il Appeals Nos
469 470506 507 and 529 to 534 of 1962
Appeals by special leave from the judgment and order dated December 18 1961 of the Madhya Pradesh High Court in Misc
Petition Nos 24 29 42 to 45 58 70 95 and 213 of 1960
WITH Petitions Nos 70 and 71 of 1962
Petition under article 32 of the Constitution of India for enforcement of Fundamental rights
Sachin Chaudhri B Sen J B Dada chanji O C Mathur and Ravinder Narain for the appellants in C As
469 and 47062 and the Petitioners in Petitions
Nos 70 and 71 of 62
A V Viswanatha Sastri R Ganapathy Iyer and G Gopalakrishnan for the respondent in C As
469 470 506 and 507 of 62 Respondents Nos 1 and 3 in C As
529 to 53462 and Respondent No 1 in Petn
Nos 70 and 7162
B Sen and I N Shroff for the appellants in C As
506 and 50762
175 N C Chatterjee Y section Dharmadhikaree and M section Gupta for the appellants in C As
529 to 534 of 62
I N Shroff for the respondents Nos 2 and 4 in C As
529 to 534 of 62
September 24
The judgment of the Court was delivered by GAJENDRAGADKAR J
These ten appeals and two writ petitions have been placed for hearing together in a group because they raise common questions of law
The appellants in these matters are all colliers holding mining leases under the Government of Madhya Pradesh for the extraction of coal from collieries situated in the Chhindwara District
The respondent Janapada Sabha Chhindwara has issued notices against them calling upon them to pay coal tax  for coal manufactured at the mines sold for export by rail or sold otherwise than for export by rail within the jurisdiction of the original Independent Mining Board for the said area It appears that the mining area in question was within the territorial limits of the Independent Mining Local Board which had the status and powers of a District Council under the Central Provinces Local Self Government Act 1920 hereinafter called the Act
The respondent Sabha is the successor of the said Mining Board and therefore claims to be entitled to continue the levy and recover the tax in question
On March 12 1935 the Mining Board exercising its powers under section 51 of the Act resolved to levy coal tax and accordingly the first imposition made by it received the sanction of the local Government on December 16 1935 as per Notification No 8700 2253 D VIII
This notification came into force from January 1 1936
On December 16 1935 the local Government notified the rules for the assessment and 176 collection of the tax which it had framed in exercise of the powers conferred on it by section 79 1 clauses xv xix and xxx
Rule 2 of these Rules provided that the tax shall be payable by every person firm or company holding a mining lease for coal within the limits of the Independent Mining Local Board s jurisdiction
Rule 3 provided that the tax shall be levied  three pies per ton on coal coal dust or coke manufactured at the mines sold for export by rail or sold otherwise than for export by rail within the territorial jurisdiction of the Independent Mining Local Board
In 1943 the words  coke manufactured at the mines were deleted from Rule 3 and the tax was confined to coal and coal dust
The rate thus prescribed was increased from time to time
On December 22 1943 the rate was made 4 pies per ton on July 29 1946 it was made 7 Pies per ton and on July 1 9 1947 it was made 9 pies
The Mining Board continued to recover the tax at the said rates until the Act was repealed in 1948 and in its place was enacted the Central Provinces and Berar Local Self Government Act 1948 No 38 of 1948
The respondent Sabha has now taken the place of the said Mining Board and has issued the notices against the several appellants calling upon them to pay the coal tax for the different periods mentioned in the said notices
The appellants in Civil Appeals Nos
469 and 470 of 1962 are  The Amalgamated Coalfields Ltd and The Pench Valley Coal Co Ltd They are companies in operated under the Indian Companies Act 1913 andor both have Shaw Wallace  Co Ltd as their Managing Agents
On August 23 1958 notices were served on the two appellants calling upon them to pay Rs 21898 64 np and Rs 118389 np respectively as tax assessed  9 pies per ton from January 1 1958 to June 30 1958 This tax was claimed in respect of coal which included coal despatched by the appellants outside the State of 177 Madhya Pradesh
The validity of these notices was challenged by the appellants in this Court by their Writ Petition No 31 of 1959
On February 10 1961 the said writ petition was dismissed by this Court and it was held that the notices served on them were valid Vide The Amalgamated Coalfields Ltd vs The Janapada Sabha Chhindwara1
On September 13 1960 and March 2 1961 two notices of demand were served on the appellants calling upon them to pay Rs 11677625 nP and Rs 6526119 nP respectively in regard to the tax assessed  nine pies per ton on all coal despatched by the appellants from their collieries for the half years ending June 30 1958
December 31 1958 June 30 1959 December 31 1959 June 30 1960 and December 31 1960
The appellants challenged the validity of these notices by a Writ Petition filed by them in the High Court of Madhya Pradesh on April 12 1961 No 95 of 1961
Whilst the said writ petition was pending before the High Court the appellants filed another writ Petition in the same High Court No 213 of 1961
By this writ petition the appellants challenged the validity of notices issued against them on June 9 1959 by which coal tax was demanded from them for a period between April 1 1951 to December 31 1957
This tax was levied in respect of coal despatched by the appellants outside the State of Madhya Pradesh
The amounts demanded were Rs 19214466 nP and Rs 6831936 nP respectively
These two petitions along with eight others were heard together by the High Court
So far as the appellants  petitions were concerned the High Court has held that the appellants  claims were barred by res judicata by reason of the earlier decision of this Court in the case of the Amalgamated Coalfields Ltd 1
The appellants then applied for and obtained special leave from 1  178 this Court on April 23 1962 and it is by special leave thus granted to them that they have come to this Court in Civil Appeals 469  470 of 1962
