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CASE NO.: Appeal (civil)  2726 of 2008

PETITIONER: M/S MITSUBHISHI CORPORATION

RESPONDENT: STATE OF KARNATAKA & ORS

DATE OF JUDGMENT: 10/04/2008

BENCH: S.H. KAPADIA & B. SUDERSHAN REDDY

JUDGMENT: JUDGMENT

                            IN THE SUPREME COURT OF INDIA

                             CIVIL APPELLATE JURISDICTION

                              CIVIL APPEAL NO. 2726 OF 2008                               (Arising out of SLP(C) No.11166/2007)

M/S MITSUBHISHI CORPORATION                                              ...APPELLANT (S)

                                             VERSUS

 STATE OF KARNATAKA & ORS.                                                  ...RESPONDENT(S )

                                            ORDER

           Leave granted.

           The short but important question of law which arises for determination in this C ivil

 Appeal is whether the subject transaction is an interstate sale or not under Section 3(a)  of the

 Central Sales Tax Act, 1956.

           In our view, the learned Single Judge was right in coming to the conclusion that  the

 matter required interpretation of various documents and adjudication on numerous facts.

 That, there is a hierarchy of Authorities before whom the assessee could have obtained red ress

 and since the assessee had failed to prefer an appeal to the First Appellate Authority und er

 Section 20 of Karnataka Sales Tax Act, 1957, the assessee should be directed to exhaust th e

 appeal provisions under the said 1957 Act. In this connection, it may be noted that the

 assessee preferred Writ Petition to the High Court against the Order of Assessment,

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 without exhausting the provisions concerning appeal under Section 20 of the 1957 Act.

 However, the Division Bench in the present

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case has gone into the merits of the case and has decided the matter against the assessee. W e

are of the view that the Division Bench should not have interfered with the impugned order

passed by the learned Single Judge in directing the assessee to exhaust statutory remedy

under the Act, particularly, when disputed facts arose for determination which warranted

adjudication by the Authorities under the Act.

         Accordingly, we set aside the impugned judgment of the Division Bench and restore

the Order of the learned Single Judge directing the assessee to move in appeal under Section

20 of the 1957 Act.

         The assessee - appellant herein will move under Section 20 of the 1957 Act in

appeal within a period of four weeks from today. The delay, if any, stands condoned for the

simple reason that important question of law does arise and secondly, the assessee herein ha s

deposited substantial amount under the 1957 Act. We may further state that the appeal shall

be decided on merits without pre-deposit within two months of the date of the assessee filin g

its appeal. The First Appellate Authority is directed to dispose of the matter uninfluenced  by

the observations made in the impugned judgment.

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         Civil Appeal stands disposed of accordingly with no order as to costs.

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                ....................J.                  [ S.H. KAPADIA ]

New Delhi,       ....................J April 10, 2008   [ B. SUDERSHAN REDDY ]