JUDGMENT

SATYANARAYANA RAJU, J.-These appeals, by special leave, are from the judgment of a Division Bench of the Madras High Court.

Rayalaseema Constructions now defunct was a firm of engineers with its head office at Madras. For the year 1951-52, the firm was assessed under the Madras General Sales Tax Act, 1939 (hereinafter referred to as the Act) on a gross turnover of Rs. 2,23,174-10-0 as on "works contracts". The order of assessment was made on March 25, 1953, and it was then determined that a sum of Rs. 2,440-15-7 was payable by the firm. Deducting the payments made by the firm, a balance of Rs. 775-15-7 remained due in respect of this assessment For the year 1952-53, the gross turnover of the firm was computed to be Rs. 2,54,666-13-9 and the assessment was made in a sum of Rs. 2,785-6-9. Deducting the various payments made by the firm, a sum of Rs. 1,725-6-9 remained due in respect of this assessment. The appellant demanded payment of these sums amounting to Rs. 2,501-6-4. By the time the appellant made the demand, the Madras High Court had held in Gannon Dunkerley & Co. v. Stale of Madras1 that works contracts did not involve any element of sale of materials and that therefore the levy of sales tax in respect of those materials was unlawful. By its letter dated August 3, 1954, the respondent wrote to the appellant that the demand for payment of the amount could not be enforced as the assessment itself was illegal and not authorised by law. For nearly two years the appellant took no steps to enforce the demand but, on November 26, 1956, the Deputy Commercial Tax Officer wrote to the respondent that he had been directed to take stes to collect this arrears under the Revenue Recovery Act. On February 2,1957, the respondent thereupon filed Writ Petitions Nos. 91 and 142 of 1957 in the Madras High Court for the issue of a writ of mandamus or other suitable direction to the appellant requiring him to forbear from collecting the said amounts.

(1) (1955) 1 M.L.J. 87 ; 5 S.T.C. 216.The case for the petitioner-respondent was that by reason of the decision in Gannon Dunkerley s case1, the levy made upon it was unlawful, that the State had no authority to demand payment of the amounts and that therefore there should be a direction prohibiting the State from collecting the amounts. By its judgment dated February 2, 1959, the Division Bench of the High Court held that in relation to a tax where an assessing officer acted outside the boundaries of his jurisdiction, his acts would, to that extent, be null and void, that no one would have any power to call upon a citizen to make payment of a tax so imposed, and if any authority sought to collect a tax so imposed, the citizen could call in aid Article 265 and seek the assistance of the Court. As a result of the conclusions reached by them, the learned Judges issued a writ of mandamus directing the appellant to forbear from collecting the amounts.

In support of the appeals, it is contended by Mr. Ranganadham Chetty that the question whether the transactions with respect to which the respondent was assessed to sales tax were "works contracts" or not was not the subject-matter of investigation by the High Court and therefore the matter should be remitted to that Court for a proper finding on that question. From a perusal of the judgment of the High Court, it would appear that at no time was there any controversy that the transactions were not works contracts. The judgment proceeded on the basis that the decision in Cannon Dunkerley s case1 directly applied to the assessments under challenge. In the statement of case filed by the appellant in this Court, there is no allegation that the assessments did not relate to "indivisible works contracts". The entire statement of the case proceeded on the assumption that they were such contracts. In the circumstances, we must hold that there is no need to remit the case to the High Court for an investigation into the nature of the transactions.

Referring