The appellants have also filed two Writ Petitions Nos 70  711962 under article 32 of the Constitution
By these writ petitions the two appellants challenged the validity of the notices served on them on Julie 9 1959 as well as on September 13 1960
The appellants  case is that these notices are illegal and without jurisdiction and so they want them to be quashed by an appropriate writ or order issued against the respondent in that behalf
Thus the two appellants the Amalgamated Coalfields Ltd and the Pench Valley Coal Co Ltd arc concerned with the two appeals Nos 469  4701962 and Writ Petitions 70  711962
The other appeals arise from the writ petitions filed in the High Court of Madhya Pradesh by the respective appellants which were tried along with the writ petitions filed by the Amalgamated Coalfields Ltd  Anr
In dealing with these writ petitions High Court has held that the decision of this Court is the case of Amalgamated Coalfields Ltd1 concludes the points raised by them in challenging the validity of the notices and so following the said decision the High Court has dismissed all the said petitions
The appellants applied for and obtained special leave to come to this Court against the said decisions and it is with the special leave thus granted to them that these appellants have come before us
Civil Appeal No 506 arises from the decision of the High Court of Madhya Pradesh dismissing the writ petition filed before it by the appellant the Central Provinces Syndicate P Ltd
By its writ petition the appellant had challenged the validity of the notice served by the respondent calling upon it to pay arrears of the tax amounting to Rs 2077688 nP being arrears from April 1 1951 to June 30 1959
1  179 It appears that for the said period the appellant had been taxed by the respondent but the said tax was not imposed on coal which had been transported by the appellant outside the limits of the State of Madhya Pradesh
The respondent now sought to reopen the assessment levied against the appellant for that period by including a claim for tax in respect of coal sold by the appellant outside the limits of the State
The High Court has rejected the Writ Petition and that decision has given rise to Civil Appeal No 506 of 1962
Civil Appeal No 507 of 1962 arises from a writ petition filed by the appellants Ms Kanhan Valley Coal Co Private Ltd in the High Court of Madhya Pradesh in which the validity of the notice issued by the respondent calling upon the appellants to pay the coal tax amounting to Rs 10970 as arrears from April 1 1951 to June 30 1959 has been challenged
The High Court has dismissed the writ petition and so the appellants have come to this Court by their Appeal No 5071962
Civil Appeals Nos
529 to 534 of 1962 similarly arise out of six writ petitions filed by the appellants Ms Newton Chickli Collieries P Ltd  five others in the High Court of Madhya Pradesh challenging the validity of the notices of demand served on them to recover by way of arrears coal tax for the periods mentioned in the notices in regard to coal sent by them outside the State of Madhya Pradesh for export
These writ petitions were dismissed by the High Court and the appellants have therefore come to this Court by appeals Nos
529 5341962
That in brief is the genesis of the ten appeals and two writ petitions which have been grouped together for hearing in this Court
It will thus be seen that Civil Appeals Nos
469  4701962 and Writ Petitions Nos
70  711962 raise a preliminary question about the applicability 180 of the doctrine of res judicata to writ petitions filed under article 226 or to petitions under article 32 whereas the said appeals and writ petitions as well as the other appeals raise an additional question about the validity of the notices issued against the respective appellants
We would therefore deal with civil appeals Nos
469 and 4 701962 and Writ Petitions Nos 70 and 711962
Our decision in these matters will govern the other appeals in this group
The first point which falls for our decision in these appeals is one of res judicata
The High Court has held that the challenge made by the appellants against the validity of the demand notices issued against them by the respondent is barred by res judicata by virtue of the decision of this Court in the earlier case brought by the appellants themselves before this Court
The Amalgamated Coalfields Ltd1 Before dealing with this point it is necessary to refer to the said decision
In that case the validity of the impugned notices was challenged on two grounds  it was urged that the levy of the tax by the Independent Mining Board was invalid at the date of its initial imposition in 1935 and so the respondent Sabha which was the successor of the said Mining Board could claim no authority to continue the said tax
This contention was based on the assumption that before the power conferred by section 51 of the Act could be exercised the previous sanction of the Governor General had to be obtained or that there should be fresh legislation in that behalf
This Court held that the Act having received the assent of the Governor General its validity cannot be challenged in view of the saving clauses in the proviso to section 80A 3 and section 842 of the Government of India Act 1915
That being so it was not open to any party to suggest that any subsequent amendments of the Government of India Act could affect the continued validity and operation of the Act
The second contention raised was one of construction
It was urged 1  181 that on a fair construction of section 51 the coal tax was excluded from the purview of the local authority
The This argument was based on the opening clause of section 51 which provided that its provisions would operate subject to the provision of any law or enactment for the time being in force
It was suggested that this clause took in the provisions of section 80A3 of the Government of India Act read with the Scheduled Taxes Rules framed under that section but this argument was also rejected
It appears that at the hearing of the petition the appellants also attempted to take an additional point against the validity of the
