LexKAMALA MILLS LTD. versus STATE OF BOMBAY
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64 KAMALA MILLS L ln. v. STATE OF BOMBAY April 23, 1965 [P. B. GAJENDRAGADKAR, C.J., K. N. WANCIIOO, J. C. Sll~H. RAGHUBAR DAYAL, S. M. SIKRI, R. S. BACllAWAT AND V. RAMASWAMI, JJ.] Bombay Sales Tax Act, 1946 (5 of 1946), s. 1~Suits to clwl/engc assessments 1nade under Act and rules made :hereunder barred-'Outside' sales wrongly assessed as 'inside' sales--Suil lo recover tax wrongly charg- ed whether lies .. The appellant, a public limited company manufacturing and selling textiles was a 'dealer' under the Bombay Saks Tax Act 1946. For the period 26th January 1950, to 31st March 1951, it wa< as<csscd to sales tax on certain sales which \\·ere treated by the Sales Tax Authoritie~ as 'inside' sales but which according to the decision of the Supren1e Court in the Bengal Immunity Co. Ltd. v. State of Biliar and Ors. I 1955] :Z S.C.R. 603, <lclivc1cd on 6r..1. Scp'.cmb~r 1955, \.Vere 'outside' sales non- taxable under the Act. After the above decision the appellant discovered that it had been illegally suhjccted to tax 111 rc...,pcct of the said 'outside' sales. The period for remedies under the Act having expired. it filed a suit for the recovery of sales-tax ille~ally collected from it in respect of the 'outside' sales. On bchnlf of the respondent State the plea taken in defence was that the suit was barred by s. 20 of the Act. Accepting the plea, the trial court dis.11isscd the suit. 1·he High Court. in appeal. took the same view, whereupon, with certificate, the appelJant came to this l..ourt. The questions, arising out of the arguments on behalf of the appellant, which fell for determination \Vere : ( 1) whether an assessment in viola- tion of a statutory provision could claim the status of an assessment made under the Act, within the meaning of s. 20; (2) whether the declsion by the appropriate authority .as to the nature of the transaction was a decision on a collateral fact. the finding on which alone conferred jurisdiction on the authority to levy the tax, or was it a decision on a queotion of fact which had to be determined by the authority itself as one of the issues before it? (3) Whether s. 20 was valid if con.<trucd as being a comp!·~i.c bar to a suit such as filed by the appellant. HELD: (i) Section 20 protects "assessment mac.le under the Act, or the rules made thereunder"' by appropriate authorities. In Firm and llluri Subbaya Cherly arul Sons this Coun. interpreting a similar provision in s. IBA of the Madra< General Sales Tax Act observed that the ex- pression ••any asses.~ment mude under this Act" was wide enough to cover all assessments made by the appropriate authorities under the Act whether the said assessments were correct or not. There can be little doubt. that the ciause "an asscs~ment made" c;1nnot mc;}n :ln assessment properly and correctly made. [72 B-D] In its plaint the appellant v.·2.s undoubtedly c~1Iliag into question the assessment order made against it and such a ch;11Jcnge was plainly pre>- hib~ed by s. 20. 172C'l • , B c D E F G H A • ' B c • D r: F G • H KAMALA MILLS V. STATE 65 Firm and ll/uri Subbaya Chetty and Sons v. The State of Andhra Pradesh, [1964] 1 S.C.R. 752, relied on . (ii) If the relevant provisions which confer jurisdiction on the appro- priate authorities to levy assessment on the dealers in respect of tran- sactions to which the charging section applies are examined, it is im- possible to escape the conclusion that all questions pertaining to the fia .. bility of the dealers to pay assessment in respect of their transactions are expressly left to be decided by the appropriate authorities under the Act as matters falling within their jurisdiction. Whether or not a return is correct; whether or not transactions which are not mentioned in the return, but about which the appropriate authority has knowledge, fall within the mischief of the charging section; what is the true or real extent of the transactions which are assessable; all these and other allied' questions have to be determined by the appropriate authorities them- selves, and so it is impossible to accept the argument on behalf of the· appellant that the finding of the appropriate authority that a particular transaction is taxable under the provisions of the Act, is a finding on a collateral fact which gives the appropriate authority jurisdiction to take: a further step and make the actual order of assessment. The w
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