1. Appeal against assessment of central sales tax under the Central Sales Tax Act where the assessee approached the Supreme Court without exhausting statutory remedies. (Para 1 , 2 )
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1961 Supreme(SC) 353
SUPREME COURT OF INDIA
31st Ocotber, 1961
B.P. SINHA, C.J.I., J.L. KAPUR, M. HIDAYATULLAH, J.C. SHAH AND J.R. MUDHOLKAR, JJ.
Ram Saran Das and Bros., Appellants
Versus
Commercial Tax Officer, Calcutta and others, Respondents.
Civil Appeal No. 592 of 1960. 1327
Advocates appeared
Mr. N. C. Chatterjee Senior Advocate, (Mr. S. C. Mazumdar, Advocate, with him), for Appellants; Mr. B. Sen, Senior Advocate, (Mr. P. K. Bose. Advocate, with him), for Respondents (No. 1 & 2); Mr. K.N. Rajagopal Sastri, Senior Advocate (Mr. T. M. Sen, Advocate; with him), for Respondent No. 3.
Advocates:
B.SEN, K.N.RAJAGOPAL SASTRI, N.C.CHATTERJI, P.K.BOSH, S.C.MAJUMDER, T.M.SEN
B.SEN, K.N.RAJAGOPAL SASTRI, N.C.CHATTERJI, P.K.BOSH, S.C.MAJUMDER, T.M.SEN
The Supreme Court, while possessing wide discretionary jurisdiction under Article 136 of the Constitution, will ordinarily not entertain appeals where the litigant has failed to exhaust statutory remedies or bypass the High Court, unless exceptional circumstances or a failure of justice are demonstrated.
Headnote:(A) Constitution of India - Article 136 - Central Sales Tax Act - Special leave to appeal - Scope and limitations - While the jurisdiction under Article 136 is wide and does not mandate the exhaustion of all remedies, the Court ordinarily refuses to entertain appeals when the litigant has not availed himself of the ordinary remedies available at law (Para 3).
(B) Appeal - Maintainability - Direct appeal against an assessment order without invoking the jurisdiction of the High Court or exhausting statutory remedies is generally not permissible unless special circumstances, such as a complete failure of justice or unfair procedure, are present (Paras 3, 4, 5).
Facts of the case:
A partnership firm was assessed for central sales tax by the assessing authority for a specific period. The firm, having filed a return showing nil turnover, was assessed for a significant amount. The firm approached the highest court directly by seeking special leave to appeal against the assessment order without exhausting the remedies available under the Act or approaching the High Court.
Findings of Court:
The appeal is incompetent as the facts have not been finally determined by the final fact-finding authority and the appellant has not challenged the vires of the Act. No special circumstances were found to justify the direct approach to the highest court.
Issues: Whether the court should entertain an appeal under Article 136 of the Constitution when the appellant has not exhausted the statutory remedies provided under the Act.
Ratio Decidendi: The court held that despite the wide amplitude of jurisdiction under Article 136, it imposes limitations on its own powers and will not ordinarily allow the High Courts to be bypassed. Direct appeals against assessment orders are not maintainable unless there is a failure of justice or other exceptional circumstances.
Result: Appeal dismissed.
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Table of Contents
2. Whether the Supreme Court can exercise jurisdiction under Article 136 of the Constitution directly against an assessment order without the appellant exhausting available statutory remedies. (Para 3 )
3. The Court generally refuses to entertain special leave appeals when litigants bypass ordinary legal remedies, unless special circumstances like a complete failure of justice exist. (Para 3 , 4 , 5 )
4. Appeals under Article 136 are ordinarily not entertained if the appellant has not exhausted available statutory remedies and no special circumstances justify direct intervention. (Para 3 , 4 , 5 )
5. Appeal dismissed as incompetent without opinion on merits, leaving the appellant to pursue available legal remedies. (Para 6 )
6. Can the Supreme Court entertain a special leave appeal under Article 136 if statutory remedies are not exhausted?
While the jurisdiction under Article 136 is wide and does not strictly require the exhaustion of all remedies, the Court ordinarily refuses to entertain such appeals unless the litigant has availed themselves of ordinary remedies available at law. (Para 3 )
7. Under what special circumstances might the Court interfere with an assessment order before statutory remedies are exhausted?