impugned notices on the ground that the rate of tax which had been increased from 3 pies to 9 pies per ton was invalid
The appellants  case was that this increase was effected after the commencement of the Government of India Act and so it was invalid
This argument was not considered by the Court because it was not even hinted in the petition filed by the appellants and the Court thought that it would not be proper to permit the appellants to raise that point at that stage
That is how the appellants  challenge to the validity of the impugned notices served on them on August 23 1958 was repelled and the writ petition filed by them in that behalf was dismissed
It appears that the authority of the Janapada Sabha to levy the impost under s51 of the Act was challenged on another ground in the case of Ram Krishna Ram Nath v Janapad Sabha 1
This time the attack against the competence of the janapad Sabha proceeded on the ground that in repealing the Act of 1920 the subsequent Act of 1948 had not provided for the continuance of the said power in the janapad Sabhas which were the successors of the Independent Mining Boards
Section 192c purported to provide that all rates taxes and cesses due to the District Council Local Board or Independent Local Board shall be deemed to be due to the Sabha to 1 1962 Supp 3 SCR 70 182 whose area they pertain
But it was obvious that this clause could apply to and save only rates taxes and cesses already due it did not authorise the imposition of fresh cesses taxes or rates in future
Having realised that the relevant provision did not save future imposts an amending Act was passed in 1949 by which the said saving was extended to include the right of the janapad Sabhas to continue the levy of the impugned tax and this amendment was made retrospective f from June 11 1948 when the parent Act had come into force
In the case of Ram Krishna 1 the validity and effectiveness of this amendment of 1949 was challenged
It was thus a basic challenge to the power of the janapad Sabhas to levy any impost on the ground that the subsequent amendment was invalid
This Court repelled the said challenge and held that the retrospective operation of the amendment was valid
According to this decision the Provincial Legislature was competent to legislate for the continuance of the tax provided the relevant conditions of s1432 of the Government of India Act 1935 were satisfied
These conditions required that the tax should be one which was lawfully levied by a local authority for the purposes of a local area at the commencement of Part III of the Government of India Act that the identity of the body that collects the tax the area for whose benefit the tax is to be utilised and the purposes for which it is to be utilised continue to be the same and that the rate of the tax is not enhanced nor is its incidence materially altered so that in substance it continues to be the same tax
Since these tests were satisfied by the impost levied by the janapad Sabha it was held that the impost was valid and that the retrospective amendment of s192 was effective
The present proceedings constitute a third challenge to the validity of the notices issued by the janapad Sabha and as we have already seen the 1 1962 Supp 3 SCR 70
183 challenge made by the appellants by their writ petitions before the High Court has been repelled on the preliminary ground that it is barred by res judicata
In that connection the first question to consider is whether the general principle of res judicata applies to writ petitions filed under article 32 of the Constitution
This question has been considered by a special Bench of this Court in the case of Pandit M section M Sharms vs Dr Shree Krishna Sinha 1
Chief justice Sinha who delivered the unanimous opinion of the Court has answered this question in the affirmative
In that connection the learned Chief justice has referred to an earlier decision of this court in Raj Lakshmi Dasi vs Banamali Sen 2 where it has been laid down that the principle underlying res judicata is applicable in respect of a question which has been raised and decided after full  contest even though the first Tribunal which decided the matter may have no jurisdiction to try the subsequent suit and even though the subject matter of the dispute was not exactly the same in the two proceedings
It ought to be added that the Tribunal which had tried the first dispute in that case was a Tribunal of exclusive jurisdiction
Then the points raised on behalf of the petitioner Sharma were considered and it was noticed that in substance they were the same points which had been agitated before this Court on an earlier occasion and had been rejected
In our opinion said the judgment the questions determined by the previous decision of this Court cannot be reopened in the present case and must govern the rights and obligations of the parties which as indicated above are substantially the same
 Thus this decision shows that even petitions filed under article 32 are subject to the general principle of res judicata
The question about the applicability of the doctrine of res judicata to the petitions filed under 1 2  184 article 32 came before this Court in another form in Daryao vs The State of U P 1 and in that case it has been held that where the petition under article 226 is considered on the merits as a contested matter and dismissed by the High Court the decision pronounced is binding on the parties unless modified or reversed by appeal or other appropriate proceedings under the Constitution and so if the said decision was not challenged by an appropriate remedy provided by the Constitution a writ petition filed in respect of the same matter would be deemed to be barred by res judicata
Therefore there can be no doubt that the general principle of res judicata applies to writ petitions filed under article 32 or article 226
It is necessary to emphasise that the application of the doctrine of res judicata to the petitions filed under article 32 does not in any way impair or affect the content of the fundamental rights guaranteed to the citizens of India
