ppeal No 652 of 1964 Appeal from the judgment and order dated May 7 1963 of the Rajasthan High Court in DB Civil Misc
Writ Petition No 157 of 1962
GC Kasliwal Advocate General for Rajasthan
KK Jain for the appellants
MD Bhargava and BD Sharma for the respondent
The Judgment of the Court was delivered by Siki J
This appeal by certificate of fitness granted by the Rajasthan High Court is directed against its judgment dated May 7 1963 quashing the order of assessment dated March 5 1962 made by the Sales Tax Officer Jodhpur City in so far as it levied sales tax on the turnover of Rs 239225275 np
The respondent Ms Shiv Ratan G Mohatta which is a partnership firm having its head office at Jodhpur hereinafter referred to as the assessee claimed before the Sales Tax Officer that they were not liable to be assessed to sales tax in respect of the above turnover because firstly the assessee was not a dealer within section 2f of the Rajasthan Sales Tax Act Rajasthan Act XXlX of 1954 with respect to this turnover and secondly because the sales were in the course if import within article 286 1b of the Constitution
Although the Sales Tax Officer set out the facts of the case relating to the second ground he deemed it sufficient to assess this turnover on the ground that the assessee was a dealer within section 2f of the Rajasthan Sales Tax Act without adverting to the second ground
The facts on which the assessee had relied upon to substantiate his second ground were these
The Zeal Pak Cement Factory Hyderabad Pakistan hereinafter called the Pakistan Factory manufactured cement in Pakistan
The Pakistan Industrial Development Corporation hereinafter called the Pakistan Corporation entered into an agreement with Ms Milkhiram and Sons P Ltd Bombay for the export of cement manufactured in Pakistan to India
The State Trading Corporation of India entered into an agreement with the said Ms Milkhiram  Sons for the purchase of inter alia 35000 long tons of cement to be delivered to it FOR Khokhropar in Pakistan on the border of Rajasthan
The State Trading Corporation appointed the assessee as its agent broadly speaking to look after the import and the sale of the imported cement
The modus operandi adopted by the assessee for the sale of the cement was as follows
It would obtain from a buyer in Rajasthan an order under an agreement a sample of which is on the record 73 The agreement fixed the price and the terms of supply
By one clause the assessee disclaimed any responsibility regarding delay in dispatch and non receipt of consignment or any loss damage or shortage in transit due to any reason whatsoever
The agreement further provided that all claims for loss damage or shortage etc during transit will lie with the carriers and our payments are not to be delayed on any such account whatsoever
 It was further provided in the agreement that the dues were payable in advance in full or 90 in advance and the balance within 15 days of billing plus sales tax and other local taxes
Clause 6 of the agreement is in the following terms A Post Card Loading Advice will be sent to you by the Factory as soon as the wagons are loaded in respect of your orders and it will be your responsibility to arrange for unloading the consignment timely according to Railway Rules
Ourselves
and the suppliers will not be responsible for demurrage etc
on any account whatsoever
If the consignment reaches earlier than the Railway Receipt it is the responsibility of buyer to arrange for and get the delivery timely against indemnity bond etc
All the Railway Receipts etc will be sent by registered post by the Suppliers in Pakistan
After this agreement had been entered into the assessee would send despatch instructions to the Pakistan Corporation
These instructions indicated the name of the buyer consignee and the destination and provided that the railway receipt and DA should be sent by registered post to the consignee
These instructions were sent with a covering letter to the Pakistan Corporation requesting that these instructions be passed on to the Pakistan Factory for necessary action
The Pakistan Corporation would then forward these despatch instructions to the Zeal Pak Cement Factory
Later the Pakistan Factory would advise the consignee that they had consigned to the State Bank of India Karachi the particular quantity as per enclosed railway receipt and invoice
 The State Bank of India Karachi would endorse the railway receipt in favour of the consignee and send it to him by post
The consignee would take delivery either by presentation of the railway receipt or by giving indemnity bond to the Station Master undertaking to deliver the railway receipt on its receipt
The Sales Tax Officer did set out most of these facts and the contentions of the assessee in the assessment order but disposed of the case with the following observations All the above went to prove that the assessee was an Agent of the non resident dealer for the supplies in the State
The Assessee was an importer and hence submitted an application to the Custom Authority for the same
It booked orders and issued sale bills
Under the terms of an agreement of appointment of Agent sale was to be effec 74 ted by the Agent
Again while obtaining orders from the buyers under condition 5 Sales Tax was to be paid by the buyers to the assessee
Thus to all intents and purposes the assessee is a dealer who is liable for payment of Sales Tax to the State
They have rightly collected this amount from the buying dealers and retained with them
This should come to the Government
We can find no discussion in the order on the question raised by the assessee that the sales were made in the course of import within article 2861b of the Constitution
The assessee then filed a petition under article 226 of the Constitution and raised two contentions before the High Court namely 1 that the Sales Tax Officer failed to consider the impact and the effect of article 2861b on the facts of the case and 2 that the Sales Tax Officer illegally held that the petitioner for all intents and purposes was a dealer liable to pay sales tax
