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TMI Blog1964 (1) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... ion by dealers in tobacco. All these petitioners carried on business in Madhya Bharat which later became part of the State of Madhya Pradesh. They were assessed to sales tax on their sales of tobacco in accordance with the notification issued by the State Government in exercise of powers under section 5 of the State Sales Tax Act and large amounts were collected by the Madhya Bharat Government and later by the Madhya Pradesh Government. The petitioners contended that the taxing pro- vision under which the tax was assessed and collected from them was unconstitutional as it infringed Article 301 of the Constitution and did not come within the special provisions of Article 304(a). Accordingly they prayed for appropriate writs or orders for refund of all the taxes that had been collected from them. In resisting these applications the Madhya Pradesh Government contended, first, that the taxing provisions did not offend Article 301 of the Constitution and that in any case, they satisfied the requirements of Article 304(a). It was further contended that even if the taxing provision was unconstitutional and the assessment and collection of tax had been without any legal authority the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be less than Rs. 1-9-0 per cent. or more than 6¼ per cent. of the taxable turnover, as notified from time to time by the Government by publication in the Official Gazette. This is subject to a proviso that the Government may in respect of a special class of goods charge tax up to 12¼ per cent. on the taxable turnover. The second sub-section of section 5 empowers the Government to notify at the time of notifying the tax payable by a dealer, the goods and the point of their sale at which the tax is payable. The legal position therefore is that unless there is a valid notification under section 5 no tax can be levied. The contention of the petitioners- dealers which has succeeded in the High Court is that the notifications on the strength of which the tax was assessed on them were invalid. The first notification was issued on April 30, 1950. This provided that with effect from the 1st day of May, 1950, sales tax shall be collected in respect of goods specified in column (2) of the Schedule that was attached to the notification at the point of sale mentioned in column (3) at the rates mentioned in column (4). The relevant portion of the Schedule ran thus: Sr. No. Na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een Madhya Bharat and other parts of India is directly impeded by this tax. On the authority of this Court's decision in Atiabari Tea Co., Ltd. v. State of Assam [1961] 1 S.C.R. 809., it must therefore be held that the tax contravenes the provisions of Article 301 of the Constitution. It may be mentioned that the later decision of this Court in Automobile Transport (Rajasthan) Ltd. v. State of Rajasthan A.I.R. 1962 S.C. 1406., which slightly modified the majority decision in Atiabari Tea Co.'s case [1961] 1 S.C.R. 809., does not alter this position. If the tax could have been claimed to be regulatory or compensatory it would have got the benefit of the latter decision. There is however no scope for such a claim. (See Firm Mehtab Majid and Co. v. State of Madras A.I.R. 1962 S.C. 928; 14 S.T.C. 355.). The tax could still be good if even though it contravened the provisions of Article 301 it came within the saving provisions of Article 304(a) of the Constitution. That Article provides in its clause (a) that notwithstanding anything in Article 301 or Article 303 the Legislature of a State may by law impose on goods imported from other States any tax to which similar goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... auses to be brought into Madhya Bharat any goods from outside for the purpose of processing, manufacturing or sale" or "who purchases goods in Madhya Bharat for the purpose of sale from a dealer who does not ordinarily carry on business in Madhya Bharat". When only such a sale is being made the point at which the tax is payable there is hardly any scope for a serious argument that the notification was intended to make sales by that same dealer of goods manufactured or produced in Madhya Bharat liable to tax. It may not be out of place to notice in this connection the distinction made by section 3 of the Madhya Bharat Sales Tax Act between sales by a dealer who imports goods [clause (a)] and other dealers [clauses (b) and (c)]. It is not unreasonable to think that the Act itself contemplated the sales by an importer of goods as meaning only sales by him of goods imported by him into Madhya Bharat. Apart from this, it has to be noticed that admittedly the notification did not make dealers who dealt only in home grown or home produced tobacco liable to pay the tax. That by itself would be sufficient to bring in the vice of discrimination which is the purpose of Article 304(a) to prev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cle 226 of the Constitution directing refund of taxes that had been paid under the U.P. Sales Tax Act on the respondent's forward transactions in silver bullion. After the levy of sales tax on such transactions was held to be ultra vires by the High Court of Allahabad the respondent asked for refund of the tax paid and when that was refused he applied to the High Court under Article 226 of the Constitution for a writ of certiorari for quashing the assessment orders and a writ of mandamus requiring the appellants to refund the amount illegally collected. The order made in this case by the High Court for refund was affirmed by this Court in appeal. In this case also the power of the High Court to order such refund was not challenged either before the High Court or before this Court. We see no reason to think that the High Courts have not got this power. If a right has been infringed-whether a fundamental right or a statutory right-and the aggrieved party comes to the court for enforcement of the right it will not be giving complete relief if the court merely declares the existence of such right or the fact that that existing right has been infringed. Where there has been only a thr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s discretion will depend in each case on its own facts and circumstances. It is not easy nor is it desirable to lay down any rule for universal application. It may however be stated as a general rule that if there has been unreasonable delay the court ought not ordinarily to lend its aid to a party by this extra- ordinary remedy of mandamus. Again, where even if there is no such delay the Government or the statutory authority against whom the consequential relief is prayed for raises a prima facie triable issue as regards the availability of such relief on the merits on the grounds like limitation the court should ordinarily refuse to issue the writ of mandamus for such payment. In both these kinds of cases it will be sound use of discretion to leave the party to seek his remedy by the ordinary mode of action in a civil court and to refuse to exercise in his favour the extraordinary remedy under Article 226 of the Constitution. The prayer for refund has been allowed by the High Court in the applications out of which Civil Appeals Nos. 362-377 of 1962 and Civil Appeals Nos. 861-867 of 1962 and Civil Appeal No. 25 of 1963 have arisen. It appears that the tax provisions under which t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to notice that the delay in these petitions was more than the delay in the petition made in Bhailal Bhai's [1960] M.P.C. 304; 11 S.T.C. 511., case out of which Civil Appeal No. 362 of 1962 has arisen. On behalf of the respondents-petitioners in these appeals (C.A. Nos. 861 to 867 of 1962) Mr. Andley has argued that the delay in these cases even is not such as would justify refusal of the order for refund. He argued that assuming that the remedy of recovery by action in a civil court stood barred on the date these applications were made that would be no reason to refuse relief under Article 226 of the Constitution. Learned counsel is right in his submission that the provisions of the Limitation Act do not as such apply to the granting of relief under Article 226. It appears to us however that the maximum period fixed by the Legislature as the time within which the relief by a suit in a civil court must be brought may ordinarily be taken to be a reasonable standard by which delay in seeking remedy under Article 226 can be measured. The court may consider the delay unreasonable even if it is less than the period of limitation prescribed for a civil action for the remedy b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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