend  on  the  correctness  or accuracy of the order passed by the assessing authority. This position is not seriously disputed by Mr. Sastri before us.  He,  however, contends that if the impugned  order  has been passed without jurisdiction, it cannot fall within  the purview of s. 20 of the Act.  In other words, the contention is that when the appropriate authority purported to levy the tax  on  the  appellant in respect of  the  transactions  in question,  it  was attempting to assess outside  sale,;  and since  the  said  assessment contravened Art.  286,  it  was invalid and the order was without jurisdiction and as  such, a nullity.  How can an order passed by the appropriate (1)  [1964] 1 S.C .R. 752. 73 authority  without jurisdiction claim the protection  of  s. 20, asks Mr. Sastri. In deciding the validity of this contention, it is necessary to  examine the scope of the jurisdiction conferred  on  the

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appropriate  authorities by the relevant provisions  of  the Act.   Jurisdiction is either territorial, or pecuniary,  or in  respect  of the subject matter. There is  no  difficulty about  the assessing authorities’ territorial and  pecuniary jurisdiction in the present case.  What is the nature of the Jurisdiction  conferred  on  the  appropriate  authority  in respect  of  the  subject-matter  of sales  tax  ?  Has  the appropriate authority been given power to examine the nature of the transaction and decide whether it is liable to tax or not ? Or, can the appropriate authority proceed to  exercise its  power  of  imposing  a tax  only  in  cases  where  the transaction  in  question is assessable to such  tax  ?   In other  words,  is the decision about the  character  of  the transaction  the decision on a collateral fact, the  finding on which alone confers jurisdiction on the tribunal to  levy the  tax, or is it the decision on a question of fact  which is left to be determined by the appropriate authority itself ? If the jurisdiction conferred on the appropriate authority falls  under  the first category, then its  finding  that  a particular transaction is taxable under the relevant  provi- sions  of  the  Act,  would be a  finding  on  a  collateral question  of  fact’  and it may be permissible  to  a  party aggrieved by the said finding to contend that the tax levied on  the basis of an erroneous decision about the  nature  of the  transaction is without jurisdiction.  If, however,  the appropriate   authority  has  been  given  jurisdiction   to determine the nature of the transaction and proceed to  levy a  tax in accordance with its decision on the  first  issue, then the decision on the first issue cannot be said to be  a decision  on a collateral issue, and even if the said  issue is erroneously determined by the appropriate authority,  the tax  levied by it in accordance with its decision cannot  be said to be without jurisdiction. It  is  observed in Halsbury(1) : "The  jurisdiction  of  an inferior  tribunal  may depend upon the fulfilment  of  some condition Precedent or upon the existence of some particular fact.  Such a fact is collateral to the actual matter  which the  inferior  tribunal has to try,  and  the  determination whether  it exists or not is logically and temporally  prior to  the  determination  of tile actual  question  which  the inferior  tribunal has to try.  The inferior  tribunal  must itself  decide  as  to the collateral fact :  when,  at  the inception   of   an  inquiry  by  a  tribunal   of   limited jurisdiction,  a challenge is made to its jurisdiction,  the tribunal has to make up its mind whether it will (1)  Halsbury’s Laws of England, 3rd Edn.  Vol.  11, p. 59. 7 4 act or not, and for that purpose to arrive at some  decision on  whether  it  has  jurisdiction or  not.   There  may  be tribunals which, by virtue of legislation constituting them, have the power to determine finally the preliminary facts on which  the further exercise of their  jurisdiction  depends; but,  subject  to that, an inferior tribunal  cannot,  by  a wrong decision with regard to a collateral fact, give itself a jurisdiction which it would not otherwise possess". It  would  be noticed that Mr. Sastri’s  argument  that  the impugned order of assessment is without jurisdiction and  as such, does not fall within S. 20, proceeds on the assumption that  the  finding  of the appropriate  authority  that  the transactions  in  question were taxable under  the  relevant provisions  of  the  Act, is a finding on a  fact  which  is collateral.   The  question is : is  this  assumption  well- founded  ? In our opinion, the answer to this question  must be in the negative. In this connection, the relevant scheme of the Act by  which