It only seeks to regulate the manner in which the said rights could be successfully asserted and vindicated in courts of law
The question in the present appeals however is somewhat different
The notices which are challenged by the appellants in the present proceedings are in respect of the tax levied for a period different from the period covered by the notices issued on August 23 1958 which were the subject matter of the earlier writ proceedings The Amalgamated Coalfields Ltd  2   
Where the liability of a tax for a particular year is considered and decided does the decision for that particular year operate as res judicata in respect of the liability for a subsequent year  In a sense the liability to pay tax from year to year is a separate and distinct liability it is based on a different cause of action from year to year and if any points of fact or law are considered in determining the liability for a given year they can generally be deemed to have been considered and decided in a collateral and incidental way
The 1  21  185 trend of the recent English decisions on the whole appears to be in the words of Lord Radcliffe that if is more in the public interest that tax and rate assessments should not be artificially encumbered with estoppels I am not speaking of course of the effect of legal decisions establishing the law which is quite a different matter even though in the result  some expectations may be frustrated and some time wasted vide Society of Medical Officers of Health vs Hope Valuation Officer 1
The basis for this view is that generally questions of liability to pay tax are determined by Tribunals with limited jurisdiction and so it would not be inappropriate to assume that if they decide any other questions incidental to the determination of the liability for the specific period the decisions of those incidental questions need not create a bar of res judicata while similar questions of liability for subsequent years are being examined
In that connection it would be interesting to refer to four English decisions
In the case of Broken Hill Proprietary Co Ltd and Municipal Council of Broken Hill 2 the question which fell for decision was how the average annual value of a mine for rating purposes had to be determined and it was held by the Privy Council that the said value was to be ascertained by dividing the value of the output during the three years by three not by multiplying it by 205 and dividing it by 365
One of the points which the Privy Council had to consider was whether a contrary decision reached by the High Court of Australia between the parties as to the valuation for a previous year operated as res judicata
In rejecting the plea that the principle of res judicata applied Lord Carson
observed that the decision of the High Court related to a valuation and a liability to a tax in a previous year and no doubt as regards that year the decision could not be disputed
The present case relates to a new question viz the valuation for a different year and the liability for that year
It is not 1  563 2 186 eadem questio and therefore the principle of res judicata cannot apply p 100
It however appears that in the same year the Privy Council came to a somewhat contrary decision in the case of Hoystead vs Commissioner of Taxation1 In that case the question which arose for decision was about the deduction claimable under ther elevant provision of the Land Tax Assessment Act 1916 Aust Upon the assessment for 1919 20 the Commissioner allowed only one deduction of 5000 lbs
contending that the beneficiaries were not joint owners within the meaning of the Act
The case was then stated to the full Bench which upheld the Commissioner s view and rejected the argument that the Commissioner was estopped from coming to that conclusion in view of his decision in a previous year
When the matter went before the Privy Council it reversed the decision of the Full Court because it held that the Commissioner was estopped even though in the previous litigation no express decision had been given whether the beneficiaries were joint owners it being assumed and admitted that they were and the Privy Council thought that the matter so admitted was fundamental to the decision then given
It would thus be seen that this decision applied the principle of res judicata even where there was no express decision on the point but the point had been conceded in the earlier proceedings
In 1960 the House of Lords had occasion to consider this question in the case of Society of Medical Officer of Health 2
We have already quoted one statement of the law from the speech of Lord Radcliffe in that case
In that case the main reason given for repelling the application of the principle of res judicata in rating cases was that the jurisdiction of the Tribunal which deals with those cases is limited in that its function begins with and ends with deciding the assessment or liability of a person for a terminable period
Besides it was 1 2  563
187 held that the position of a valuation officer is that of a neutral official charged with the recurring duty of bringing into existence a valuation list and he cannot properly be described as a party so as to make the proceedings a lis inter partes
In coming to the conclusion that the doctrine of res judicata would not apply in such cases Lord Radcliffe was influenced by the consideration that if decisions in rating cases are to be treated as conclusive for all time that Would be to impose a needlessly heavy burden upon the administration of rating p566
This decision purported to approve of the view taken in the case of the Broken Hill Proprietary Co Ltd1 and to distinguish the view taken in the Hoystead case
2 Lord Radcliffe had occasion to return to the same subject again in Gaffoor vs Income tax Commissioner
3 Speaking for the Privy Council Lord Radcliffe considered the problem of the application of res judicata to taxation cases examined it in detail and came to the conclusion that the said doctrine did not apply to tax cases in the sense that the decision for the levy of a tax for one year does not operate as res judicata in dealing with the question of a tax for the subsequent year
