TMI Blog1966 (2) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... to March 31, 1951, the respondents were assessed to sales tax under the Travancore-Cochin General Sales Tax Act, 1950, by the assessing authority, Moovattupuzha, on a turnover of Rs. 14,04,732-7-6 which included Rs. 49,318-7-4 collected by the respondents from their constituents as tax on their sale transactions. The respondents paid the tax assessed and commenced an action in the court of the District Judge Parur, for a decree for Rs. 7,577-9-1 claiming that the amount was in excess of tax lawfully due from them under the Act. The court of first instance decreed the claim for Rs. 7,477-9-1 with interest and proportionate costs, and the High Court of Kerala confirmed that decree. In this appeal with special leave, on behalf of the State of Kerala, the principal ground which falls to be determined is whether the jurisdiction of the civil court to try the suit is excluded. Section 23A of the Travancore-Cochin General Sales Tax Act (11 of 1125 M.E.) provides that: "No suit or other civil proceeding shall, except as expressly provided in this Act, be instituted in any court to set aside or modify any assessment made under this Act." But this express bar on which counsel for the S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x is to be ascertained. The income-tax eligible is determined by reference to the total income so ascertained, and only by reference to such total income. Under the Act (section 45) there arises a duty to pay the amount of tax demanded on the basis of that assessment of total income. Jurisdiction to question the assessment otherwise than by use of the machinery expressly provided by the Act would appear to be inconsistent with the statutory obligation to pay arising by virtue of the assessment. The only doubt, indeed, in their Lordships' mind, is whether an express provision was necessary in order to exclude jurisdiction in a civil court to set aside or modify an assessment." In delivering the judgment of the majority in K. S. Venkataraman Co. (P.) Ltd. v. State of Madras, Subba Rao J. observed: "If a statute imposes a liability and creates an effective machinery for deciding questions of law or fact arising in regard to that liability, it may, by necessary implication, bar the maintainability of a civil suit in respect of the said liability. A statute may also confer exclusive jurisdiction on the authorities constituting the said machinery to decide finally a jurisdictional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd of Revenue against the order of the taxing authorities---original as well as appelate. By section 24 power is conferred upon the State Government to frame rules, setting up machinery for determination of the net chargeable turnover, for refund of tax collected in excess of true liability and for other incidental matters. The Act is therefore a complete code dealing with the levy, assessment and collection and refund of tax. It authorises investment of power in a hierarchy of authorities to administer the Act. For the purpose of making assessment of tax, the authorities have power to decide all questions arising before them, and the orders of the appellate authorities subject to the exercise of revisional jurisdiction under section 15 are declared final. Liability to pay tax arises under and by virtue of the provisions of the Act, and the quantum of liability may be determined under the Act alone. It is true that in Kamala Mills case reliance was placed on behalf of the claimant upon, Basappa's case, and the following observations were made by the court: "In Provincial Government of Madras (now Andhra Pradesh) v. J. S. Basappa it was held by this court that the finality attac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The action of the taxing authority in Basappa's case in taxing transactions which he erroneously held were taxable was no more outside the Act, than the action of the taxing authority in Kamala Mills case. If it be granted that the jurisdiction of the civil court may be excluded by express enactment or by intendment arising from the scheme of the Act, Basappa's case must be regarded as wrongly decided. It is true that even if the jurisdiction of the civil court is excluded, where the provisions of the statute have not been complied with or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure, the civil courts have jurisdiction to examine those cases : Secretary of State for India v. Mask Co. Counsel for the respondents urged that the case of the respondents fell within that exception, since the Sales Tax Officer in imposing tax liability acted in defiance of the mandatory provisions of the Act and in support of the argument he placed reliance upon rule 7 of the Rules framed under the Act and the definition of " turnover " under the Act. Under the Act, sales-tax is charged for the year at the prescribed rates on the total turno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved: "Under the definition of turnover the aggregate amount for which goods are bought or sold is taxable. This aggregate amount includes the tax as part of the price paid by the buyer. The amount goes into the common till of the dealer till he pays the tax. It is money which he keeps using for his business till he pays it over to Government. Indeed, he may turn it over again and again till he finally hands it to Government. There is thus nothing anomalous in the law treating it as part of the amount on which tax must be paid by him. This conception of a turnover is not new. It is found in England and America and there is no reason to think that when the legislatures in India defined 'turnover' to include tax also, they were striking out into something quite unknown and unheard of before." Counsel for the respondents contended that these observations made in interpreting the terms of the Madras General Sales Tax (Definition of Turnover and Validation of Assessments) Act, 1954, have no bearing on the interpretation of the expression " turnover " as used in the Travancore-Cochin General Sales Tax Act. But the observations made by the court were not made in the context of any spec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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