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necessary  powers  have been conferred  on  the  appropriate authorities, falls to be considered.  Section 3(1)  provides that  for  carrying  out  the  purposes  of  this  Act,  the Provincial   Government  may  appoint  any  person   to   be Commissioner of Sales Tax, and such other persons to  assist him  as the Provincial Government thinks fit.  Section  3(2) then lays down that persons appointed under sub-s. (1) shall exercise  such powers as may be conferred and  perform  such duties  as  may  be imposed on them by or  under  this  Act. Section  4  deals  with the appointment of  a  Tribunal  and provides  for its constitution.  Section 5 is  the  charging section.   Section 8 requires the registration  of  dealers, the  expression  "dealer" having been defined  by  S.  2(c). Section  10  imposes an obligation on the  dealers  to  make returns.  Section 11 deals with the assessment of tax,  sub- s.  (1)  (a)  provides that the amount of  tax  due  from  a registered dealer shall, in the case of first assessment, be assessed  in  respect of such period  not  exceeding  twelve months as the Commissioner may determine.  Sub-sections (2), (3)  and  (4) of S. 11 contain provisions in regard  to  the procedure  which has to be followed by the  Commissioner  in determining the question about the liability of a dealer  to pay assessment.  The Commissioner has to take evidence,  has to  bear the dealer, can require further evidence to be  led by  the  dealer  on  specific  points  and  then  reach  his conclusion  on  the  question as to whether  the  dealer  is liable  to  be  assessed, and if yes, to what  extent  ?  In passing  his order of assessment, the Commissioner  acts  on the evidence led before him.  Sub-s. (5) empowers the                              75 Commissioner to levy assessment to the best of his  judgment in cases failing under it.  It also authorises him to impose a  penalty  as therein specified.  Section  11A  deals  with turnover  which  has  escaped  assessment,  and  it  confers authority  on the Commissioner to pass an appropriate  order of  assessment  in respect of the said  category  of  cases. When  the  Commissioner  makes an  order  of  assessment  in exercise of the powers conferred on him, a right is given to the  assessee  to  prefer an appeal  and  a  revision  under sections 21 and 22 respectively. It would thus be seen that the appropriate authorities  have been  given  power in express terms to examine  the  returns submitted  by the dealers and to deal with the questions  as to whether the transactions entered into by the dealers  are liable  to be assessed under the relevant provisions of  the Act  or  not.   In our opinion, it is plain  that  the  very object of constituting appropriate authorities under the Act is  to create a hierarchy of special tribunals to deal  with the   problem  of  levying  assessment  of  sales   tax   as contemplated  by  the  Act.   If  we  examine  the  relevant provisions  which  confer jurisdiction  on  the  appropriate authorities to levy assessment on the dealers in respect  of transactions  to which the charging section applies,  it  is impossible  to  escape  the conclusion  that  all  questions pertaining to the liability of the dealers to pay assessment in  respect of their transactions are expressly left  to  be decided  by  the appropriate authorities under  the  Act  as matters falling within their jurisdiction.  Whether or not a return is correct; whether or not transactions which are not mentioned  in  the return, but about which  the  appropriate authority  has  knowledge, fall within the mischief  of  the charging  section; what is the true and real extent  of  the transactions  which  are  assessable; all  these  and  other allied  questions have to be- determined by the  appropriate authorities  themselves;  and so, we find it  impossible  to

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accept  Mr.  Sastri’s  argument  that  the  finding  of  the appropriate  authority  that  a  particular  transaction  is taxable under the provisions of the Act’, is a finding on  a collateral  fact  which  gives  the  appropriate   authority jurisdiction  to  take a further step and  make  the  actual order  of  assessment.   The whole  activity  of  assessment beginning  with the filing of the return and ending with  an order  of assessment, falls within the jurisdiction  of  the appropriate  authority  and  no part of it can  be  said  to constitute  a  collateral  activity  not  specifically   and expressly  included in the jurisdiction of  the  appropriate authority  as such.  We are, therefore, satisfied  that  Mr. Sastri is not right when he contends that the finding of the appropriate  authority  that  a  particular  transaction  is taxable under the charging section of the Act, is a  finding on a collateral fact and CI/65-6 7 6 it  is  only  if  the  said  finding  is  correct  that  the appropriate authority can validly exercise its  jurisdiction to  levy  a  sales tax in respect  of  the  transactions  in question.  