On this occasion emphasis was not placed so much on the limited nature of the jurisdiction of the Tribunal that deals with tax cases but it was held that even if the matter goes to a High Court on a statement of the case the decision of the High Court would also not create a bar of res judicata in dealing with the tax claim for a subsequent year  The critical thing said Lord Radcliffe  is that the dispute which alone can be determined by any decision given in the course of these proceedings is limited to one subject only the amount of the assessable income for the year in which the assessment is challenged
 He no doubt recognised that in the process of arriving at the necessary decision it was likely that the consideration of questions of law turning upon the construction of the ordinance or of other statutes or 1 2  3 1961 2 WLR794
188 upon the general law may be involved but he thought that the decision of those questions should be treated as collateral or incidental to what is the only issue that is truly submitted to determination pp 800 801
This decision would therefore support the appellants  contention that the High Court was in error in dismissing their writ petitions on the preliminary ground that they were barred by res judicata
In considering this question it may be necessary to distinguish between decision on questions of law which directly and substantially arise in any dispute about the liability for a particular year and questions of law which arise incidentally or in a collateral manner as Lord Radcliffe himself has observed in the case of the Society of Medical Officers of Health 1 that the effect of legal decisions establishing the law would be a different matter
If for instance the validity of a taxing statute is impeached by an assessee who is called upon to pay a tax for a particular year and the matter is taken to the High Court or brought before this Court and it is held that the taxing statute is valid it may not be easy to hold that the decision on this basic and material issue would not operate as res judicata against the assessee for a subsequent year
That however is a matter on which it is unnecessary for us to pronounce a definite opinion in the present case
In this connection it would be relevant to add that even if a direct decision of this Court on a point of law does not operate as res judicata in a dispute for a subsequent year such a decision would under article 141 have a binding effect not only on the parties to it but also on all courts in India as a precedent in which the law is declared by this Court
The question about the applicability of res judicata to such a decision would thus be a matter of merely academic significance
In the present appeals the question which arises directly for our decision is  does the principle 1  563
189 of constructive res judicata apply to petitions under article 32 or article 226 where the dispute raised is in respect of a year different from the year involved in a prior dispute decided by this Court  We have already noticed the points actually decided by this Court against the appellants on the earlier occasion vide The Amalgamated Coalfields Ltd1
One of the points sought to be raised was in regard to the validity of the increase in the rate of tax from 3 pies to 9 pies per ton and since this point had not been taken in the petition and relevant material was not available on record this Court refrained from expressing any opinion on it
The appellants contend that the order passed by this Court refusing permission to the appellants to raise this point on the earlier occasion does not mean that this Court has decided the point on the merits against the appellants it may mean that the appellants were given liberty to raise this point later but even otherwise the point has not been considered and should not be held to be barred by constructive res judicata 
It is significant that the attack against the validity of the notices in the present proceedings is based on grounds different and distinct from the grounds raised on the earlier occasion
It is not as if the same ground which was urged on the earlier occasion is placed before the Court in another form
The grounds now urged are entirely distinct and so the decision of the High Court can be upheld only if the principle of constructive res judicata can be said to apply to writ petitions filed under article 32 or article 226
In our opinion constructive res judicata which is a special and artificial form of res judicata enacted by section 11 of the Civil Procedure Code should not generally be applied to writ petitions filed under article 32 or article 226
We would be reluctant to apply this principle to the present appeals all the more because we are dealing with cases where the impugned tax liability is for different years
In dismissing the appellants  petitions on the ground of res judicata the High Court has no doubt referred to 1  190 article 141 under which the law declared by this Court is binding on all Courts within the territory of India
But when we are considering the question as to whether any law has been declared by this Court by implication such implied declaration though binding must be held to be subject to revision by this Court on a proper occasion where the point in question is directly and expressly raised by any party before this Court
Therefore we are inclined to hold that the appellants cannot be precluded from raising the new contentions on which their challenge against the validity of the notices is based
The first
ground urged by the appellants on the merits is that the levy authorised to be imposed by the Act and the Rules framed thereunder violates the fundamental rights guaranteed to the citizens under article 19 1 f of the Constitution and in support of this Arguments reliance is placed on the decision of this Court in Kunnathat Thathunni Moopil Nair vs The State of Kerala 1
In that case the impugned Act was struck down because it suffered from several serious infirmities it was confiscatory in character and its provisions in regard to the levy of the impost were so arbitrary and unreasonable that the Court took the view that the Legislature had completely ignored the legal position that the assessment of a tax on person or property was at least of a quasi judicial character
