TMI Blog1959 (2) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... he taxable turnover as the customers paid the money direct into the treasury and not to the petitioner. This contention was rejected by the Sales Tax Officer who included the amount in the taxable turnover. The action of the Sales Tax Officer was upheld by the Deputy Commissioner of Sales Tax on appeal. The petitioner took the matter in revision to the Board of Revenue, but the revision application was dismissed on 27th April, 1955. Thereafter the petitioner made an application to the Board of Revenue under section 25(1) of the Bihar Sales Tax Act for stating a case to the High Court on the question of law. On 13th February, 1956, the Board of Revenue rejected the application and refused to refer the question to the High Court. The petitioner did not apply to the High Court under section 25(2) of the Bihar Sales Tax Act against the order of the Board of Revenue refusing to make the reference. But on 16th January, 1957, the petitioner made the present application to the High Court for grant of a writ under Article 226 of the Constitution in the nature of mandamus directing the respondent, namely, the State of Bihar, to refund to the petitioner the sales tax realised on the aforesaid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hout penalty, under section 13, or to an order passed under sub-section (3) of section 12 or under section 24A, or any person objecting to an order passed under section 14B may, in the prescribed manner, appeal to the prescribed authority against such order: Provided that no appeal, other than an appeal against an order under section 14B, shall be entertained by the said authority unless he is satisfied that twenty per centum of the tax assessed or such amount of the tax as the appellant may admit to be due from him, whichever is greater has been paid. (2) Every appeal under this section shall be presented within fortyfive days of receipt of the notice issued under sub-section (4) of section 14, but the authority before whom the appeal is filed may admit an appeal af ter the expiration of the said period if he is satisfied that the applicant had sufficient cause for not presenting the appeal within that period. (3) Subject to such rules of procedure as may be prescribed the appellate authority in disposing of any appeal under sub-section (1) may (a) confirm, reduce, enhance or annul the assessment or penalty, if any, or both, or (b) set aside the assessment or penalty, if any, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , that an elaborate machinery has been created by the Bihar Sales Tax Act for the determination of the liability of the dealers to pay sales tax. A special code of procedure has been provided by the Legislature for ensuring correct assessment of tax. It is the machinery which is created by the statute which should normally be used for the purpose of assessment and all complaints of the dealers against the assessment ought to be adjudicated upon in accordance with the machinery provided by the statute. The normal method of challenging the assessment is, therefore, by way of appeal to the prescribed authorities under section 24 of the Bihar Sales Tax Act, by way of revision to the Board of Revenue under the same section and by stating a case to the High Court as prescribed by section 25 of the Act. A writ under Article 226 of the Constitution is an extraordinary remedy and may be used in proper cases where no other adequate legal remedy exists. But the provision of Article 226 of the Constitution is not meant to short circuit or to override the legal tribunals created by the elaborate machinery of the Bihar Sales Tax Act. The general principle applicable in a case of this description ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Council[1948] 15 I.T.R. 332; 74 I.A. 50, at page 62., where a suit had been brought by an assessee claiming repayment of part of a larger sum of money under an assessment to income-tax made upon it. The claim was based upon the fact that in the computation of assessable income effect had been given to a provision of the Income-tax Act which in the submission of the assessee was ultra vires the Indian Legislature. It was held by the Judicial Committee that the suit was not maintainable in view of section 67 of the Income-tax Act. Lord Uthwatt, who pronounced the opinion of the Judicial Committee, stated as follows: "In construing the section it is pertinent, in their Lordships' opinion, to ascertain whether the Act contains machinery which enables an assessee effectively to raise in the courts the question whether a particular provision of the Income-tax Act bearing on the assessment made is or is not ultra vires. The presence of such machinery, though by no means conclusive, marches with a construction of the section which denies an alternative jurisdiction to inquire into the same subjectmatter. The absence of such machinery would greatly assist the appellant on the question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w far this argument was based on the premise, now held by their Lordships to be fallacious, that the assessments were a nullity but it can presumably be placed on a broad ethical basis whatever may be the true view of the assessments. On this footing then, the argument must be that the assessee has a right enforceable against the Commissioner to require refund of tax paid by him on grounds of equity and good conscience, though the assessment has been made and the tax received in good faith. Their Lordships cannot accept this argument. They have reviewed the code of incometax law for the purpose of showing that it exhaustively defines the obligation and remedies of the taxpayer. It would be wholly incompatible with this that he should have a collateral right, necessarily vague and ill-defined, founded on the principles of equity and good conscience." Applying the principle of these authorities to the present case I hold that the petitioner had an effective remedy provided by the machinery of the Bihar Sales Tax Act; and not having chosen to avail himself of that statutory remedy within the time granted, the petitioner cannot be permitted to attain his object by a method of his own c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re manufacture precedes sale for manufacture and the curer shall be liable for the payment thereof and shall remain so liable until the liability is to the knowledge and satisfaction of the proper officer, transferred as provided in rule 29 to another person duly licensed to carry on business in such products." Rule 24 states as follows: "24. How curer may dispose of his products.-(1) Notwithstanding the provisions of rule 9, unmanufactured products shall immediately after they have been cured be (i) cleared on payment of duty, or (ii) deposited in a public warehouse appointed for the storage of such products, or (iii) deposited in a bonded store-room on the curer's own premises, or (iv) transferred to a wholesale dealer possessing a private warehouse licensed for the storage of such products either to the dealer direct or through a broker or commission agent acting on his behalf. (2) Whichever of the foregoing alternatives the curer elects to adopt he shall not sell the products wholesale except to a person duly licensed under these rules to carry on business in such products or to a person so licensed to warehouse such products on which duty has not been paid." Rule 25 provides f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excise duty in the receipt granted by him to the customers. But that circumstance is quite immaterial and the petitioner cannot escape the liability of payment of sales tax by means of such a contrivance. It is obvious that in examining the question of liability of the petitioner to sales tax we must look at the substance of the transaction and not at the mere form in which the petitioner granted receipts or in which he kept his accounts. For the reasons already given, I hold that the amount of Rs. 41,736 which was paid as excise duty by the customers was part of the valuable consideration for the sale of the tobacco and so constituted part of the sale price within the meaning of section 2(h) of the Bihar Sales Tax Act. It follows, therefore, that the amount of Rs. 41,736 was rightly included in the taxable turnover of the petitioner and assessed to sales tax by the authorities constituted under the Bihar Sales Tax Act. In my opinion, the petitioner has not made out a case for grant of a writ under Article 226 of the Constitution. The application fails and is accordingly dismissed with costs. Hearing fee Rs. 200. CHOUDHARY, J.-I agree. Applications dismissed. - - TaxTM ..... X X X X Extracts X X X X X X X X Extracts X X X X
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