TMI Blog1959 (12) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... he Indian Partnership Act. Within the premises of the mills, the petitioner is said to be having a department of bleaching, dyeing, and finishing of textiles which, for purposes of account, is being maintained as a separate department and is being run under the name and style of Oriental Textile Finishing Mills, the partners, both of the petitioner-mills as well as of this department, being the same individuals. The concern, according to the petition, not only dyes, finishes and packs the produce of the petitioner-mills so as to make it marketable for sale, but it also, in addition, manufactures the unbleached, undyed and unfinished textile goods of other textile mills, so that the same may be made marketable and sold by the textile mills on whose behalf the goods are handled and manufactured. At this stage I may observe that the word "concern" occurring in para. 2 of the petition apparently refers to the department of bleaching, dyeing and finishing of textiles mentioned in the opening part of this para. The petition then proceeds that the petitioner-mills has got a certificate of registration as a dealer, and in clause 3 of the certificate it is, inter alia, provided that the sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... firewood and coal etc.) which had been consumed by the petitioner, were used in the manufacture of "any goods for sale", or "in the execution of a contract", and the petitioner had only charged the labour charges pertaining to the sale, with the result that there was no sale of the raw material either to himself or to the customers for and on whose behalf the goods had been finished (i.e., manufactured). The petition then refers to a Supreme Court decision holding that work done by a contractor could not be deemed to be a sale of the raw material which is utilised in building contracts. The impugned order dated 8th of July, 1958, has then been described as wholly arbitrary and in utter disregard of section 5(2)(a)(ii) of the Act and of the terms of the registration certificate. The word "manufacture" is also alleged to include the work of processing by bleaching, dyeing, printing and finishing. The imposition of the tax is said to be without any legal authority, infringing the petitioner's fundamental right to carry on trade, thus violating Article 19(1)(g) of the Constitution. The alternative remedy provided by the statute is described as onerous because no appeal is entertainabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore us for disposal. 4.. The learned Additional Advocate-General has raised a preliminary objection on the ground that the assessee has a right of appeal and then a right of revision and also a right to have a reference made to this Court on a question of law; therefore, this Court should refuse to entertain the present petition under Articles 226 and 227 of the Constitution. Mr. Bhagirath Dass has tried to meet this objection by relying on Kailash Nath v. State of U.P. [1957] 8 S.T.C. 358; A.I.R. 1957 S.C. 790., where an objection raised on behalf of the State Government, that the petitioners in the reported case must have resort to remedies available under the ordinary law or proceed under Article 226 of the Constitution and not invoke Article 32, was negatived by the Supreme Court in view of the decision in Bengal Immunity Co. Ltd. v. State of Bihar [1955] 6 S.T.C. 446; [1955] 2 S.C.R. 603. The following quotation at page 618 of the last cited case was reproduced: "We are unable to agree with the above conclusion. In reaching that conclusion the High Court appears to have overlooked the fact that the main contention of the appellant company, as set forth in its petition, is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitions under Article 32 of the Constitution which deals with the enforcement of the fundamental rights and which imposes a duty on the Supreme Court to enforce such rights. In my opinion, there is no hard and fast rule that this Court must refuse to entertain a petition under Article 226 of the Constitution merely because there is an alternative remedy prescribed. It would certainly be a relevant factor to take into account as also would be the factor that violation of a fundamental right is alleged, in determining whether or not to exercise the discretionary power vested in this Court under the above Article. In K.S. Rashid and Son v. The Income-tax Investigation Commissioner[1954] S.C.R. 738; 25 I.T.R. 167. , the Supreme Court dealing with an appeal from an order of this Court dismissing an application under Article 226 of the Constitution made the following observations: "For purposes of this case it is enough to state that the remedy provided for in Article 226 of the Constitution is a discretionary remedy and the High Court has always the discretion to refuse to grant any writ if it is satisfied that the aggrieved party can have an adequate or suitable relief elsewhere. