Appeals Nos 494 496 of 1962
Appeal from the judgment and decrees dated March 12 1957 of the Andhra Pradesh High Court in AS Nos
566 to 568 of 1961
AV Viswanatha Sastri TVR Tatachari and BRGK Achar for the appellants
Bhimsankaram Chander Kohli and E Udayaratnam for respondents
November 20 1963
The Judgment of the Court was delivered by HIDAYATULLAH J
This judgment will dispose of Civil Appeals Nos 494 to 496 of 1962
The State of Andhra Pradesh which now stands substituted for the Provincial Government of Madras is the appellant
The respondent is one JS Basappa a groundnut oil merchant of Kurnool who was selling oil within the Province and also exported it to extra Provincial points
These three appeals concern salestax for the years 1944 45 1945 46 and 1946 47
They arise out of three suits filed by Basappa against the Provincial Government of Madras now represented by the Government of Andhra Pradesh the details of which are given below
For the year 1944 45 Basappa was assessed to sales tax amounting to Rs 12983 2 2 of which according to him a sum of Rs 1594 1 5 only represented sales within the Province
He claimed that the remaining sales took place outside the Province of Madras
He submitted that property in the goods remained with him till the export of the goods to an extraProvincial point and till payment of price after export
He claimed that these sales could not be included in 519 his turnover under the Madras General Sales tax Act 1939 Act No IX of 1939 and sales tax was wrongly demanded from him
In respect of this assessment he filed OS No 14 of 1950 original No 0
section 40 of 1949 in the Court of the Subordinate Judge Kurnool for refund of Rs 11389 0 9 ps
The Madras State Government in a written statement traversed all the allegations and stated that delivery of the goods was made in Kurnool when the goods were booked and further that the goods were despatch
ed at buyer s risk and remained at buyer s risk through out it also contended that the notice under section 80 was not proper and the suit was not in accordance with that notice and was not maintainable because the orders under the Sales tax Act were made final by section 114 of the Sales tax Act and because Basappa had not exhausted his other remedies under the Salestax Act
Lastly it contended that the suit was barred by time not having been filed within six months from the date of the act complained of as required by section 18 of the Sales tax Act or within one year as required by article 16 of the Indian Limitation Act
In respect of the year 1945 46 Basappa filed OS No 44 of 1949 claiming a refund of Rs 8356on similar grounds and in respect of the year 1946 47 he filed OS No 23 of 1949 for a declaration that the levy of Rs 923 3 6 7 was illegal and without jurisdiction and for a permanent injunction to restrain the taking authority from collecting the tax
In this suit in addition to the defences also taken in the other suits it was contended that the suit was incompetent as a revision application was pending with the Board of Revenue
These suits were disposed of by the Subordinate Judge Kurnool by a common judgment dated February 22 1951
The main points which were decided were 1 whether the suits were not maintainable as a the civil court had no jurisdiction and b the assessee had not exhausted his other remedies 2 whether the suits were barred by time and  3 whether the sales took place outside the Province of Madras and the 520 levy of the tax in respect of some of the transactions was illegal
The Subordinate Judge held that
there was nothing in the Sales tax Act to exclude the jurisdiction of the civil court and that the finality spoken of by s  11 of the Sales tax Act was a finality arising under the Sales tax Act and had no reference to  the jurisdiction of the civil court
He also held that Basappa was not required to exhaust his other remedies before moving the civil court by suit
On the second point the Subordinate Judge held that OS No 14 of 1950 and 44 of 1949 were barred by time under section 18 of the Sales tax Act or article 16 of the Limitation Act whichever might be applied
The learned Subordinate Judge held that article 62 of the Limitation Act was not applicable because Basappa had not pleaded in these two suits that payment of the tax was made under a mistake
The Subordinate Judge however held that OS No 23 of 1949 was in time
In OS No 14 of 1 950 and 44 of 1949 he recorded findings that tax amounting to Rs 7203 12 9 in respect of OS 14 of 1950 and Rs 5370 7 0 in respect of OS No 44 of 1949 were wrongly levied because those amounts concerned sales which took place outside the Province of Madras
In OS 23 of 1949 he held that sales of the value of Rs 79465 took Place outside the Province and tax in respect of them at 1  which was the uniform rate applicable to all the three years was not demandable  A declaration to this effect  was granted and an injunction was issued restraining the State Government  from recovering Rs 793 10 6 from Basappa
In the result
OS No14 f 1950 and 44 of 1949 were dismissed  with costs and O section No 23 of 1949 was partially decreed with proportionate costs
Basappa appealed in all the three suits against the decision of the Subordinate Judge Kurnool
The Government of Madras objected in the appeal of Basappa from the decision in 0S No 23 of 1949 in respect of the decree for Rs 793 10 6