The Court may interfere if there is a complete failure of justice, such as when an Assessing Authority fails to exercise its own judgment, follows superior directions blindly, and denies the assessee an opportunity to be heard. (Para 3 )
8. Does the Supreme Court allow the bypassing of High Courts in tax assessment appeals?
Ordinarily, the Court does not allow High Courts to be bypassed and expects appellants to exhaust all remedies, including those available in the High Court, before invoking jurisdiction under Article 136 of the Constitution. (Para 4 , 5 )
Judgment
SINHA, C.J.I. : This is a direct appeal by special leave granted by this Court on September 7, 1959, against the order, dated June 17, 1959, passed by the first respondent - the Commercial Tax Officer - assessing the appellant to central sales tax amounting to Rs. 42,647 odd, for the period July 30, 1957 to March 31, 1958, under the Central Sales Tax Act (LXXIV of 1956) - which hereinafter will be referred to as the Act. The second respondent is the State of West Bengal, an the third respondent is the Union of India.
2. In view of the order we propose to make in this case, it is not necessary to state in any detail the facts and circumstances leading up to this appeal. The appellant is a partnership firm, under the Indian Partnership Act, with its principal place of business at 18 Netaji Subhas Road, Calcutta, within the jurisdiction of the first respondent. The appellant alleges that he carries on business of two kinds, namely, (1) of a dealer in coal and coke, and (2) of a middleman bringing about sales coal and coke between Colliery owners and consumers. In respect of its business as a dealer, the appellant is a registered dealer under the Bengal Finance (Sales Tax) Act (Bengal Act VI of 1941). Its second business as a middleman relates mainly to sales of coal and coke in the course of inter-State trade or commerce, and the tax in question relates to this second branch of its business. The Act came into operation in the State of West Bengal on July 1, 1957, when the appellant applied for and obtained a certificate of registration under the Act on July 30, 1957. In May 1958, the appellant made its return under the Act in respect of the period aforesaid, showing the turnover as nil. But in spite of its showing cause against the proposed assessment, the first respondent determined Rs. 9,17,196 as the appellant s turnover in respect of the period aforesaid and assessed central sales tax thereon at Rs. 42,647.82 nP. under S. 8(2) of the Act, and issued Demand Notice. The appellant moved this Court and obtained the special leave to appeal from the order of the first respondent making assessment, and later a demand on the basis of the assessment.
3. From the statement of fact given above, it is clear that the appellant did not exhaust all his remedies under the Act itself, and came directly to this Court as if the Order of Assessment passed by the first respondent was final. The question, therefore, arises whether this Court should entertain the appeal, when even the facts have not been finally determined by the final fact-finding authority under the Act, nor has the jurisdiction of the High Court been invoked to exercise its powers under the Act. But Mr. Chatterjee, on behalf of the appellant, has contended in the first instance that the powers of this Court are wide enough to enable him to approach this Court direct, when, according to him, there had been an assessment of tax without the authority of law. There is no doubt that the powers of this Court under Art. 136 of the Constitution are as wide as they could be, because, unlike the preceding articles of the Constitution, there is no limitation that the judgment, decree or order should be final in the sense that the appellant in this Court has exhausted all the remedies provided by law before invoking the jurisdiction of this Court to grant "special leave to appeal from any judgment, decree, determination, sentence or order in any case or matter passed or made by any Court or Tribunal in the territory of India." In spite of the wide amplitude of the jurisdiction of this Court to entertain appeals by special leave, this Court has imposed certain limitations on its own powers for very good reasons, and has refused ordinarily to entertain such appeals when the litigant has not availed himself of the ordinary remedies available to him at law. But Mr. Chatterjee, on behalf of the appellant, invited our attention to the decision of this Court in Mahadayal Premchandra v. Com