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... illegality of the tax is apparent on the face of the record or of the law on which the taxing authority relies for the imposition. It is furthermore desirable to bear in mind that by mere assertion of alleged violation of some fundamental right, the party should not be permitted to by-pass and ignore proper procedure prescribed by the Legislature for the redress of grievances under the Sales Tax Act. In the circumstances of the present case, however, the matter having been placed before a Division Bench for disposal on account of the importance of the question and because the petitioner asserts that his fundamental right has been infringed, we decided to hear this petition on merits. 7.. Mr. Bhagirath Dass has contended that there is no dispute as to facts which according to him are-(1) that the Punjab Woollen Textile Mills is a registered dealer under the Punjab Sales Tax Act, (2) that goods purchased as tax-free have been manufactured for sale, and (3) that goods fabricated and finished are exempt from sales tax but goods belonging to third parties are not exempt according to the order of the assessing authority. The counsel submits that the assessing authority has wrongly inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only these processes, without more, then the petitioner would be using the material purchased by it in the process of manufacture and therefore exempt from sales tax. At this stage it may be noticed that the assessee had raised only two objections before the assessing authority: (1) that the finishing work on labour basis was done on behalf of the registered dealers in Punjab and as such it was covered by section 5(2)(a)(ii) of the Act, and (2) that, at any rate, the assessee should have purchased the material in finishing work on labour basis on payment of sales tax, and not on the strength of the dealer's registration certificate, with the result that he may have infringed the provisions of section 23(1)(c) of the Act, entailing his prosecution, but that it was not a fit case for assessment. On the first objection, the assessing authority held that the assessee never manufactured any goods for sale but, on the other hand, derived some benefit in the form of wages. The assessing authority also observed that the provisions of section 5(2)(a)(ii) came into play only if the goods are sold to registered dealers for re-sale. At this stage it would be helpful to refer to the certificate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no exemption granted for the purposes of execution of any contract. Under section 5(2)(a)(ii) such goods as are meant for use by him in the execution of any contract etc. have to be specified in the certificate of registration of the assessee for these purposes, if he chooses to claim exemption by deducting his turnover in this respect from his gross turnover. The counsel then faintly made a passing reference to the Seventh Schedule of the Constitution and submitted that the definition of "sale" as contained in the East Punjab Act No. XLVI of 1948 is in conflict with entry No. 54 of the Second List; but, when his attention was drawn to the fact that this ground was not contained in his writ petition, and that the opposite party had obviously no notice of it, the counsel did not press or pursue this point. Lastly it was contended that it is not the purchase by the petitioner which is being taxed but the sale, and he submitted that as held by the Supreme Court in the State of Madras v. Messrs Gannon Dunkerley Co. (Madras) Ltd. [1958] 9 S.T.C. 353; A.I.R. 1958 S.C. 560. and in Firm of Messrs Peare Lal Hari Singh v. The State of Punjab[1958] 9 S.T.C. 412; A.I.R. 1958 S.C. 664. , ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Madhya Pradesh A.I.R. 1955 S.C. 781 at p. 786. ), but in any case it is a point which might well be raised before the appellate authority in accordance with the law governing appeals and is not an abstract proposition of law on which any fundamental right of the petitioner depends. In this connection, it is interesting to observe that the counsel also agreed that he was taking up this matter in his appeal which had already been filed by him. The contention that taxing statutes should be strictly construed in favour of the citizens and against taxing authority also need not detain us because it would be open to the petitioner to support his appeal on these and other grounds on which he wants to place reliance; it may be contended, on the other hand, that though what the petitioner really claims is an exemption, it will have to be considered as to whether or not exemptions attract strict and rigid interpretation against the assertions of the assessee. It is equally unnecessary to deal with the authorities on which Mr. Doabia placed reliance in support of his contention that the word "manufacture" does not cover the dyeing, bleaching and processing of third parties' cloth. To men ..... X X X X Extracts X X X X X X X X Extracts X X X X
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