A condition imposed by a State law requiring the payment of additional excise duty as a condition for exemption from sales tax on declared goods is ultra vires and unconstitutional, being inconsistent with Article 286 (3) of the Constitution and the Central Sales Tax Act, 1956.

( 1 ) THIS petition under Article 226 of the Constitution is directed against the assessment order at Ann, C to the Petition (page 17) by which the Commercial Tax Officer--Respondent No. I--has directed the Petitioner to pay a sales tax amounting to Rs. 19,171,65 np. , with a penalty of Rs. 500/-, in respect of the period from 29-3-58 to 16-4-59.

( 2 ) THE petitioner firm's contention, in the main, is that the sales in question were exempted under items (26) and (28) of Rule 3 of the Bengal Sales Tax Rules, 1941 framed under the Bengal Finance (Sales Tax) Act, 1941 (hereinafter referred to as 'the Act' ). The other grounds urged in support of the petition will be stated in course of the judgment.

( 3 ) I. The first head on which exemption is claimed relates to Rule 3 (26), which is as follows:"in calculating his taxable turnover a registered dealer may deduct from his gross turnover his turnover an the following, namely-- (26) Sales of handloom-woven cotton cloth. "

( 4 ) IT has been rightly contended by the learned Government pleader that on the present point, the petitioner is barred from obtaining any relief in this proceeding under Article 226, because his claim for exemption was rejected by the Commercial Tax Officer on a finding of fact against which the petitioner should have moved the higher administrative authorities set up by the taxing statute. That finding is that the purchase vouchers' produced by the petitioner did not show "that the goods were actually manufactured on handloom". From the impugned order, based upon this finding, the petitioner could have moved the Asstt. Commissioner and then the Commissioner, in appeal. Revision also lay to the latter, and then the Board of Revenue. Not having taken recourse to these remedies, the petitioner is precluded from challenging this finding of fact: Shri Ambica Mills Co. Ltd. v. S. B. Bhatt. It has not been shown that this finding is tainted with any error of law apparent on the record or vitiated by contravention of the rules of natural justice or want of jurisdiction. The Petitioner's case on this point must, accordingly, fail.

( 5 ) II. The other head on which exemption is claimed relates to Rule 3 (28) (a) of the said Rules. This item has undergone legislative changes, which may be shown as follows: (a) The item, as it stood, at the time of its adoption on 3-3-58 was: "sales of cotton fabrics. . . . . . . . . . on which duty has been paid under the Additional Duties of Excise (Goods of Special Importance) Act, 1957. " (b) The condition for exemption imposed by the words "on which duty has been paid. . . . . . " was, however; removed by deleting these words from the item by a notification of 7-2-61, so that since that date, the exemption of cotton fabrics from sales tax in this State became absolute. We are not, however, concerned with this change, for, the period in dispute is anterior to 7-2-61.

( 6 ) THE first question for determination is whether the Petitioner has succeeded in establishing that he was entitled to exemption under the original item, by showing that the additional duty payable under the Central Act of 1957 had, in fact, been paid in respect of his goods which were assessed to sales tax by the impugned order.

( 7 ) THE Petitioner produced before the Commercial Tax Officers some certificates from manufacturers to show that the additional duty of excise had in fact been paid in respect of some of the goods sold. But as regards some others, the Petitioner could not produce such certificates on the ground "that these manufacturers owned four power-loom factories and no additional excise duty was levied on such factory products". It is in respect of the sale of these latter goods that the Respondent disallowed deduction from the Petitioner's turnover to the extent of Rs. 3 lakhs, and made the impugned assessment.

( 8 ) IT appears from Notn. No. 107/57/14. 12. 57, issued under the Central Act of 1957 that no duty was payable under this