Case: Tata Engineering And Locomotive Companyltd Vs. Assistant Commissioner Of Commercial Taxes&amp; Anr

law sale took place only at the stockyard where the vehicle was appropriated to a particular contract and that the sale did not occasion inter-state movement of the vehicle. (f) Respondent No. 1 has relied on Section 84 of the Contract Act even though the same was repealed in 1930 and thereby erred in applying a wrong provision of law. (g) * * * * *" The petition came up for hearing before Narasimham C. J. and Ahmad J. on April 20, 1966 and was dismissed at the threshold. The order of the High Court was:"The petitioner has not exhausted the internal remedies provided in the Sales Tax Act by way of appeal, revision or reference and statement of a case to this Court. We are not satisfied that this is a fit case for this Court to exercise its extraordinary jurisdiction at this stage. The petition dismissed summarily. Sd/- R. L. NARASIMHAM Sd. /- ANWAR AHMED". A request for certificate to appeal to this Court was then made The- High Court pointed out that an appeal against the order of assessment was possible on payment of 20 per cent of the assessed tax. As this came to Rs. 40,00,000 and odd only and Rs. 33,97,000 had already been paid, the High Court held that the Company ought to appeal first since the payment of the balance (Rs. 6,00,000) was well within the capacity of the appellant Company and was not so onerous as to merit interference by way of extraordinary powers of the High Court. The application for certificate was accordingly dismissed. The appellant Company, however, obtained special leave from this Court and this appeal was filed. 6. The learned Additional Solicitor General, who appeared for the Assistant Commissioner, raised a preliminary objection that the appellant it Company could not be heard as it had not exhausted the remedies available under the taxing statutes which gave right of appeal and revision and finally for invoking the advisory jurisdiction of the High Court. He also relied upon Than Singh v. Supdt. of Taxes, AIR 1964 SC 1419 in support of the order of the High Court. 7. The preliminary objection really does no more than try to cheek in advance the points which the appellant Company is seeking to raise in this appeal. Whether one looks at the matter from the point of view of the appeal proper or from the point of view of the preliminary objection raised before us, the question is the same, namely, whether the High Court ought in this case to have exercised jurisdiction and if it took jurisdiction whether any settled principle governing Art. 226 would have been departed from. 8. The power and jurisdiction of the High Court under Art. 226 of the Constitution has been the subject of exposition from this Court. That it is extraordinary and to be used sparingly goes without saying.In spite of the very wide terms in which this jurisdiction is conferred, the High Courts have rightly recognised certain limitations on this power. The jurisdiction is not appellate and it is obvious that it cannot be a substitute for the ordinary remedies at law. Nor is its exercise desirable if facts have to be found on evidence The High Court, therefore, leaves the party aggrieved to take recourse to the remedies available under the ordinary law if they are equally efficacious and declines to assume jurisdiction to enable such remedies to be by-passed. To these there are certain exceptions. One such exception is where action is being taken under an invalid law or arbitrarily without the sanction of law. In such a case, the High Court may interfere to avoid hardship to a party which will be unavoidable if the quick and more efficacious remedy envisaged by Article 226 were not allowed to be invoked. In our judgment the present is an example of the exceptional situation above contemplated just as Himmat-Lal v. State of M. P., 1954 SCR 1122 : (AIR 1954 SC 403 ) was another instance which came before this Court. 9. The power and jurisdiction of the Assistant Commissioner, Jamshedpur were exercisable in respect of sales to consumers in Bihar State and to transactions of sales in the course of inter-state trade and commerce. They could not be utilised to tax sales outside the. State of Bihar. The appellant Company claimed exemption in respect of sales effected from their stockyards in the various States, no doubt fed from Bihar but run by the Company locally. The Company asserted that the goods in the stockyards were still those of the appellant Company and neither the property in them had passed to any one nor had they been appropriated to a contract of sale. The question was whether in law such sales could be regarded as in the course of interstate trade or commerce or outside sales, subject of course to the claim of the Company being found on record to be good. There is nothing to show that any further evidence beyond documents produced to illustrate sample sales was necessary. Nor did the learned Additional Solicitor General suggest that this was going to be an issue of fact rather than of law. It would certainly have avoided circuitry of action and proved altogether more satisfactory if the High Court had considered whether the sample transaction as illustrated by the documents, disclosed a transaction of sale outside the State of Bihar and not in the course of inter-state trade or commerce. On that depended the payment of tax of the order of Rs. 1,73,00,000 and odd for two quarters alone. We are clearly of opinion that the High Court ought to have taken jurisdiction in this case at least to issue a rule nisi to see what the Assistant Commissioner had to say. The High Court could always decline to decide the case if disputed questions of fact requiring finding thereon, arose but so far as we can see, no such question was likely to arise.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]In spite of the very wide terms in which this jurisdiction is conferred, the High Courts have rightly recognised certain limitations on this power. The jurisdiction is not appellate and it is obvious that it cannot be a substitute for the ordinary remedies at law. Nor is its exercise desirable if facts have to be found on evidence The High Court, therefore, leaves the party aggrieved to take recourse to the remedies available under the ordinary law if they are equally efficacious and declines to assume jurisdiction to enable such remedies to be by-passed. To these there are certain exceptions. One such exception is where action is being taken under an invalid law or arbitrarily without the sanction of law. In such a case, the High Court may interfere to avoid hardship to a party which will be unavoidable if the quick and more efficacious remedy envisaged by Article 226 were not allowed to be invoked9. The power and jurisdiction of the Assistant Commissioner, Jamshedpur were exercisable in respect of sales to consumers in Bihar State and to transactions of sales in the course of inter-state trade and commerce. They could not be utilised to tax sales outside the. State of Bihar. The appellant Company claimed exemption in respect of sales effected from their stockyards in the various States, no doubt fed from Bihar but run by the Company locally. The Company asserted that the goods in the stockyards were still those of the appellant Company and neither the property in them had passed to any one nor had they been appropriated to a contract of sale. The question was whether in law such sales could be regarded as in the course of interstate trade or commerce or outside sales, subject of course to the claim of the Company being found on record to be good. There is nothing to show that any further evidence beyond documents produced to illustrate sample sales was necessary. Nor did the learned Additional Solicitor General suggest that this was going to be an issue of fact rather than of law. It would certainly have avoided circuitry of action and proved altogether more satisfactory if the High Court had considered whether the sample transaction as illustrated by the documents, disclosed a transaction of sale outside the State of Bihar and not in the course of inter-state trade or commerce. On that depended the payment of tax of the order of Rs. 1,73,00,000 and odd for two quarters alone. We are clearly of opinion that the High Court ought to have taken jurisdiction in this case at least to issue a rule nisi to see what the Assistant Commissioner had to say. The High Court could always decline to decide the case if disputed questions of fact requiring finding thereon, arose but so far as we can see, no such question was likely to arise8. The power and jurisdiction of the High Court under Art. 226 of the Constitution has been the subject of exposition from this Court. That it is extraordinary and to be used sparingly goes without saying.