The State raised an objection to the maintainability of the petition on the ground that the petitioner should have availed of the alternative remedy of appeal provided under the Rajasthan Sales Tax Act but the High Court overruled this objection on the ground that the contention of the petitioner is that in view of article 2861b of the Constitution the respondent had no jurisdiction to assess the petitioner to pay the sales tax on the sale of goods in the course of the import into the territory of India and that even if there was no total lack of jurisdiction in assessing the petitioner to pay sales tax
the principle enunciated in AV Venkateswarn v Ram chand Sobharaj Wadhwani 1 applied and it was a case which should not be dismissed in litnine
Then the High Court proceeded to deal with the merits of the case
It first dealt with the question whether the petitioner was a dealer within the meaning of section 2f of the Rajasthan Sales Tax Act and came to the conclusion that the petitioner must be deemed to be a dealer within the said section 2f
Then it proceeded to deal with the question whether the sales had taken place in the course of import
The High Court held that in the circumstances of the case these sales had not occasioned the movement of goods but it was the first sale made by Ms Milkhiram and Sons to the State Trading Corporation which had occasioned the movement of goods
Secondly it held that in the circumstances of the case the property in goods after the delivery had been taken by the petitioner on behalf of the State Trading Corporation passed to the State Trading Corporation and simultaneously to the ultimate buyers
Thus the property in the 1  75 goods passed to the ultimate buyers in Rajasthan when the goods had not reached the territory of India and were in course of import
In view of the authority of their Lordships of the Supreme Court in J V Gokal and Co Private Ltd vs The Assistant Collector of Sales Tax Inspection  Others   it must be taken that the sale took place when the goods were in the course of the import and they should not be liable to the payment of the Sales Tax by virtue of article 2861b
In the result the High Court quashed the order of assessment in so far as it sought to levy tax on the turnover in dispute
The Sales Tax Officer Jodhpur and the State of Rajasthan having obtained certificate of fitness from the High Court filed this appeal
The learned Advocate General has raised two points before us First on the facts of this case the High Court should have refused to entertain the petition and secondly that it has not been established that the cement was sold in the course of import within article 2861b
Regarding the first point he urges that an appeal lay against the order of the Sales Tax Officer no question of the validity of the Sales Tax Act was involved and the taxability of the turnover depended on where the property passed in each consignment
This involved consideration of various facts and according to himthe crucial facts had not been brought on the record by the assessee on whom lay the onus to establish that the sales were in the course of import
He says that the assessee should have proved that each railway receipt was endorsed by the State Bank of India Karachi to the buyer before each consignment crossed the frontier
We are of the opinion that the High Court should have declined to entertain the petition
No exceptional circumstances exist in this case to warrant the exercise of the extraordinary jurisdiction under article 226
It was not the object of article 226 to convert High Courts into original or appellate assessing authorities whenever an assessee chose to attack an assessment order on the ground that a sale was made in the course of import and therefore exempt from tax
It was urged on behalf of the assessee that they would have had to deposit sales tax while filing an appeal
Even if this is so
does this mean that in every case in which the assessee has to deposit sales tax he can bypass the remedies provided by the Sales Tax Act Surely not
There must be something more in a case to warrant the entertainment of a petition under article 226 something going to the root of the jurisdiction of the Sales Tax Officer something to show that it would be a case of palpable injustice to the assessee to force him to adopt the remedies provided by the Act
But as the High Court chose to entertain the petition we are not inclined to dismiss the petition on this ground at this stage
11960 2 SCR 852
76 Regarding the second point the learned Advocate General argues that the onus was on the assessee to bring his case within article 2861b of the Constitution in respect of the sales to the various consignees
He says that there is no evidence on record as to when the State Bank of India endorsed the railway receipt in favour of the ultimate buyer in respect of each consignment and without this evidence it cannot be said that the title to the goods passed to the ultimate buyer at Khokhropar or in the course of import
He further urges that it would have to be investigated in each case as to when the State Bank endorsed the railway receipt and when the goods crossed the customs barrier
He says that it is not contested that the ultimate buyer took delivery of goods without producing the railway receipt by virtue of special arrangements entered into with the railway and according to him
it is only when the delivery was taken by the buyer in Rajasthan that the title passed
By that time according to him the course of import had ceased
We do not think it necessary to consider the various arguments addressed by the learned Advocate General or the soundness of the view of the High Court on this point because we are of the opinion that the High Court should not have gone into this question on the facts of this case