This conclusion was based on the examination of the relevant statutory provisions
in the present case we are not satisfied that this decision can assist the appellants at all because the nature of the statutory provisions and the Rules framed under the Act in the present appeals is entirely different
At this stage it is necessary to refer to the relevant statutory provisions and the Rules
Section 51 of the Act which in substance corresponds to section 90 of the Act of 1948 reads thus 1  191 51
1 Subject to the provisions of any law or enactment for the time being in force a District Council may by a resolution passed by a majority of not less than two thirds of the members present at a special meeting convened for the purpose impose any tax toll or rate other than those specified in sections 24 48 49 and 50
2 The first imposition of any tax toll or rate under sub section 1 shall be subject to the previous sanction of the Provincial Government
x x x X Sub section 3 and the proviso are not relevant for our purpose
Then we go to section 79 which confers power on the Provincial Government to make Rules
Section 79 1xv is relevant for our purpose
It provides that  The Provincial Government may make rules consistant with this Act and with reference if necessary to the varying circumstances of different local areas as to the assessment and collection of the cases and rates specified in sections 48 49  50 and of any tax toll or rate imposed under section 51 as to the maximum amounts or rates at which any of them may be imposed as to the prevention of evasion of assessment or payment thereof as to the agency by which they shall be assessed and collected and as to the manner in which account thereof shall be rendered by District Councils
 In pursuance of the powers conferred on the local Government by section 79 rules have been framed on December 16 1935
Rules 3 to 10 deal with the question of the impost of tax and provide how decisions made in that behalf by appropriate authorities 192 become final
Rule 3 prescribed the rate at 3 pies per ton Rule 4 provides that the figures reported by the concessionaires and the Railway companies half yearly to the Dy
Commissioner shall be the basis for the assessment of the tax
Under Rule 5 every mining lessee has to submit a statement half yearly
On receipt of the statement the assessment has to be made by the Chairman of the Independent Mining Local Board under Rule 6
A notice of demand follows under rule 7
Fifteen days  period is given for filing objections under Rule 8
Rule 9 provides for the Consideration and disposal of the objections and Rule 10 lays down that if no objection is filed the Chairman s assessment shall be final if any objection is received the Independent Mining Local Board s decision shall be final and shall be communicated to the assessee as soon as possible
It would thus be seen that the scheme of these Rules provides ample opportunity to the assessees to object to the notice of demand served on them and in fact the demand notices are substantially based on the figures supplied by the railway companies and the concessionaires and the statements submitted by the assessees themselves
Therefore it would be idle to suggest that the impost of the tax authorised by the relevant statutory provisions and the Rules is a capricious administrative or executive affair and so should be held to violate article 191f of the Constitution
Then it is urged that the demand of the tax  9 es per ton is invalid because it is inconsistent with Rule 3 which has prescribed the maximum rate permissible to be levied against the assessees
We have already noticed that section 791XV authorised the making of a rule as to the maximum amounts or rates at which any of the articles can be taxed
This was introduced by an amendment made in 1933 by CP Act VII of 1933 and so the argument is that Rule 3 which provides that the tax shall be levied  3 pies per ton must be deemed to pro 193 vide for the maximum rate which can be levied and that is 3 pies per ton and no more
This argument is no doubt well founded because Rule 3 will have to be read in the light of the power conferred on the local Government by section 79XV and that would mean that the rate of 3 pies per ton has been prescribed by the Rule of the maximum rate permissible
But this argument ignores the fact that this Rule has been subsequently deleted by a notification on September 6 1943 published in the Government Gazette on September 10 1943
When this notification was cited before us the appellants conceded that the argument based on the construction of Rule 3 was not available to them
Therefore the contention that Rule 3 prohibits the levy at a rate higher than 3 pies cannot succeed since the Rule itself has been subsequently deleted and was not a part of the Rules at the relevant time when the impugned notices were issued
It is then argued that the impost of the tax at the rate of 9 pies per ton is not valid because it does not comply with the requirements of section 512 of the Act and that raises the question of the construction of the said section
Section 511 authorises the imposition of the tax provided of course the procedure prescribed by it and the requirements laid down by it are satisfied
Sub Section 2 then lays down that the first imposition of any tax shall be subject to the previous sanction of the Provincial Government
The appellants contend that in the context the first im position means not only the first imposition in the sense of an initial imposition but it includes every fresh imposition levied at an increased rate
On the other hand the respondent Sabha contends that the first imposition means only the initial levy or impost and cannot take in subsequent imposts or levies In this connection it is relevant to remember that sub section 2 was added by the same Amending Act by which section 79XV was amended and 194 so it would not be unreasonable to assume that when the legislature gave power to the local Government to prescribe by rules the maximum rates permissible to be levied it introduced sub section 2 in section 51 because it was thought necessary that whenever the rates were changed the imposition of the tax at the increased rates should receive the previous sanction of the Government