In fact, what we have said about the jurisdiction of the appropriate authorities exercising their powers under the  Act,  would  be  equally  true  about  the  appropriate authorities  functioning  either under Sale-,-tax  Acts.  or under the Income-tax Act. This question was incidentally considered by a Special Bench of  this  Court  in  Smt.   Ujjam  Bai  v.  State  of  Uttar Pradesh(1).   In  that  case,  the  petitioner,  Ujjam  Bai, challenged  the validity of -the sales tax levied on her  on the  ground  that the notification issued  on  December  14, 1957,   had   exempted  ’bides’,  like   those   which   the petitioner’s  firm  produced,  from payment  of  sales  tax. According  to the petitioner, the appropriate authority  had plainly misconstrued the notification when it held that  the bidis  produced ,by the petitioner’s firm were not  entitled to  claim  the  protection of the  said  notification.   The petitioner  had  moved  this  Court under  Art.  32  of  the Constitution.   Broadly  stated, the majority  decision  was that  though the notification may have been misconstrued  by the appropriate authority when it rejected the  petitioner’s contention  that the said bidis fell within the  purview  of the  notification, and so, were exempt from payment of  tax, no  relief could be granted to the petitioner under Art.  32 on the sole ground that the impugned order of assessment was based on a misconstruction of the notification in  question. The  Act under which the notification was issued was  valid; the validity of the ,notification itself was not  impeached; and  so, the narrow ground .which the Court had to  consider was   if   the  appropriate   authority   misconstrued   the notification and imposed a tax on a commodity .Which in fact fell  within its protection, could the validity of suck  ,an order be impeached under Art. 32 of the Constitution on  the ground  that  it contravened the fundamental  right  of  the petitioner  under Art. 19(1) (g) ? The two answers given  in accordance  with  the  majority  opinion  were  against  the petitioner;  and  so, the majority decision can be  said  to have  rejected the petitioner’s argument that a question  of jurisdiction  was  involved in the  misconstruction  of  the notification  in  question.   It  would  thus  appear   that according to the majority view, the question about the  tax- ability  of  a  particular  transaction  falls  within   the jurisdiction of the appropriate authorities exercising their powers under the taxing Act, and their decision in.  respect of  it cannot be treated as a decision on a collateral  fact the finding on which determines the jurisdiction of the said

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authorities. (1)  [1963]1 S.C.R. 778. 77 It is true that the separate concurring judgments  delivered by  learned Judges who spoke for the majority view  indicate that their approach to the several problems posed by the two questions  referred to the, Special Bench, was  not  uniform and they emphasised different aspects in somewhat  different ways; but in regard to that aspect of the matter with  which we  are concerned in the present appeal there appears to  be unanimity amongst them.  Indeed, even the minority  judgment which  radically dissented from the majority view in  regard to  the scope and effect of the powers of this Court  tinder Art. 32 and the extent of the fundamental right conferred on the citizen to move this Court by the said Article, does not appear  to  have  differed from the majority  view  on  this point. Whilst  we  are referring to the decision of this  Court  in Ujjam Bai’s(1) case, we would hasten to add that we are  not dealing  with the scope and effect of our powers under  Art. 32,  or with the powers of the High Courts under  Art.  226. Our  object in referring to the majority decision  in  Ujjam Bai’s(1)  case  is  merely to show that  the  tenor  of  the opinion expressed by the learned Judges in the said case  is in  support of the view that a finding recorded by a  taxing authority  as  to the taxability of  any  given  transaction cannot be said to be a finding on a collateral fact, but  is a  finding on a fact the decision of which is  entrusted  to the jurisdiction of such authority. Mr.  Sastri  has  no doubt referred  us  to  the  subsequent decision  of this Court in The State Trading Corporation  of India,  Ltd. v. State of Mysore (2) in which it  appears  to have  been held that the taxing officer cannot give  himself jurisdiction  to  tax  an  interState  sale  by  erroneously determining  the  character of the  sale  transaction.   The decision  on  the question about the character  of  he  sale transaction  seems to have been treated as a decision  on  a Collateral  fact.  