Ramsaran Das and Bros. Vs. Commercial
Tax Officer, Calcutta & Ors  INSC 312 (31 October 1961)
SINHA, BHUVNESHWAR P.(CJ) KAPUR, J.L.
CITATION: 1962 AIR 1326 1962 SCR Supl. (1)
Supreme Court-Practice-Appeal by special
leave from order of assessment-Maintainability- Statutory remedies to be
exhausted first- Constitution of India, Art. 136.
In respect of its business as a middleman
relating mainly to sales of coal and coke in the course of inter-State trade,
the appellant firm was assessed to Central sales tax under s. 8(2) of the Central
Sales Tax Act, 1956, by the Commercial Tax officer. The appellant without
availing itself of the remedies under the Act, applied for and obtained special
leave to appeal under Art. 136 of the Constitution of India directly against
the order of assessment When the appeal was taken up for hearing, the question
was raised as to whether it should be entertained, when even the facts had not
been finally determined by the final fact- finding authority under the Act, nor
had the jurisdiction of the High Court been invoked to exercise its powers
under the Act.
Held, that an assessee is not entitled
ordinarily to come up to the Supreme Court directly against the judgment of the
Assessing Authority and invoke the Court's jurisdiction under Art. 136 of the
Constitution without first exhausting the remedies provided by the taxing
Mahadayal Premchandras v. Commercial Tax
Officer Calcutta,  S.C.R. 551 and The State of Bombay v. M/s. Ratilal
Vedilal,  2 S. C. R. 367, explained.
Chandi Prasad Chokhani v. The State of Bihar,
 2 S. G. R. 276 and Kanhaiyalal Lohia v, Commissioner of Income-Tax
Bengal,  2 S. C.
R. 839, followed.
^ Held, further, that in the present case, in
which there, were no special circumstances and in which the facts had not yet
been finally determined, the appeal must be considered to be incompetent.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 592 of 1960.
Appeal by special leave from the judgment and
order dated June 17, 1959, of the Commercial Tax officer, Calcutta, in case No.
54(c) of 1969-60.
277 N. a. Chatterjee and S. a. Mazumdar, for
B. Sen and P. E. Bose, for respondents Nos. 1
K. N. Rajagopal Sastri and T. M. Sen, for
respondent No. 3.
1961. October 31. The Judgment of the Court
was delivered by SINHA, a. J.-This is a direct appeal by special leave granted
by this court on September 7, 1969, against the order, dated July 17, 1959,
passed by the first respondent-the Commercial Tax officer-assessing the
appellant to central sales tax amounting to Rs. 42,647 odd, for the period July
30, 1957 to March 31, 1958, under the Central Sales Tax Act (LXXIV of
1956)-which hereinafter will be referred to as the Act. The second respondent
is the State of West Bengal, and the third respondent is the Union of India.
In view of the order we propose to make in
this ease, it is not necessary to state in any detail the facts and
circumstances leading up to this appeal. The appellant is a partnership firm,
under the Indian Partnership Act, with its principal place of business at 18,
Netaji Subhas Road, Calcutta, within the jurisdiction of the first respondent.
The appellant alleges that he carries on business of two kinds, namely, (1) of
a dealer in coal and coke, and (2) of a middleman bringing about sales of coal
and coke between colliery owners and consumers. In respect of its business as a
dealer, the appellant is a registered dealer under the Bengal Finance (Sales
Tax) Act (Bengal Act VI of 1941). Its second business as a middleman relates
mainly to sales of coal and coke in the course of interstate trade or commerce,
and the tax in question relates to this second branch of its business. The Act
came into operation in the State of West Bengal on July 1, 1957, when the
appellant 278 applied for and obtained a certificate of registration under the
Act on July 30, 1957. In May 1958, the appellant made its return under the Act
in respect of the period aforesaid, showing the turnover as nil. But in spite
of its showing cause against the proposed assessment, the first respondent
determined Rs.9,17,196 as the appellant's turnover in respect of the period
aforesaid and assessed central sales tax thereon at Rs. 42,617.82nP. under s.
8(2) of the Act, and issued Demand Notice. The appellant moved this Court and
obtained the special leave to appeal from the order of the first respondent
making assessment and later a demand on the basis of the assessment.
From the statement of facts given above, it
is clear that the appellant did not exhaust all his remedies under the Act
itself; and came directly to this Court as if the order of Assessment passed by
the first respondent was final. The question, therefore, arises whether this
court should entertain the appeal, when even the facts have not been finally
determined by the final fact-finding authority under the Act, nor has the
jurisdiction of the High Court been involved to exercise its power under the
Act. But Mr. Chatterjee, on behalf of the appellant, has contended in the first
instance that the powers of this Court are wide enough to enable him to approach
this Court direct, when according to him, there had been an assessment of tax
without the authority of law. There is no doubt that the powers of this Court
under Art. 136 of the Constitution are as wide as they could be, because,
unlike the preceding articles of the constitution, there is no limitation that
the Judgment, decree or order should be final in the sense that the appellant
in this Court has exhausted all the remedies provided by law before invoking
the jurisdiction of this Court to grant "special leave to appeal from any
judgment, decree determination sentence or order in any case or matter passed
or 279 made by any Court or Tribunal in the territory of India." In spite
of the wide amplitude of the jurisdiction of this Court to entertain appeals by
special leave, this Court has imposed certain limitations on its own powers for
very good reasons, and has refused ordinarily to entertain such appeals when
the litigant has not availed himself of the ordinary remedies available to him
at law. But Mr. Chatterjee, on behalf of the appellant, invited our attention
to the decision of this Court in Mahadayal Premchandra v.
