Case: Dhulabhai And Others Vs. The State Of Madhya Pradesh And Another

1965 SC 1942 ) can be said to run counter to the series of cases earlier noticed. The result of this inquiry into the diverse views expressed in this Court may be stated as follows:(1) Where the statute gives a finality to the orders of the special tribunals the civil courts jurisdiction must be held to be excluded if there is adequate remedy to do what the civil courts would normally do in a suit. Such provision, however, does not exclude those cases where the provisions of the particular Act have not been complied with or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure.(2) Where there is an express bar of the jurisdiction of the court, an examination of the scheme of the particular Act to find the adequacy or the sufficiency of the remedies provided may be relevant but is not decisive to sustain the jurisdiction of the civil court.Where there is no express exclusion the examination of the remedies and the scheme of the particular Act to find out the intendment becomes necessary and the result of the inquiry may be decisive. In the latter case it is necessary to see if the statute creates a special right or a liability and provides for the determination of the right or liability and further lays down that all questions about the said right and liability shall be determined by the tribunals so constituted, and whether remedies normally associated with actions in civil courts are prescribed by the said statute or not.(3) Challenge to the provisions of the particular Act as ultra vires cannot be brought before Tribunals constituted under that Act. Even the High Court cannot go into that question on a revision or reference from the decision of the Tribunals.(4) When a provision is already declared unconstitutional or the constitutionality of any provision is to be challenged, a suit is open. A writ of certiorari may include a direction for refund if the claim is clearly within the time prescribed by the Limitation Act but it is not a compulsory remedy to replace a suit.(5) Where the particular Act contains no machinery for refund of tax collected in excess of constitutional limits or illegally collected a suit lies.(6) Questions of the correctness of the assessment apart from its constitutionality are for the decision of the authorities and a civil suit does not lie if the orders of the authorities are declared to be final or there is an express prohibition in the particular Act. In either case the scheme of the particular Act must be examined because it is a relevant enquiry.(7) An exclusion of the jurisdiction of the civil court is not readily to be inferred unless the conditions above set down apply.30. In the light of these conclusions we have to see now the present case stands. Section 3 was the charging section. It spoke of the incidence of the tax. It consisted of several sub-sections. These sub-sections laid the tax on dealers according to their taxable turnover and in the case of a dealer who imported goods into Madhya Bharat the taxable turnover was Rs. 5000. Section 14 made certain exclusions and exemptions, and Section 5 prescribed the rate of tax. That Section read:"5 (1) The tax payable by a dealer under this Act shall be at a single point and shall not be less than Rs. 1-9-0 per cent or more than 6 1/4, per cent of the taxable turnover, as notified from time to time by the Government by publication in the official gazette:Provided that Government may in respect of special class of goods charge tax up to 12 1/2 per cent of the taxable turnover.(2) The Government while notifying the tax payable by a dealer may also notify the goods and the point of their sale at which the tax is payable."31. In notifying the rate provision was made for rates in respect of importers, the point of time being the import. As the import itself postulated movement of goods, the matter fell within Article 301 and as trade and commerce is declared to be free throughout the territory of India, it became unfree by reason of the tax. The tax would therefore have ex facie offended Article 301. This could however be avoided if the tax was saved by Art. 304 (a), That required that similar goods manufactured or produced in Madhya Bharat had to bear an equal tax. Such equal tax was not imposed hence the notifications were struck down as making discrimination and rendering trade and commerce unfree. This was the effect of Bhailals case, 1960 MPLJ 601. 32. No doubt the Madhya Bharat Sales Tax Act contained provisions for appeal, revision, rectification and reference to the High Court, the notifications being declared void the party could take advantage of the fact that tax was levied without a complete charging section. This affected the jurisdiction of the tax authorities because they could not even proceed to assess the party. The question was one falling in category No.3 and 4 rather than in category No.2 above. It was directly covered by the decision of this Court in Venkatuamans case, 1966-2 SCR 229 = (AIR 1966 1089) read with Circos Coffee Co., 1967-19 STC 66 (Sc) and Senthilanthan Chettiriars case, C. A. No. 1045 of 1066, D/-20-7-1967 (SC) already referred to. We would have consider this matter again if Venkataramans case, 1966-2 SCR 229 = (AIR 1966 SC 1089 ) had been doubted before but it seems to have been followed in the last mentioned case and Pabbojan Tea Companys case, AIR 1968 SC 271 . If Kamla Mills Ltd. Case, 1966-1 SCR 64 = (AIR 1966 SC 249 ) had not expressly left the question open we would have applied the earlier case of the Special Bench but as it is we are bound not by the Special bench decision but by Venkataramans case 1966-2 SCR 229 = (AIR 1966 SC 1089 ).

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

Explanation:
1[ds]In notifying the rate provision was made for rates in respect of importers, the point of time being the import. As the import itself postulated movement of goods, the matter fell within Article 301 and as trade and commerce is declared to be free throughout the territory of India, it became unfree by reason of the tax. The tax would therefore have ex facie offended Article 301. This could however be avoided if the tax was saved by Art. 304 (a), That required that similar goods manufactured or produced in Madhya Bharat had to bear an equal tax. Such equal tax was not imposed hence the notifications were struck down as making discrimination and rendering trade and commerce unfree. This was the effect of Bhailals case, 1960 MPLJ 601.  No doubt the Madhya Bharat Sales Tax Act contained provisions for appeal, revision, rectification and reference to the High Court, the notifications being declared void the party could take advantage of the fact that tax was levied without a complete charging section. This affected the jurisdiction of the tax authorities because they could not even proceed to assess the party. The question was one falling in category No.3 and 4 rather than in category No.2 above. It was directly covered by the decision of this Court in Venkatuamans case, 1966-2 SCR 229   = (AIR 1966 1089) read with Circos Coffee Co., 1967-19 STC 66   (Sc) and Senthilanthan Chettiriars case, C. A. No. 1045 of 1066, D/-20-7-1967 (SC) already referred to. We would have consider this matter again if Venkataramans case, 1966-2 SCR 229  = (AIR 1966 SC 1089  ) had been doubted before but it seems to have been followed in the last mentioned case and Pabbojan Tea Companys case, AIR 1968 SC 271  . If Kamla Mills Ltd. Case, 1966-1 SCR 64   = (AIR 1966 SC 249  ) had not expressly left the question open we would have applied the earlier case of the Special Bench but as it is we are bound not by the Special bench decision but by Venkataramans case 1966-2 SCR 229  = (AIR 1966 SC 1089  ). We must therefore allow these appeals with cost. The judgment of the High Court is set aside and suits are decreed. The order for costs shall be as in the suit. The costs in the High Court shall be borne as incurred.