With respect, we may point out  that  the majority  decision  in  Ujjam Bai’s(1) case  on  which  this conclusion is founded does not support that view . We ought, however,   to  add  that  in  the  case  of  State   Trading Corporation  of  India, Ltd. (2 as in the  earlier  case  of Ujjam Bali(1), this Court was dealing with a petition  filed under Art. 32; and as we have already indicated, we are  not called upon to consider the extent of our jurisdiction under Art.  32  when  such  questions are  brought  before  us  by citizens  for  relief on the ground that  their  fundamental rights have been contravened by assessment orders.  At  this stage,  we are only dealing with the question as to  whether Mr. Sastri is right (1) [1963] 1 S.C. R. 778. (2) [1963] 3.S.C.R. 792. 78 in   contending   that  an  erroneous  conclusion   of   the appropriate authority on the question about the character of the sale transactions on which the appellant has been taxed, can be said to be without jurisdiction.  In other words,  if the appropriate authority, while exercising its jurisdiction and  powers under the relevant provisions of the Act,  holds erroneously  that a transaction,. which is an outside  sale, is not an outside sale and proceeds to levy sales-tax on it, can  it  be  said  that  the  decision  of  the  appropriate authority  is  without jurisdiction?  In our  opinion,  this question  cannot  be  answered in  favour  of  Mr.  Sastri’s contention.   Whether  or  not  such  a  conclusion  can  be

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challenged   under  Art.  226  or  under  Art.  32  of   the Constitution,  and  if yes, under  what  circumstances,  are matters  with  which  we are not concerned  in  the  present proceedings.   For the purpose of construing s. 20,  we  are not  prepared  to  hold  that  an  assessment  based  on  an erroneous   finding about the character of the  transaction, is  an  assessment   without jurisdiction and  as  such,  is outside the purview of s. 20 of the- Act.  We would like  to repeat  that  it  is  only  this  narrow  question  we   are considering in the present appeal. Reverting then to s. 20, it seems to us plain that the words used in this section are so wide that even erroneous  orders of assessment made would be entitled to claim its protection against the institution of a civil suit.  Several  decisions have been cited before us where similar questions have  been considered.   We  may usefully refer to some  of  them.   In Secretariat- of State, represented by the Collector of South Arcot v. Mask and Company(1) the Privy Council had  occasion to consider the effect of the provision contained in s.  188 of  the Sea Customs Act (VIII of 1878).  The said  provision was  that  every.  order passed in  appeal  under  the  said section shall, subject to the power of revision conferred by s.  19  1, be final.  Mask & Co. had instituted  a  suit  in which  it  sought to recover duty collected  from  it  under protest on the around that it was illegally recovered.   The trial  Court had rejected the claim on the ground  that  the suit was barred under s. 188.  On appeal, the High Court  of Madras  took  a different view and held that  the  suit  was competent.   The Privy Council reversed. the  conclusion  of the  High Court and confirmed the view, taken by  the  trial Judge.  It would be noticed that the relevant words on which the controversy between the parties as to the competency  of the  suit  in  that  case had to be  resolved,  were  no  as emphatic  as they are in s. 20, and yet, the  Privy  Council upheld  the plea that the suit was barred.  It is true  that in the course (1)67 I.A. 222. 79 of  the discussion, the Privy Council has observed that  "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" (p. 236).  In the present case, we are not called upon to consider the     merits  of  these  observations  or their scope and effect. In  Raleigh Investment Company Ltd. v.  Governer-General  in Council(1),  section 67 of the Indian Income-Tax Act (XI  of 1922) which barred a suit, fell to be considered.  The Privy Council held that the said provision barred a suit where the plaintiff  sought to challenge an assessment order  made  by the appropriate tax authorities under the provisions of  the said  Act.  In construing the effect of the words  "no  suit shall  be brought in any civil court to set aside or  modify any  assessment  made  under this Act",  the  Privy  Council thought  it necessary to enquire whether the  Act  contained machinery which enabled an assessee effectively to raise  in the  courts the question whether a particular  provision  of the  Income Tax Act bearing on the assessment made is or  is not ultra vires.  "The presence of such machinery", observed the  Privy Council, "though by no means conclusive,  marches