If the respondent s construction is accepted it would mean that the respondent should obtain the previous sanction of the Government at the initial levy and thereafter may go on increasing the rate of the levy to any extent without securing the sanction of the Government in that behalf
Now that Rule 3 has been deleted and no maximum has been or can be prescribed by the Rules it would be unreasonable to hold that the respondent is given an unfettered and unguided authority to levy the impost in question at any rate it likes
Since no ceiling has been placed by the Rules in that behalf it would we think be fair to hold that if the rates are increased and levy is sought to be imposed on the altered rates the imposition of the levy at these altered rates should be deemed to be included in the express on first imposition under section 512
We are therefore inclined to accept the appellants  construction of section 512
That being so it is necessary to enquire whether the imposition of the tax  9 pies has received the previous sanction of the local Government
During the course of his arguments Mr Sastri for the respondent attempted to suggest that sanction had been obtained for the increase in the rates from time to time and a typed summary of the notifications issued in that behalf was supplied to us at the time of arguments
This summary refers to the three increments made in 1943 1946 and 1947 respectively to which we have already referred
The summary read as if the increments had been sanctioned by the State Government
But Mr Sachin Choudhury for the appellants contended that the 195 summary supplied by the respondent was incomplete and inaccurate and that the examination of the Gazette in which the notifications were published would show that the amendments in the rates had been made not with the previous sanction of the Government but by the Mining Local Board itself
Two of these notifications were then produced before us by the respondent and they supported the conten tion made by Mr Choudhury
Therefore the argument that the imposition  9 pies per ton has received the sanction of the Government must fail and so the impugned notices which seek to recover the tax from the appellants  9 pies per ton must be held to be invalid The respondent is entitled to levy tax only  3 pies per ton because that levy has received the sanction of the Government but if the respondent intends to increase the rate of the said tax it must follow the procedure prescribed by s512 provided of course it is open to the respondent to increase the said tax
There is yet another point on which the appellants are entitled to succeed and that has reference to the fact that the respondent is seeking to reopen some of the assessments made by it against the appellants
The argument is that once an assessment is made for a specific period it becomes final and it is not open to the respondent to demand additional amount by way of tax in respect of the said period
The genesis of the tax is somewhat interesting
It appears that roads were constructed by the Independent Mining Local Board at enormous cost at the request of the Mining interests and even debt had to be incurred by the Board for completing the work of the construction of roads
Since the mining companies received substantial benefit from these roads the Legislature thought of levying a tax on coal and that is the origin of the tax
When the first notification was issued on December 16 1935 it authorised and sanctioned the imposition by the Independent 196 Mining Local Board at Chhindwara in the Chhindwara District of a tax at 3 pies per ton on coal coal dust or coke manufactured at the mines sold for export by rail or sold otherwise than for export by rail within the jurisdiction of the Independent Mining Local Board
 This tax was recovered by the Board and thereafter by the respondent in respect of coal whether sold inside the district of Chhindwara or sold outside the district of Chhindwara or even outside the State of Madhya Pradesh
In other words the total coal produced by each mining lease holder substantially came to be taxed
But after the Constitution came into force doubts arose as to whether article 286 of the Constitution did not preclude the respondent from recovering tax in respect of coal exported out of the State of Madhya Pradesh and in view of the advice given to the respondent by the Government of Madhya Pradesh the respondent did not collect the tax in respect of coal which was exported by rail outside the State of Madhya Pradesh from about 1952
The respondent wanted to consult legal opinion on this point but the State Government refused permission to the respondent to incur expenditure in that behalf
Subsequently however this question came to be decided by the High Court of Madhya Pradesh in a writ petition filed by Ms Newton Chickli Collieries Pvt
 Ltd No 265 of 1957
The High Court held that the tax levied by the janapada Sabhas under s51 of the Act did not amount to a sales tax nor to an excise duty and so the respondent thought that it could levy tax even on coal exported by rail outside the State of Madhya Pradesh
In fact after this judgment was pronounced by the High Court on August 6 1958 the Provincial Government withdrew its instructions to the respondent not to levy tax on exported coal
That is how the respondent has issued notices against the appellants in respect of coal exported by rail out of the State of Madhya Pradesh in regard to the years for which assessment has already been levied against the 197 appellants for the coal not so exported and the contention of the appellants is that this reopening of the assessment is not permissible under the Rules
This contention appears to be well founded
We have already seen the scheme of the Rules and we have noticed that Rule 10 provides that if no objection is filed the Chairman s assessment shall be final and if an objection is received the decision of the Mining Board would be final
