Case: Tax and Sales Tax, South Zone, Quilon Vs. Deputy Commissioner of Agricultural Income-Aluminium Industries Limited Kanan Devan Hill Produce Company Limited  Intervener

in the case of a sale of goods during their movement from one State to another, being a sale subsequent to the first sale in respect of the same goods, the tax shall, where such sale does not fall within sub-section (2) of section 6, be levied and collected in the State from which the registered dealer effecting the subsequent sale obtained or, as the case may be, could have obtained, the form prescribed for the purposes of clause (a) of sub-section (4) of section 8 in connection with the purchase of such goods.(2) Subject to the other provisions of this Act and the rules made thereunder, the authorities for the time being empowered to assess, re-assess, collect and enforce payment of any tax under the general sales tax law of the appropriate State shall, on behalf of the Government of India, assess, re-assess, collect and enforce payment of tax, including any penalty, payable by a dealer under this Act as if the tax or penalty payable by such a dealer under this Act is a tax or penalty under the general sales tax law of the State; and for this purpose they may exercise all or any of the powers they have under the general sales tax law of the State; and the provisions of such law, including provisions relating to returns, provisional assessment, advance payment of tax, registration of the transferee of any business, imposition of the tax liability of a person carrying on business on the transferee of, or successor to, such business, transfer of liability of any firm or Hindi undivided family to pay tax in the event of the dissolution of such firm or partition of such family, recovery of tax from third parties, appeals, reviews, revisions, references, refunds, rebates, penalties, compounding of offences and treatment of documents furnished by a dealer as confidential, shall apply accordingly :rovided that if in any State or part thereof there is no general sales tax law in force, the Central Government may, be rules made in this behalf, make necessary provision for all or any of the matters specified in this sub-section.(3) The proceeds in any financial year of any tax, including any penalty, levied and collected under this Act in any State (other than a Union territory) on behalf of the Government of India shall be assigned to that State and shall be retained by it; and the proceeds attributable to Union territories shall form part of the Consolidated Fund of India."Clause 9 provides :"Validation of assessments, etc. - (1) Notwithstanding anything contained in any judgment, decree or order of any court or other authority to the contrary, any assessment, re-assessment, levy or collection of any tax made or purporting to have been made, any action or thing taken or done in relation to such assessment, re-assessment, levy or collection under the provisions of the principal Act before the commencement of this Ordinance, shall be deemed to be as valid and effective as if such assessment, re-assessment, levy or collection or action or thing had been made, taken or done under the principal Act as amended by this Ordinance and accordingly -(a) all acts, proceedings or things done or taken by the Government by any officer of the Government or by any other authority in connection with the assessment, re-assessment, levy or collection of such tax shall, for all purposes, be deemed to be, and to have always been, done or taken in accordance with law;(b) no suit or other proceedings shall be maintained or continued in any court or before any authority for the refund of any such tax, and(c) no court shall enforce any decree or order directing the refund of any such tax.(2) For the removal of doubts, it is hereby declared that nothing in sub-section (1) shall be construed as preventing any person -(a) from questioning in accordance with the provisions of the principal Act, as amended by this Ordinance, any assessment, re-assessment, levy or collection of tax referred to in sub-section (1), or(b) from claiming refund of any tax paid by him in excess of the amount due from him by way of tax under the principal Act as amended by this Ordinance."These two clauses have been made expressly retrospective and the result, therefore, is that the law as stated in the majority decision of this court in Lakshminarasimhiahs case ([1965] 16 S.T.C. 231) has been superseded.4. On behalf of the interveners, Mr. Narasaraju raised a constitutional objection that the Ordinance was in the first place violative of article 19 as it was made retrospective and therefore constituted an unreasonable restriction and secondly that it is violative of article 14 of the Constitution. It is not open to the parties in this case to challenge the constitutional validity of the Ordinance in view of the decision of this court in K. S. Venkataraman & Co. v. State of Madras ([1966] 2 S.C.R. 229; 17 S.T.C. 418). It was held by the majority of the Judges in that case that the Income-tax Officer, the Appellate Assistant Commissioner and the Appellate Tribunal are all creatures of the Income-tax Act and whether the provisions of the Act are good or bad is not their concern. As the Appellate Tribunal is a creature of the statute it can only decide the dispute between the assessee and the Commissioner in terms of the provisions of the Act and the question of ultra vires is foreign to the scope of its jurisdiction. As no such question can be raised or can arise on the Tribunals order, the High Court cannot possibly give any decision on the question of ultra vires. Similarly an appeal to this court under section 66A(2) of the Act does not enlarge the scope of the jurisdiction for this court can only do what the High Court can. Mr. Narasaraju conceded that in view of this decision it is not open to him to challenge the constitutional validity of the Ordinance in the present appeals.