Commercial Tax officer, Calcutta (1) in which
this Court interfered with the order of assessment passed by the Commercial Tax
officer of Calcutta, and this Court had been moved by way of special leave to
appeal against the original order of the Taxing officer. It is claimed on
behalf of the appellant that decision completely covers the points in
controversy in the present case also. It is contended that was also a case,
like the present one of commission agents who had been charged sales tax. There
are several reasons why the authority of that decision cannot be invoked in
favour of the appellant on the preliminary question whether this Court should
at all entertain the appeal. In that case, in the reported decision, of this
Court, no such question, as we have to determine, had been raised. Apparently,
counsel for both the parties were anxious to have the final determination of
the controversy by this Court. Secondly, there were special circumstances in
that case, which are not present in the instant case. The most outstanding
feature of that case was, as pointed out by this Court, that the Assessing
Authority had not exercised its own judgment in the matter of the assessment in
question. The Assessing Authority had, contrary to its own judgment, taken
instructions from the Assistant Commissioner and followed those directions This
Court had also pointed out that even (1)  S. C. R. 551.
280 though the Assessing Authority was
satisfied on the materials placed by the assessee that he was not liable to pay
sales tax, he carried out the directions of a superior officer. This Court
further pointed out that there had been complete failure of justice on account
of the, fact that the assessee had been given no opportunity to meet the points
made by the Assistant Commissioner, and the assessment order was made behind
his back. The Court was led to make the following very significant observations:
"The procedure adopted was, to say that
least, unfair and was calculated to undermine the confidence of the public in
the impartial and fair administration of the sales-tax Department concerned. We
would have, simply on this ground, set aside the assessment order made by the
first respondent and remanded the matter back to him for his due consideration
in accordance with law, but as the matter is old and a remand would lead to
unnecessary harassment of the appellants, we have preferred to deal with the appeal
on merits." (p. 560).
It was in those circumstances that this Court
went into the whole controversy on its merits and determined the appeal in
favour of the assessee.
That case, therefore, in no precedent in
favour of the appellant.
The next case relied upon by the counsel for
the appellant is The State of Bombay v. M/s. Ratikal Vadilal(1). That was a
case in which the State of Bombay had appealed to this Court on special leave
against the order of the Sales Tax Tribunal, Bombay, by which the Tribunal had
allowed the appeal before it and set aside the order of the Collector of Sales
Tax, under the Bombay Sales Tax Act. The respondents in that case were
commission agents doing business as clearing and (1)  2 S.C.R. 367 281
transport contractors. They had applied to the Collector of Sales Tax, Bombay,
for the determination of the question if they could be called
"dealers" within the meaning of the Act after giving the facts and
circumstances of their case. In that case also no steps had been taken to have
a reference made to the High Court, and this Court observed that it has been
frequently noticed that appeals had been filed to this court without exhausting
all the remedies open to appellants and that ordinarily this Court would not
allow the High Courts to be bypassed and the appropriate course for an
appellant was to exhaust all his remedies before invoking the jurisdiction of
this Court under Art. 136 of the constitution. But this Court went into the
merits of this case because both the parties invited the Court to do so and did
not insist upon the preliminary is an being decided. It is clear, therefore,
that neither of the two cases relied upon by counsel for the appellant is an
authority for the proposition that he can come up to this Court on special
leave directly against the judgment of the Assessing Authority, without
exhausting all his remedies under the Act.
There are cases in which this Court was moved
directly against the order of assessment, after ignoring the orders of the High
Court refusing to have a reference made, or decision the point referred,
against the assessee. In those circumstances, this Court refused to entertain
the appeal and held that the appellant was not entitled to invoke the
jurisdiction of this Court under Art. 136, without coming up in appeal from the
final decision inter parties given by the High Court. The latest decision of
this Court on that question is the case of Chandi Prasad Chokhani v. The State
of Bihar (1). In that case, the previous decisions of the Court have all been
considered on extenso. We are in entire agreement with what has been laid down
by this Court in that batch of cases. other decision of a Division Bench of (1)
 2 S. C. R. 276.
282 this Court is the case of Kanhaiyalal
Lohia v. Commissioner of Income tax, West Bengal (1). In that case, this Court
has taken the same view and dismissed the appeal as 'incompetent.' The present
case in a much simpler one, in which there are no special circumstances and in
which the facts have not yet been finally deter mined. It may also be noted
that the appellant has not challenged the vires of the Act or of any other law.
We, therefore, think that we should dismiss this appeal as 'incompetent',
without expressing any opinion on the merits of the controversy. It will be
open to the appellant to take such steps as it may be advised, in pursuing such
remedies as may be available to it under the law. The appeal is accordingly
dismissed, but in the circumstances without Costs.