BHARAT KALA BHANDAR LTD versus MUNICIPAL COMMITTEE, DHAMANGAON

Citation: [1965] 3 S.C.R. 499 · Decided: 26-03-1965 · Supreme Court of India · Bench: K. SUBBA RAO · Disposal: Appeal(s) allowed

Cited by 11 judgment(s) · cites 2 · see the full citation network in Lexace

Judgment (excerpt)

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lK. 
BHARAT KALA BHANDAR LTD. 
V. 
MUNICIPAL COMMITTEE, DHAMANGAON 
March 26, 1965 
SlJBBA RAO 
RAGHUBAR DAYAL, J. R. MuoHOLKAR, 
BACHAWAT AND V. RAMASWAMI. JJ.] 
R. S. 
Central Provinces and Berar Mi;nicipa!ities Act (2 of 1922), ss. 48 
and 84(3)-Scope of-Suit for refund of excess tax prd-If barred. 
The appellant was paying a tax at the rate of one anna per 
weight of cotton, under s. 66(l)(b) of the Central Prcvmces Mumc1-
palities Act, 1922, from 1936. In 1941 the rate of tax was ;ncreased te: 
4 as. In 1952, the appellant filed a suit for recovery of the excess tax 
paid within 3 years cf the date of suit. It was contended that after the 
coming into force of s. 142A of the Governme.nt of India Act, 1935, on 
1st April 1939, till 25th January 1950, a tax m excess of Rs. 50 per 
annum could not be ·imposed by the respondent, and, after the commg 
into force of the Constitution the upper limit of the tax was raised to 
Rs. 250 per annum under Art. 276 of the Constitution; and that as the 
appellant was already paying more than this amount per year even 
at the rate of one anna, the enhanced rate of 4 annas was illegal. The 
trial court decreed the suit for recovery from the Municipal Com-
mittee of excess tax paid by the appellant within 3 years of the date of 
suit but on appeal, the High Court held that the suit was bad for non-
corrn::liance with the requirements of s. 48 of the Act. according 
to which, a suit for anything done or purported to be done under 
the Act shall b2 instituted only after the exp'.rat:cn of 2 months 
aft0r serving a written notice 2nd \vithin 
months from the date 
of the accrual of the alleged cause of action. 
In its appeal to th's Court, the appellant contended that it was 
a case of recovery of e.n illegal tax and therefore, a· clalm for its 
refund fell outside the provisions of s. 48. The respondent contended 
that (i) since the ban was not upon the rale of tax but upon the 
excess collection thereof, the collection of a tax above the constitu-
tional limit was not without jurisdiction but only illegal or irregular 
and therefore, the suit would be in respect of a matter "purported to 
be done under the Act" and the provision of s. 48 would apply, and 
(ii) on the basis of Raleigh Investment Company Ltd. v. Governor-
General in Council, (74 I.A. 50) the suit was barred by s. 84(3) of the 
Act, which enacts that no objection shall be taken to any assessment 
l!i any other manner than is provided in the Act. 
HELD. (Per K. Subba Rao, J. R. Mudholkar and V. Ramaswami 
JJ.): (i) Smee the respondent had no authority to levy a tax beyond 
what .s. 142A of the Government of India Act, 1935, or what Art. 276 
permitted, the assessment proceedings were void in so far as they pur-
ported to levy a tax m excess of the permissible limit and authorise 
its. collection, and the assessment order would be no answer- to 
Sult for the 
of the excess amount, and therefore. the suit was 
maintainable. t522-G-HJ 
The Constitution is the fundamental law of the land and it is un-
necessary. to pro':'ide in. a:iy law that anything done in disregard of 
the Constitut10n 1s prohibited. Such a prohibition has to be read into 
499 
SUPREME COURT REPORTS 
(1965] 3 s.o.a. 
every enactment, and where such prohibition exists or can. be implied, 
anything done or purported. t? be .done by. an auth_ority must be 
regarded as wholly without iunsdiction, and is not entitled to a 
tection of the law under colour of which that act was done. r512A-B, 
516B-C] 
Poona City Municipal Corporation v. Dabtatraya Nagesh Deodhar, 
[1964] 8 S.C.R. 178, followed. 
(ii) A tax .can be recovered only. if it is 
and it would be 
payable only after it is assessed. It is therefore futile to contend that 
the ban placed bys. 142A of the Government .of India Act and Art. 276 
of the Constitution, extends only to recoveries and not to an earlier 
stag.e. [513G] 
It is true that the respondent had jurisdiction to recover an 
amount up to the constitutional limit, But it cannot be contended that 
merely because of this, the recovery by the respondent of an amount 
in excess of the constitutional limit was only irregular or at the worst 
illegal. Where power evists to assess and recover a ta><: up to a parti-
cular limit and 
assessment or recovery of anythmg above that 
amount is prohibited, the assessment or recovery of an amount in 
excess is wholly without jurisdiction. To sach a case, the statute 
under wh;ch 

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