In other words the scheme clearly provides that at the end of each six monthly period the tax has to be assessed notices to be issued to the assessee his objections to be considered and the tax to be ultimately determined in the light of the decision on the said objections and under Rule 10 the two decisions specified therein become final
It may be that the Rules do not prescribe any limitation within which these steps have to be taken by the respondent for each period but that is another matter
In view of the provisions of Rule 10 it is difficult to hold that the respondent is entitled to reopen assessments already made and rendered final under the said Rule
There is no other provision for reopening assessment as we have under sections 34  35 of the Indian Income Tax Act and so
the respondent is not justified in issuing notices for the years which arc covered by assessment orders already passed
The finality provided for by Rule 10 will work as much against the respondent as against the assessees
In support of the appeals another argument was sought to be raised against the increase of the rates
It was urged that the tax is in the nature of an excise duty or a sales tax and therefore any increase in the said tax beyond the limit of 3 pies the continuance of which has been saved by the provisions of article 143 of the Government of India Act 1935 and article 277 of the Constitution will be invalid
This argument is based on the terms used 198 in the notification of December 16 1935
Since coal is described as manufactured at the mines the argument is that it is in the nature of an excise duty and since the notification also refers to coal sold for export by rail or sold otherwise than for export by rail it is  argued that it is a sales tax
On the other hand the respondent contends that it is neither a sales tax nor an excise duty and as such the rate can be increased subject of course to the requirements of section 51 2 of the Act
It appears that by notification issued on September 6 1943 the preamble of the Rules was modified by substituting for the words  coal coal dust or coke by coal and dust coal and by deleting the words  manufactured at the mines
Curiously enough these amendments have not been made in the original notification itself
We have already noticed that this latter notification deleted Rule 3
Some arguments were urged before us by learned counsel on both sides as to the effect of this notification which modified the preamble to the Rules
We do not however think it necessary to consider these arguments in the present appeals because of our conclusion that the impugned notices levying the tax  9 pies per ton are invalid for two reasons the increase in the rates has not been sanctioned by the State Government under section 51 2 and an attempt to recover at the increased rate the tax for the years already covered by assessment orders passed in that behalf is barred by Rule 10
The result is the appeals and the writ petitions are allowed and an appropriate direction or order is issued restraining the respondent from recovering the tax at a rate higher than 3 pies per ton and also restraining the respondent from recovering any additional tax in respect of the years for which tax has already been assessed against the appellants
The same will be the order in the other companion appeals
The 199 appellants will be entitled to their costs but one set of bearing fees will be taxed
Appeals and writ petitions allowed


Summary:
The appellant Devasthanam had certain properties granted to it in inam by the Rajas of Tanjore centuries ago which com prised salt pans
After the passing of Regulation 1 of 1805 which prohibited manufacture of salt except on account of the Government or with their express sanction the East India Company in 1806 took over possession of those properties and the agreement between the parties as recorded in the order passed on behalf of the Board of Revenue was as follows As the Government have taken charge of the pagoda salt pans and Sea Customs of Thopputhurai belonging to the above temple the sum of 1848 Pagodas shall be given to the temple annually in cash from the treasury being calculated on the average amount of 10 years  revenue besides which every possible assistance will be given to the temple The previous correspondence between the Collector and the Board of Revenue showed that the properties were intended to be acquired permanently for the purpose of manufacturing salt and compensation was determined on that basis
From 1886 till 1941 the appellant allowed the company and its successors the respondents 1 and 2 to be in quiet possession of the properties in dispute on receipt of the said annual compensation
Its case negatived both by the trial Court as well as the High Court in appeal was that the agreement represented a lease from year to year and it was contended on its behalf in this Court that in construing the document regard must be had to the limited powers of a manager of a Hindu Temple to alienate trust property and he must be held to have intended to act within his powers and not beyond them
Held that the transaction in question was a permanent lease and the appeal must fail
Although it is indisputable that in construing a document executed by the manager of a Hindu temple the fair and reasonable rule would be to treat it as executed in pursuance of his legitimate authority and not in breach of it that rule could have no application in the instant case for the facts that more than a century had admittedly elapsed since the document in question had been executed and further that the then manager 88 faced by the prohibition of the manufacture of salt by Regulation 1 of 1805 had no option in the interest of the Devasthanam itself but to enter into the agreement in order that he could provide for a recurring income to the temple could not be ignored
Bawa Magniram Sitaram vs Kasturbai Manibhai 1921 LR49 IA 54 applied
Maharanee Shibessouree Debta vs Mothoranath Acharjo 1809 LR 13 Moo
IA 270 Nainapillai Marakayar vs Ramanathan Chettiar 1923 LR 51
IA 83 and Palaniappa Chetty vs Deivasikamony Pandara 1917 LR 44 IA 147 referred to