In the High Court  applications were made in the appeals for urging an additional ground that the whole assess 521 ment was invalid because it included an illegal levy which was not severable from the legal demand
This ground was based upon the decision of this Court in Ms Ram
Narain Sons Ltd vs Assistant Commissioner of Sales Tax and others 1 This request was not opposed and permission was granted to Basappa
The High Court differed from the Subordinate Judge on the question of limitation and held that neither section 18 of the Sales tax Act nor article 16 of the Limitation Act was applicable to
 the suits which were governed by article 62 of the Limitation Act
The High Court accordingly held that OS 14 of 1950 and OS 44 of 1949 which were dismissed as barred by time were not barred
On the  main question the High Court classified all the sales into four categories which were 1
Where the plaintiff himself was the consignor as well as the consignee 2
Where the plaintiff himself was the consignor and the buyer the consignee 3
Where the buyer was the consignor as well as the consignee and 4
Where a third party was shown as the consignor the consignee being the plaintiff
The Subordinate Judge had held that sales tax was properly demandable in respect of categories 2 and 3 but not in respect of categories 1 and 4
The second part of the decision was not assailed before the High Court
The High Court again considered categories 2 and 3 and held that sales coming under those categories were properly assessable to sales tax as the sales took place within the Province of Madras
The High Court however acting upon the decision of this court in Ram Narain s case1 held that the legal and the illegal levies were so mixed up that the entire demand for tax was rendered illegal and void
In the result the appeals filed by Basappa were allowed and the cross objection filed by the Provincial Government of Madras was dismissed
The High Court certified these cases and the present appeals have been filed
1  522 Three questions are raised by Mr AV Viswanatha Sastri
They are 1 that the civil court had no Jurisdiction to try these suits 2 that the suits OS 14 of 1950 and 44 of 1949 were barred by time under section 18 of the Sales tax Act and 3 that the High Court was wrong in holding that the assessments were not capable of being split up and in declaring the total assessments to be void
The first two points give no trouble at all
Section 18 of the Act reads No suit shall be instituted against the Govern
ment and no suit prosecution or other proceeding shall be instituted against any Officer or servant of the State Government in respect of any act done or purporting to be done under this Act unless the suit prosecution or other proceeding is instituted within six months from the date of the act complained of
 This section applies to suits for damages and compensation in respect of acts under the Act
It is worded in familiar language by which authorities including Government are protected and indemnified in respect of bona fide acts done or purporting to be done under powers conferred by the statute
The periodof limitation prescribed in the section does not apply to the kind of suits which were filed by Basappa
This Point has no substance and was not even pressed in the High Court
Similarly the first point must also be decided against the State of Andhra Pradesh because of a recent decision of this court in Firm of tlluri Subhayya Chetty Sow vs The State of Andhra Pradesh1 That case was decided under section 18A of the Madras General Sales tax Act which was inserted by section 10 of the Madras General Sales tax Amendment Act 1951 which came into force on May 15 1951
That section reads No suit or other proceeding shall except as expressly provided in this Act be instituted 1  523 in any Court to set aside or modify any assessment made under this Act
 The present appeals have to be decided without the assistance of section 18A because the suits were filed in the Court of Subordinate Judge Kurnool and were decided by him before the amendment came into force 
Prior to the insertion of section 18A there was no specific provision taking away the jurisdiction of the civil court except section 114 by which a finality attached to orders passed in appeal
Under that section appeals were provided in respect of orders of assessment and there was also a provision for revision in section 12
It was provided by sub section
4 of section II that every order passed in appeal under this section shall subject to the powers of revision conferred by section 12 be final   While enacting section 18A the Legislature added an elaborate machinery which did not exist earlier for correcting assessments
Mr Sastri contends that in deciding whether the civil court s jurisdiction is barred we must take into account the provisions of section 11 and section 12 because these provisions which provide adequate remedies  march with the construction of section 114
He submits that the finality which was conferred on the appellate order subject to a revision must necessarily be a finality against determination of the same question by the civil court
It is pointed out by this court in Chetty s case1 that the exclusion of the jurisdiction of the civil court is not to be readily inferred and that even if a provision giving the orders a finality was enacted civil courts still have jurisdiction to interfere where fundamental provisions of the Act are not complied with or where the statutory Tribunals do not act in conformity with the fundamental principles of judicial procedure