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with   a  construction  of  the  section  which  denies   an alternative  jurisdiction to enquire into the same  subject- matter.  The absence of such machinery would greatly  assist the  appellant on the question of construction and,  indeed, it  may be added that, if there were no such machinery,  and if  the section affected to preclude the High Court  in  its ordinary  civil  jurisdiction from considering  a  point  of ultra  vires, there would be a serious question whether  the opening  part  of  the section, so far as  it  debarred  the question  of  ultra  vires being debated,  fell  within  the competence  of  the  legislature".  In  other  words,  these observations  indicate that the Privy Council took the  view that  where  an  appropriate  authority  is  exercising  its jurisdiction to levy a tax in respect of any transaction, it would  be  competent to such an authority  to  consider  the validity  of  the taxing provisions themselves.  We  do  not think  it is necessary for us to examine this aspect of  the matter  in the present appeal, because the validity  of  the charging  section is not impeached in the  present  proceed- ings.   It  is  true  that Mr.  Sastri  has  challenged  the validity  of S. 20, but the said section has no  bearing  on the assessment made, and (1)74 LA.. 50, at pp. 62-63. 80 so, that plea has no relevance to the point which the  Privy Council was considering in the observation. to which we have just referred. On  the question of construction, Mr. Sastri has  relied  on two  decisions  of this Court to which it  is  necessary  to refer  before  we part with this topic.  In  The  Provincial Government  of  Madras  (Now  Andhra  Pradesh)  v.  .J.   S. Basappa(1),  it  was held by this Court  that  the  finality attached  to  orders passed in appeal by s. II  (4)  of  the Madras General Sales Tax Act (IX of 1939) was a finality for the  purposes  of  the said Act and 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.  We ought to add that this decision was based on the  fact  that the said Act at the relevant  time  did  not contain s. 18A which came into force on May 15, 1951; ind it was  s.  18A which was construed by this Court in  Firm  and Illuri Subaya Chetty Mr. Sastri has also referred to the majority decision in the case  of  Bharat Kala Bhandar Ltd. v.  Municipal  Committee, Dhamangaon(3).   In  that case, according  to  the  majority decision, s. 84 (3) of the Central Provinces  Municipalities Act, 1922 which deals with "bar of other proceedings did not make incompetent the suit with which the Court was  dealing. The said section provides that :               "No objection shall be taken to any valuation,               assessment,  levy, nor shall the liability  of               any   person  to  be  assessed  or  taxed   be               questioned,  in  any other manner  or  by  any               other authority than is provided in this Act". According  to  the majority view, the bar  created  by  this provision   did   not  amount  to  the  exclusion   of   the jurisdiction  of  the civil court to entertain a  claim  for refund of the tax alleged to be illegally recovered, because there  were  no words in the said provision which  could  be construed  as  excluding civil court’s  jurisdiction  either expressly  or impliedly.  The minority view,  however,  held that a suit for refund was barred. We do not think Mr. Sastri can successfully advance his case before us by relying on these two decisions.  After-all,  as the Privy Council observed in the case of Mask & Co.(4), the

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determination  of the question as to whether S. 20 bars  the present  suit, must rest on the terms of s.  20  themselves, because that is the provision (1)  15 S.T.C. 144. (3)  C. A. No. 600 of 1964.  Decided March 26, 1965 (2)  [1964] 1 S.C.R. 752. (4)  67 I. A. 222. 81 under  consideration  "and  decisions  on  other   statutory provisions are not of material assistance, except in so  far as  general  principles of construction are laid  down"  (p. 237).   Besides, in regard to these two decisions,  we  may, with respect, point out that they do not purport to lay down a general rule that the jurisdiction of a civil court cannot be  excluded unless it is specifically provided that a  suit in a civil court would not lie.  In fact, as the decision of the  Privy  Council in the case of Mask & Co.(1  shows,  the jurisdiction  of a civil court can be excluded even  without such  an  express provision.  In every  case,  the  question about  the  exclusion of the jurisdiction  of  civil  courts either  expressly  or  by  necessary  implication  must   be considered  in the light of the words used in the  statutory provision  on  which the plea is rested, the scheme  of  the relevant  provisions,  their object and their  purpose.   We would also like to make it clear that we do not think it  is necessary  in  the  present case  to  consider  whether  the majority opinion in the case of Bharat Kala Bhandar  Ltd.(2) was  justified  in casting a doubt on  certain  observations made  by  the Privy Council in Raleigh  Investment  Co.’s(3) case, or on the validity or the propriety of the  conclusion in respect of the effect of s. 67 of the Income-tax Act. Mr. Sastri has also invited our attention to the decision of the  House of Lords in Pyx Granite Co. Ltd. v.  