The Sales Tax Officer had not dealt with the question at all and it is not the function of the High Court under article 226 in taxing matters to constitute itself into an original authority or an appellate authority to determine questions relating to the taxability of a particular turnover
The proper order in the circumstances of this case would have been to quash the order of assessment and send the case back to the Sales Tax Officer to dispose of it according to law
Under the Rajasthan Sales Tax Act and other Sales Tax Acts the facts have to be found by the assessing authorities
If any facts are not found by the Sales Tax Officer they would be found by the appellate authority
and it is not the function of a High Court to find facts
The High Court should not encourage the tendency on the part of the assesses to rush to the High Court after an assessment order is made
It is only in very exceptional circumstances that the High Court should entertain petitions under article 226 of the Constitution in respect of taxing matters after an assessment order has been made
It is true as said by this Court in A V Venkateswarn vs Ramchand Sobharaj Wadhwani1 that it would not be desirable to lay down inflexible rules which should be applied with rigidity in every case but even so when the question of taxability depends upon a precise determination of facts and some of the facts are in dispute or missing the High Court should decline to decide such questions
It is true that at times the assessee alleges some additional facts not found in the assessment order and the State after a fresh investigation admits these facts but in a petition under article 11962 1 SCR 753 77 226 where the prayer is for quashing an assessment order the High Court is necessarily confined to the facts as stated in the order or appearing on the record of the case
In this case as already indicated we have come to the conclusion that the High Court should not have decided disputed questions of fact but should merely have quashed the assessment order on the ground that the Sales Tax Officer had not dealt with the question raised before him and remanded the case
Accordingly
we allow the appeal set aside the order of the High Court quash the assessment order in so far as it relates to the turnover of Rs 239225275 up and remit the case to the Sales Tax Officer to decide the case in accordance with law
He will find all the facts necessary for the determination of the question and come to an independent conclusion untrammeled by the views expressed by the High Court
We may make it clear that we are not expressing any view whether the finding of the High Court that the property in the goods passed simultaneously at Khokhropar to the State Trading Corporation and the ultimate buyer is correct or not
There would be no order as to costs in this appeal
Appeal allowed


Summary:
The Sales Tax Officer rejected the assessed s claim that he was not liable to be assessed to sales tax in respect of certain sales of cement imported from Pakistan because i he was not a dealer within the meaning of s2f of the Rajas than Act 29 of 1954 and ii the sales in question were in the course of the import within the meaning of article 2861b of the Constitution
In the order of assessment there was no discussion of the question of applicability of article 2861 b
The assessee therefore filed a petition under article 226 challenging the assessment order on the grounds taken before the Sales Tax Officer and also claiming that the latter had failed to consider the impact and effect of article 2861bon the facts of the case
The State objected to the maintainability of the petition on the ground that the petitioner should have availed of the alternative remedy of appeal provided under the Rajasthan Sales Tax Act but the High Court overruled this objection for the reason inter alia that the petitioner had challenged the appellant s jurisdiction to assess him to
sales tax in view of the
provisions of article 2861 b
Upon dealing with the merits of the case the High Court held that on the facts of the case it was clear that the sales in question took place when the goods were in the course of import and therefore by virtue of article 2861b were not liable to sales tax
The court therefore quashed the order of assessment
On appeal to this Court it was contended on behalf of the State that the High Court should have refused to entertain the petition as many of the crucial facts had not been brought on the record by the respondent and further more it was not established that the cement was sold in the course of import into India
HELD The High Court should not have decided the disputed questions of fact but should merely have quashed the assessment order on the ground that the Sales Tax Officer had not dealt with the question raised before him and remanded the case
77 B OBITER The High Court should have declined to entertain the petition as in this case there were no exceptional circumstances to warrant the exercise of the extraordinary jurisdiction under article 226
It was not the object of article 226 to convert High Courts into original or appellate assessing authorities whenever the assessee chose to attack an assessment order on the ground that a sale was made in the course of import and was therefore exempt from tax
The fact that an assessee might have to deposit sales tax when filing an appeal could not in every case justify his bypassing the remedies provided by the Sales Tax Act
There must be something more in a case to warrant the entertainment of a petition under article 226 something going to the root of the jurisdiction of the Sales 72 Tax Officer something to show that it would be a case of palpable injustice to the assessee to force him to adopt the remedies provided by the Act
75 G H AV Venkatesweran vs Ramchand Sobhraj Wadwani AIR  referred to