Gajendragadkar J speak ing for the court on that occasion summed up the law as follows In dealing with the question whether Civil Courts  jurisdiction to entertain a suit is barred or not  it is necessary to bear in mind the fact that there
is a general presumption that there 1  524 must be a remedy in the
ordinary civil courts to a citizen claiming that an amount has been recovered from him illegally and that such a remedy can be held to be barred only on very clear and unmistakable indications to the contrary
The exclusion of the jurisdiction of Civil Courts to entertain civil
causes will not be assumed unless the relevant statute contains an express provision to that effect or leads to a necessary and inevitable implication of that nature
The mere fact that a special statute provides for certain remedies may not by itself necessarily exclude the jurisdicti on of the civil courts to deal with a case brought before it in respect of some of the matters covered by the said statute Referring to the remarks of Lord Thankerton in Secretary of State represented by the Collector of South Arcot vs Mask  Co1 it is also well settled that 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 it was observed It is necessary to add that these observations though made in somewhat wide terms do not justify the assumption that if a decision has been made by a taxing authority under the provisions of the relevant taxing statute its validity can be challenged by a suit on the ground that it is incorrect on the merits and as such it can be claimed that the provisions of the said statute have not been complied with
Non compliance with the provisions of the statute to which reference is made by the Privy Council must we think be non compliance with such fundamental provisions of the statute
as would make the entire proceedings before the appropriate authority illegal and without jurisdiction
Similarly if an appropriate authority has acted in violation 1 67 IA 222 at 236
525 of the fundamental principles of judicial procedure that may also tend to make the proceedings illegal and void and this infirmity may affect the validity of the order passed by the authority in question
 It was thus held that the civil court s jurisdiction may not be taken away by making the decision of a tribunal final because  the civil court s jurisdiction to examine the order with reference to fundamental provisions of the statute non compliance with which would make the proceedings illegal and without jurisdiction still remains unless the statute goes further and states either expressly or by necessary implication that the civil court s jurisdiction is completely taken away
Applying these
tests it is clear that without a provision like section 18A in the Act the jurisdiction of the civil court would not be taken and at least where the action of the authorities is wholly outside the law and is not a mere error in the exercise of jurisdic tion
Mr Sastri says that we must interpret the Act in the same way as if section 18A was implicit in it and that section 18A was added to make explicit what was already implied
We cannot agree
The finality that statute conferred upon orders of assessment Subject however to appeal and revision was a finality for the purposes of the Act
It 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
present case the taxing of sales which did not take place within the State was a matter wholly
outside the jurisdiction of the taxing authorities and in respect of such illegal action
the jurisdiction of the civil court continued to subsist
In our judgment the suits were competent
The last question is whether the assessment as a whole must fail or only in respect of the part which was utside the  jurisdiction of the sales tax authorities We have already reproduced the four categories into Which all the transactions of sale were classified
The High Court and the Court below
found that 526 categories 1 and 4 represented transactions of sale which could not be taxed at all by the authorities as those transactions took place outside the State
It may be mentioned that the Sales tax Act did not then contain any provision which established a nexus between the sales and the Province
That provision came later
The High Court relying upon Ram Narain s case held that the assessments as a whole must fail
In Ram Narain s case a portion of the assessment was invalid under article 286 of the Constitution and the question was whether the total assessment must fail
This Court observed The necessity for doing so is however obviated by reason of the fact that the assessment is one composite whole relating to the pre Constitution as well as the post Constitution periods and is invalid in toto
There is authority for the proposition that when an assessment consists of a single undivided sum in respect of the totality of the property treated as assessable the wrongful inclusion in it of certain items of property which by virtue of a provision of law were expressly exempted from taxation renders the assessment invalid in toto This Court cited with approval a passage from Bennett  White Calgary Ltd and Municipal District of Sugar City No 52 where the Judicial Committee observed  When an assessment is not for an entire sum but for seperate sums dissected and earmarked each of them to a separate assessable item a court can sever the items and cut out one or more along with the sum attributed to it while affirming the  residue