Ministry  of Housing  and Local Government and Others(4).  In that  case, the House of Lords repelled the preliminary objection raised by  the  respondents that the court had no  jurisdiction  to grant  the  declarations asked for, since  by  the  combined effect  of  sections  15  and 17 of  the  Town  and  Country Planning  Act,  1947,  the decision of the  Minister  on  an application to determine whether permission was required was made  final  and  the  only method  of  determining  such  a question  was that provided by S. 17(1); and that  the  wide discretion  conferred  by s. 14 on the  Minister  to  impose conditions disentitled the company from coming to the  court for  a  declaration that the conditions  were  invalid.   In coming to the conclusion that the jurisdiction of the  civil court  was  not excluded, the House of Lord,,  noticed  that there was nothing in s. 17 or in the Act which excluded  the jurisdiction  of  the  court to grant  declarations;  s.  17 merely provided an alternative method of having the question determined by the Minister.  "It is a principle no,, by  any means to be whittled down", said Viscount Simonds, "that the subject’s   recourse  to  Her  Majesty’s  courts   for   the determination of his rights is not to be excluded except  by clear words.  That is, as McNair J. (1) 67 I.A. 222. (2) C.A. No. 600 of 1964.  Decided March 26,1965. (3) 74 I.A. 50. (4) [1960] A.C. 260 at p. 286. 82 called  it  in Francis v. Yiewsley and  West  Drayton  Urban District Council(1), a ’fundamental rule’ from which I would not  for my part sanction any departure".   Approaching  the task  of  construing  s. 17 from this  point  of  view,  his Lordship came to the conclusion that there was nothing in s.

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17  which  excluded the jurisdiction of the civil  court  to entertain  the  claim in question.  We do not see  how  this decision can afford any assistance to the appellant. There  is one more aspect of the matter which must  be  con- sidered  before  we  finally determine the  question  as  to whether  s. 20 excludes the jurisdiction of the civil  court in  entertaining  the present suit.  Whenever  it  is  urged before  a  civil  court that its  jurisdiction  is  excluded either  expressly or by necessary implication  to  entertain claims of a civil nature, the Court naturally feels inclined to  consider whether the remedy afforded by  an  alternative provision  prescribed by a special statute is sufficient  or adequate.  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 considerations  would be very important, and in  conceivable circumstances,  might 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 tribunal-,  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 relevance of this enquiry was accepted by the Privy  Council in  dealing  with  s. 67 of the Income Tax  Act  in  Raleigh Investment  Co.’s(2)  case  and that is the  test  which  is usually applied by all civil courts. In the present case, the appellant wants relief of refund of tax  which is alleged to have been illegally recovered  from it  by  the  respondent, and the ground on  which  the  said relief  is  claimed  is that at the time when  the  tax  was recovered,  the  appellant was under a mistake of  fact  and law.  According to the appellant, even the respondent  might have been laboring under the same mistake of fact, and  law, because the true constitutional and legal position in regard to the jurisdiction and authority of different States to (1) [1957] 2 Q.B. 136, 148. (2) 74 I.A. 50. 83 recover  sales  tax  in respect of  outside  sales  was  not correctly  appreciated  until  this  Court  pronounced   its decision  in The Bengal Immunity Co.’s(1) case.  That  being so,  can  it be said that the Act  provides  an  appropriate remedy  for recovering a tax alleged to have been  illegally levied  and collected, where the party asking- for the  said relief  pleads  a  mistake of fact and  law?   It  would  be noticed  that  this  inquiry  may  have  some  relevance  in construing the terms of S. 20, and it would be both relevant and   material   in   considering  the   question   of   the constitutionality  of  s. 20. That is the  two-fold  purpose which  such an inquiry would serve in the present case.   If we are satisfied that the Act provides for no remedy to make a claim for the recovery of illegally collected tax and  yet s.  20 prohibits such a claim being made before an  ordinary civil  court,  the Court may hesitate to construe S.  20  as creating  an absolute bar, or if such a construction is  not reasonably  possible,  the Court may seriously  examine  the question   about  the  constitutionality  of  such   express exclusion of the civil court’s jurisdiction having regard to the  provisions of Arts. 19 and 31 of the Constitution.   It

