KANTI LAL BABULAL versus H. C. PATEL

Citation: [1968] 1 S.C.R. 735 · Decided: 29-09-1967 · Supreme Court of India · Bench: K.N. WANCHOO · Disposal: Appeal(s) allowed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

KANTI LAL BABULAL 
v 
B. C.PATEL 
September 29, 1967 
(K. N. WANCHOO, C. J., R. S. BACHAWAT, V. RAMASWAMI, 
G. K. MITTER, AND K. S. HEGDE, JJ.J 
Bombay Sales Tax Act (Bom. 5 of 1946) S. 12A(4)-If infringes 
Art. 19(1)(f), Constitution. 
A 
B 
In view of Art. 286 \ll (a) of the Constitution •. as it stood at 
the relevant time, the sa es by the appellants-(reg1stered dealers) 
outside the State of Bombay were not exigible to tax; The appel-
C 
!ants were directed to refund amounts collected by them from their 
purchasers in respect of these sales by way of tax, failing which the 
amounts would be forfeited under s. 12A(4) of the Bombay Sales 
Tax Act. The appellants filed a writ petition in the High Court to 
restrain the respondents from taking action against them under 
s. 12A(4). The High Court dismissed the petition. In appeal, this 
Court, 
D 
Held: S. 12A(4) of the Bombay Sales Tax Act was void being 
violative of Art. 19(1)(f) of the Constitution. 
Prima facie the appellants were entitled to. get the amount 
ordered to be refunded to them. It was for the respondents to estab-
lish that the same was liable to be forfeited. Even according to the 
E 
respondents that amount could be forfeited only as a measure of 
penalty. Under our jurisprudence no one can be penalised without 
a proper enquiry. (740 E-F]. 
The impugned provision 
which 
provided. forfeiture of the 
amount in the hands of the dealers, did not lay down any procedure 
for ascertaining whether in fact the dealer concerned had collected 
any amount by way of tax from his purchasers outside the State p 
and If so ,what that amount was. Neither S. 12A(4) nor any rule 
framed wider the Act contemplated any enquiry, much less a rea-
sonable enquiry in which the person complained of could plead and 
prove his case or satisfy authorities that their asswnptiona were 
either wholly or partly wrong, This section did not contemplate adju-
dication nor provide for making any order. Hence, it was doubtful 
whether any appeal could be filed against a demand made under 
G 
that section under S. 21 (740 G-H; 741-E]. 
Abdul Quadar and Co. v. Sales Tax Officer, Hyderabad (1964] 
6 S.C.R. 867, Dr. N. B. Khare v. State of Delhi. (1950] S.C.R. 519. 
State of MadW1$ v. V. G. Rao. (1952] S.C.R. 597 followed. 
Ram Gopal. v. Sales Tax Officer, Surat and another, 16 S.T.C. 
1005 disapproved. 
OVIL APPELLATE JURISDICTION: Civil Appeal No. 126 of B 
1966. 
Appeal from the judgment and order dated November 29, 
and December 2, 1963 of the Gujarat High Court in Special Civil 
Application No. 641 of 1962. 
735 
7Sti 
SUPBllllB oouwr 1181'01\TS 
[1968) l 8.0.B. 
A 
K. R. Chaudhuri, for the appellant. 
R. M. Hazarnavis, K. L. Hathi and S. P. Nayar, for the res-
pondents. 
S. T. Desai and /. N. Shroff, for the intervener. 
The Judgment of the Court was delivered by 
B 
Hegde, J.-The main controversy in this appeal by certificate 
is as to the constitutional validity ·of s. 12A(4) of the Bombay Sales 
Tax 1946, to be hereinafter referred to as the Act. As in our judg-
ment that provision is void, the same being violative of Art. 
19(l)(f) of the Constitution, we have not thought it necesssry to 
examine the other contentions raised in the appeal. 
C 
The facts material for the purpose of deciding the question 
formulated above, are these: The appellants are dealers registered 
under the Act carrying on business in art silk, cotton and band• 
loom cloth. During the period January 26, 1950 to March 31, 1950, 
the appellants effected various sales outside the State of Bambay. 
D As those sales were protected by Art. 286(l)(a) of the Constitution, 
they were outside the reach of the Act. But yet the ssles tax officer 
assessed the turnover relating to those sales. The tax levied in 
respect of that turnover was Rs. 4,494/3/9. In appeal, the order 
-0f the sales tax officer was affirmed by the Assistant Collector of 
sales tax. But the Additional Collector of ssles tax in revision re-
E vised the levy to some extent and ordered a 
refund 
of 
Rs. 2.238/0/6. That amount wru; paid to the assessees. Not being 
satisfied with the order of the Additional Collector of ssles tax. 
the appellants took up the matter in revision to the Sales Tax 
Appellate Tribunal. But even before they moved the Tribunal 
in revision, the Additional Collector of ssles tax by his letter 
F dated May 17, 1958, informed the appellants that unless they 
furnished to the sales tax officer proof of their having refunded

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