But where the assessment consists of a single undivided sum in respect of the totality of property treated assessable and when one component not dismissible as de minimis is on any view not assessable and wrongly included it would seem clear that such a procedure is barred and the assessment is 1  2 at 816
527 bad wholly
That matter is covered by authority
In Montreal Light Heat  Power Consolidated vs City of Westmount the court see especially per Anglin CJ in these conditions held that an assessment Which was bad in part was infected throughout and treated it as invalid
Here their Lordships are of opinion by parity
of reasoning that the assessment was invalid in toto
 It is urged by Mr Sastri that the tax here is at the uniform rate of 1  and as all the returns and documents necessary to seprate the bad part from the good are available there is no need to cansel the whole assessment
He contends that these cases are rather governed by the other rule that where the assessment is for separate sums only that portion need be declared illegal which is void
It is necessary to explain the distinction between the two classes of cases and how they are to be distinguished
A difference in approach arises only in those cases where the assessment of many matters results in amounts of tax which though parts of the whole assessment stand completely separate
There the court can declare the separate dissected and earmarked  items illegal and excise them from the levy
In doing so the court does not arrogate to itself the functions of the taxing authorities but where the tax is a composite one and to separate the good part from the bad proceedings in the nature of assessment have to be undertaken the civil court lacks the jurisdiction
Here theamount of tax is a percentage of the turnover and the turnover is a mixed one and it is thus not merely a question of cutting off some items which are separate but of entering upon the function of assessment which only the authorities under the
Sales tax Act can undertake
Cases of assessment based upon gross valuation such as the case from Canada refered to by the Judicial  Committee afford a parallel to a case of assessment of a composite turnover such as we have here
Just as in the Canadian case it was not possible to separate the valuation of movable properties from 528 that of immovable properties embraced in a gross valuation roll so also here it is not possible to separate from  the composite turnover transactions which are validly taxed from those which are not for that must pertain to the domain of tax officers and the courts have no powers within that domain
In our opinion the High Court was right in declaring the total assessment to be affected by the portion which was illegal and void
In the result these appeals fail and are dismissed with costs one set only


Summary:
The respondent a groundnut oil merchant filed three suits alleging that the property in some goods remained with him till the exept of the goods to an extra provincial point and till the payment of price after export and sales tax was not demandable on these sales under the Madras General Sales Tax Act 1933
The appellant contended that the sales were not inter provincial sales the suits were not maintainable in a civil court the respondent had not exhausted his  alternative remedies and the suits were barred by limitation under section 18 of the Act
Before the High Court an additional ground based upon the decision in Ms Ram Narain Sons Ltd vs Assistant Commissioner of Sales Tax  was raised that the whole assessment was invalid because it included an illegal levy which was not severable from the legal demand
 Held i SectioN 18 of the Sales Tax Act applies to suits for damages and compensation in respect of acts done under the Act Me period of limitation prescribed in that section does not apply to the kind of suits which were filed by the respondent
ii The jurisdiction of civil courts is not necessarily taken away when the decision of a tribunal is made final because the civil court s jurisdiction to examine the order with reference to fundamental provisions of the statute non compliance with which would make the proceedings illegal and without jurisdiction still remains unless the statute goes further and states either expressly or by necessary implications that the civil court s jurisdiction is completely taken away
iii Applying the above principle the jurisdiction of the civil court was not taken away as the taxing of outside  sales was a matter wholly outside the jurisdiction of the taxing authorities
Firm of Illuri Subhayya Chetty  Sons vs State of Andhra Pradesh  and Secretary of State represented by the Collector of South Arcot vs Mask  Co 67 IA 222
518 iv The entire assessment was void because it was not possible in the present case to separate from the composite turnover transaction which were validly taxed from those which were not in as much as this pertains to the domain of tax officers and the courts have no powers within that domain
Ms Ram Narain Sons Ltd vs Assistant Commissioner of Sales Tax  and Bennett  White Calgary Ltd vs Municipal District of Sugar City