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is with this two-fold object that this aspect of the  matter must now be examined. Before proceeding to examine this matter, we ought to  refer to  the  decision of this Court in the  Sales  Tax  Officer, Banaras  & Others v. Kanhaiya Lal Mukundlal Saraf. ( 2 )  In that case, this Court has held that the term "mistake" in s. 72  of the Indian Contract Act comprises within its scope  a mistake of law as well as a mistake of fact and that, tinder that  section a party is entitled to recover money  paid  by mistake or under coercion, and if it is established that the payment,  even though it be of a tax, has been made  by  the party labouring under a mistake of law, the Party  receiving the  money  is bound to repay or return it though  it  might have  been paid voluntarily, subject, however, to  questions of estopped, waiver, limitation or the like.  Basin- himself on  this  decision, Mr. Sastri contends that since  the  Act does  not provide for adequate remedy to  recover  illegally collected  tax from the respondent, we should either  put  a narrow construction on s. 20 so as to permit institution  of a  suit  like the present, or, in  the  alternative,  should strike it down as constitutionally invalid.  If a citizen is deprived  of his property illegally by recovering  from  him unauthorisedly  an  amount  of  tax where  no  such  tax  is recoverable  from  him,  he  ought  to  have  a  proper  and appropriate  remedy to ventilate his grievance  against  the State.  Normally, such a remedy (1) [1955] 2 S.C.R. 603. (2) [1959] S.C.R. 1350. 84 would  be in the form of a suit brought before  an  ordinary civil court; it may even be a proceeding before a  specially appointed  tribunal tinder the provisions of a tax  statute; and  it can also be an appropriate proceeding  either  under Art. 226, or under Art. 32 of the Constitution. In  support of this contention, Mr. Sastri has  referred  to the decision of the Privy Council in Commissioner for  Motor Transport  v. Authority Ranger- & Co. Pty., Ltd.   State  of New South wales and Other v. edmund T. Lennon Pty,  Ltd.(1). In  that  case, s. 3 of the  State  Transport  Co-ordination (Barring  of  Claim and Remedies) Act,  1954  had  provided, inter- alia, that every cause of action against Her  Majesty or the State of New South Wales for the recovery of any sums collected  in relation to the operation of any public  motor vehicle in the course of or for the purposes of  inter-State trade  before,  the  commencement of  this  Act  which  were collected  pursuant  to  the  relevant  provisions  of   the principal Act, shall be extinguished.  When a claim made for the  refund of tax illegally recovered was resisted  on  the ground that it was incompetent in view of s. 3, it was  held that  the  denial  of the right to  recover  money  paid  in satisfaction  of chrges which were -illegal by virtue of  s. 92  of the Commonwealth of Australia  Constitution  offended equally  against s. 92.  In other words, where the  impugned statutory  provision  purported to extinguish  absolutely  a cause of action, it was struck down as unconstitutional. Let  us, therefore, examine the question as to  whether  the Act  with  which  we are concerned in  the  present  appeal, provides  for. a remedy to claim a refund of tax alleagd  to have  been  illegally  recovered.  Section  13  of  the  Act expressly  provide-,  for refunds.  It lays  down  that  the Commissioner  shall, in the prescribed manner, refund  to  a registered dealer applying in this behalf any amount of  tax paid  by  such dealer in excess of the amount due  from  him under  this  Act.   The proviso to  this  section  prescribe period of limitation of twenty-four months from the date  on

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which  the order of assessment was passed or  within  twelve months  of  the final order passed on appeal,  revision,  or reference  in respect of the order of assessment,  whichever period is later.  Then, we have s. 21 which provides for the remedy  of  an  appeal;  and S.  22  which  provides  for  a revisional  remedy.  It is significant that though s.  21(1) prescribes  a  period  of sixty days for appeal  and  s.  22 prescribes  a period of four months for revision,  under  s. 22B  the prescribed authority is given power to  extend  the period  of  limitation  if it is satisfied  that  the  party apply- (1)[1956] 3 All.  E.R, 106, 85 ing  for  such  extension  had  sufficient  cause  for   not preferring the appeal or making the application within  such period.  Section, 23A provides for rectification of mistake. It  is  thus  clear that the  appellant  could  have  either appealed or applied for revision and prayed for  condonation of  delay  on  the  ground  that  the,  mistake  which   was responsible  for the recovery of the tax  illegally  levied, was  discovered  on the 6th September, 1955,  becausesuch  a plea would have been perfectly competent tinder S. 22B.   