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

Explanation:
1[ds]In dismissing the tax revision cases the High Court followed the decision of this court in State of Mysore v. Yaddalam Lakshminarasimhiah Setty & Sons ([1965] 16 S.T.C.legal position has, however, been changed as a result of the issue of the Central Sales Tax (Amendment) Ordinance, 1969 (No. 4 of 1969) which was promulgated on June, 9,two clauses have been made expressly retrospective and the result, therefore, is that the law as stated in the majority decision of this court in Lakshminarasimhiahs case ([1965] 16 S.T.C. 231) has beenbehalf of the interveners, Mr. Narasaraju raised a constitutional objection that the Ordinance was in the first place violative of article 19 as it was made retrospective and therefore constituted an unreasonable restriction and secondly that it is violative of article 14 of the Constitution.It is not open to the parties in this case to challenge the constitutional validity of the Ordinance in view of the decision of this court in K. S. Venkataraman & Co. v. State of Madras ([1966] 2 S.C.R. 229; 17 S.T.C. 418). It was held by the majority of the Judges in that case that the Income-tax Officer, the Appellate Assistant Commissioner and the Appellate Tribunal are all creatures of the Income-tax Act and whether the provisions of the Act are good or bad is not their concern. As the Appellate Tribunal is a creature of the statute it can only decide the dispute between the assessee and the Commissioner in terms of the provisions of the Act and the question of ultra vires is foreign to the scope of its jurisdiction. As no such question can be raised or can arise on the Tribunals order, the High Court cannot possibly give any decision on the question of ultra vires. Similarly an appeal to this court under section 66A(2) of the Act does not enlarge the scope of the jurisdiction for this court can only do what the High Court can. Mr. Narasaraju conceded that in view of this decision it is not open to him to challenge the constitutional validity of the Ordinance in the presentis not open to the parties in this case to challenge the constitutional validity of the Ordinance in view of the decision of this court in K. S. Venkataraman & Co. v. State of Madras ([1966] 2 S.C.R. 229; 17 S.T.C. 418). It was held by the majority of the Judges in that case that theOfficer, the Appellate Assistant Commissioner and the Appellate Tribunal are all creatures of theAct and whether the provisions of the Act are good or bad is not their concern. As the Appellate Tribunal is a creature of the statute it can only decide the dispute between the assessee and the Commissioner in terms of the provisions of the Act and the question of ultra vires is foreign to the scope of its jurisdiction. As no such question can be raised or can arise on the Tribunals order, the High Court cannot possibly give any decision on the question of ultra vires. Similarly an appeal to this court under section 66A(2) of the Act does not enlarge the scope of the jurisdiction for this court can only do what the High Court can. Mr. Narasaraju conceded that in view of this decision it is not open to him to challenge the constitutional validity of the Ordinance in the presentappeals.For the reasons already expressed we hold that these appeals should be allowed and the judgment dated July 23, 1968, of the Kerala High Court in Tax Revision Cases Nos. 10 and 11 of 1967 should be set aside. We also set aside the orders passed by the Appellate Tribunal and the Deputy Commissioner of Sales Tax and the Sales Tax Officer and direct that the matter should go back to the Sales Tax Officer forin accordance with law.