Case: Virudhunagar Steel Rolling Mills Limited Vs. Government of Madras

1. The petitioner is a Public Limited Company manufacturing bars, rods and agricultural implements out of scrap iron and steel and consumes energy of High Tension Supply for the purpose. Its case is that it is governed by the Industries (Development and Regulation) Act, No. 65 of 1951, (hereinafter referred to as the Central Act), even though it did not require a licence under Section 11 thereof in view of the notification issued by the Central Government under Section 29-B by which industrial undertakings having fixed assets not exceeding rupees ten lakhs were not required to obtain a licence thereunder irrespective of the number of persons employed in such undertakings. The petitioner commenced functioning from February, 1963. The Madras Legislature passed the Madras Electricity (Taxation on Consumption) Act No. IV of 1962, (hereinafter referred to as the Madras Act) by which tax was imposed on the consumption of energy both of high tension and low tension electricity for various purposes at varying rates. Section 12 of the Madras Act however provided that where energy under High Tension Supply is consumed in the process of manufacturing or producing the principal product in any industrial undertaking licensed under the Central Act, no electricity tax shall be payable on the energy so consumed for a period of three years from the date of the commencement of the manufacture or production of the principal product in such undertaking2. The petitioner requested the Government of Madras for exemption from tax on the ground that even though it was not licensed under Section 11 of the Central Act, it was governed by that Act. The Madras Government rejected its prayer on the ground that no exemption could be granted to undertakings which were not licensed under the Central Act as provided in Section 12 of the Madras Act. Thereupon the petitioner filed a writ petition in the High Court of Madras attacking Sec. 12 of the Madras Act under Article 14 of the Constitution and claiming that it should also have been granted exemption. The petition was dismissed by a learned Single Judge of the High Court without issue of notice by a short order to the effect that the petitioner was not entitled to the benefit of Section 12 of the Madras Act and the validity of the section could not be attacked as the exemption provided was based on sound principles3. The petitioner then went in Letters Patent Appeal and the appeal was heard by a Division Bench of the High Court. The Division Bench held that the exemption was a concession and could not be claimed as a matter of right and that as Section 12 did not provide for exemption in favour of undertakings like the petitioners it could not claim exemption. The Division Bench also rejected the argument that Article 14 was applicable in this case. In consequence, the appeal was dismissed4. The present petition was filed by the petitioner soon after the appeal had been dismissed by the High Court and its contention before us is that it should have been given the exemption under Section 12 of the Madras Act in view of Article 14 of the Constitution. The petitioner however did not file any appeal from the order of the Division Bench of the High Court.

Court's reasoning:
is true that this Court said in that case that if a writ petition under Article 226 is dismissed on merits after contest it would bar a petition under Article 32 on the same facts. But the later observations at the same page show that that was not the only case in which there would be a bar of res judicata. Even where notice might not have been issued by the High Court and the writ petition dismissed in limine, the question whether such dismissal would bar a petition under Article 32 would depend upon the nature of the order dismissing it in limine. This is perfectly clear from the later observations made at p. 592 in the same case. Where therefore a writ petition is dismissed without notice to the other side but the order of dismissal is a speaking order and the petition is disposed of on merits, that would still amount to res judicata and would bar a petition under Article 32. The petitioners only proper remedy in such a case would be to come in appeal from such a speaking order passed on the merits, even though the High Court may not have issued notice to the other side. What has been decided in Daryaos case, (1962) I SCR 574 = (AIR 1961 SC 1457  ) is that the High Court should have decided the petition on the merits by a speaking order. If that is done, it is immaterial whether notice was issued to the other side or not before such a decision was given. The bar arises not because there was a notice issued but because the High Court has dealt with the merits of the petition before it and has passed a speaking order even though no notice might have been issuedWe may add that if we were to go into the merits of the case ourselves we would see no reason to differ from the view taken by the Division Bench as to the application of Article 14.