In other   words,  if  the  appellant  had  pursued  a   remedy available, to it under s. 21 or s. 22 read with s. 22B,  its case would have been considered by the appropriate authority and the validity of the grounds set up by it for the  refund of  the  tax in question would have been  legally  examined. Therefore,  it cannot be said that even for the claim  which the appellant seeks to make in the present suit, there is no alternative  remedy prescribed by the Act.  This  conclusion serves a double purpose.  It makes it easier to construe the wide  words used in s. 20 and hold that they  constitute  an absolute  bar against the institution of the  present  suit, and  it also helps the respondent to repel the plea  of  the appellant  that  S.  20 if it is  so  widely  construed,  is unconstitutional.  Our conclusion, therefore, is that s.  20 should  be construed in the same manner in which s.  18A  of the Madras General Sales-Tax Act was construed by this Court in  Firm and Illuri Subbayya Chetty & Sons(1) and that  even on   this   wide   construction,   the   said   section   is constitutionally valid. This  conclusion, however, does not finally dispose  of  the appeal.   Though the appellant’s suit may be incompetent  in so  far as the appellant seeks for a decree for  refund,  it still remains to be considered whether its suit can be  said to  be  incompetent in so far as it seeks to  challenge  the validity  of  s. 20 itself.  It would be recalled  that  the alternative  claim made by the appellant in its  plaint  was that  s.  20  on  which  a plea of  bar  is  raised  by  the respondent,  is invalid.  The High Court has not  considered this aspect of the matter; but since the appellant has  been allowed to raise the point about the validity of section 20, we must deal with it. This point presents no difficulty whatever.  The bar created by s.     20 cannot obviously be pleaded where the  validity of  s. 20 itself is challenged.  That can of course be  done by  a separate suit.  In terms, S. 20 is confined  to  cages where the validity of assessment orders made tinder the  Act is  challenged.   ’Me  said  provision  cannot  take  in   a challenge to the validity of s. 20 itself, (1)[1964] 1 S.C.R. 752. 86 and so, we must hold that technically, the appellant’s  suit is competent in so far as it seeks to challenge the validity of  s.  20.   This  finding,  however,  is  of  no  material

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assistance to the appellant, because even after it  succeeds on  this  point,  it  has still to  face  the  plea  of  the respondent  that on the merits, the suit is barred;  and  on that  plea, the appellant must fail, because s. 20 is a  bar to  the appellant’s claim that the amount in question  which is  alleged to have been illegally recovered from it  should be  refunded to it.  That is a matter which  falls  directly within the mischief of s, 20. What  then is the ultimate position in this case?   The  Act Linder  which tax was recovered from the appellant is  valid and  so  is  the charging  section  valid;  the  appropriate authorities  dealt  -with  the  matter  in  regard  to   the taxability  of the impugned transactions in accordance  with the  provisions  of  the  Act and  in  consequence,  tax  in question   was  recovered  on  the  basis  that   the   said transactions  were  taxable under the  Act.   The  appellant contends  that the transactions were outside sales and  they did  not  and  could not fall under  the  charging  sect-ion because  of Art. 286, and it argues that the tax was  levied because  both the appellant and the appropriate  authorities committed  a mistake of fact as well as law in dealing  with the  question.  Assuming that such a mistake was  committed, the conclusion that the transactions in question fell within the  purview  of the charging section cannot be said  to  be without  jurisdiction or a nullity and the assessment  based even  on  such  an  erroneous  conclusion  would  claim  the protection of s. 20.  If, after discovering the mistake  the appellant  had moved the appropriate authorities  under  the relevant  provisions of the Act, its claim for refund  would have  been considered on the merits.  Having failed to  take recourse  to the said remedy, it may have been open  to  the appellant to move the High Court under Art. 226.  Whether or not in such a case, the jurisdiction of the High Court could have  been  effectively  invoked, is a matter  on  which  we propose  to  express  no opinion.  As we  have  pointed  out during the course of this judgment, we are not dealing  with the  scope and effect of the High Courts jurisdiction  under Art.  226  as well as the scope and effect of  this  Court’s jurisdiction under Art. 32 viv-a-vis such claims for  refund of tax alleged to have been illegally recovered. In the result, the appeal fails and is dismissed with costs. Appeal dismissed. 87