LexSTATE OF BOMBAY versus M/S. JAGMOHANDAS AND ANOTHER
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• • A STATE OF BOMBAY v. M/S. JAGMOHANDAS AND ANOTHER October 19, 1965 B [K. SUBBA RAO, K. N. WANCHOO, J. C. SHAH, S. M. SrKRI AND V. RAMASWAMI, JJ.J c D E F Bombay Sales Tax Act. 1946, ss. 13, 20-Sab of goods effected 011t- side State-Advance Tax paid-Suit for refu11d of tax-Li111i1atio11- Sections 13 and 20_, if bar. The respondents filed a suit for recovery of advance <ialcs-tax paid by them in respect of sale of goods effected outside the State, which they claimed as covered by Art. 286(1)(a) of the Constitution before it was amended by the Sixth Amendment Act. Though no orders of assess- ments had been mad.e by the sales-tax authorities, they had paid the tax under a mistake of law. They discovered their mistake when the Gov- ernor of the State promulgated Bombay Ordinance No. 2 of 1952. The trial Court decreed the suit. The High Court confirmed the decrne, re- jecting the appellant-State's contentions that the suit was barred by the law of limit1tion, and that the suit was barred by s. 13 and s. 20 of the Bombay Sales Tax Act, 1946, later replaced by ss. 19 and 20 of the Bombay Sales Tax Act, 1952. Jn ap~eal to this Court; HELD : (per Full Court) : The appeal must be dismissed. (i) The suits were not barred by the law of limitation. since the .suits were filed within the period prescribed by art. 96 of the 1st Sche- dule of the Limitation Act i.e., \\'ithin three years from•the date ·on \Vhich the mistake become known to the tax payers. [284 C-D; 285 BJ State of Kera/a v. Alun1iniJnuni Industries Ltd., Kundara, C.A. No. · 720 of 1963. Devided on April 21, 1965, (unreported) followed. (ii) Section 20 did not expressly bar the suit. The word 'a·sscssn1ent' in s. 20 cannot be read to include a mere fil- ing of return and payrne'nt by a registered dealer. The word 'assess- n1ent' has reference to assessments made under ss. 11 and 11 A of the Bombay Sales Tax Act, 1946. [282 EJ State of Tripura v. The Province of Ea.\'/ Bengal, [1951] S.C.R. 1, followed. (iii) Section 13 did not impliedly bar the suit. (Per Subba Rao, Wanchoo and Sikri, JJ.) Section 13 does not con- G ten1plate objections being entertained regarding the constitutional validity ·of any provision of the Act. Assuming that an appeal would lie against an order made under s. 13, the appeal would be only on the ground q1at the computation made by the Sales-tax Officer is erroneous or not justified by the provisions of the Act. [283 E-G; 285 A-BJ H (Per Shah and Ramaswami, JJ.) An objection that certain parts of the statute were ultra vires the legislature could be raised before the sales-tax authorities. The question v.rhether a transaction which faIJs within the Explanation to Art. 286(1 )(a) before it was amended by the Constitution (Sixth Amendment) Act does not affect the jurisdiction of the taxing authority : it is merely a question of interpretation of the con- tract, in the light of the statute, and the sale5-tax authorities are entitled 2SO SUPREME COURT REPORTS [1966) 2 s.c.R. to entertain the objection if raised before them, that the transaction was A not taxable because the State had no power to legislate in respect of an Explanation sale. But in this case, that stage was never reach_ed, the tax-payers were seeking refund of payments made under a mistake of law; they were not seeking to set aside any order of assessment. [285 C-Fl. Mis. Kamala Mills Ltd. v .. State of Bombay, [1966] 1 S.C.R. 64 B CIVIL APPELLATE JURISDICTION : Civil Appeals Nos, 219 and " 273 of 1964. Appeals from the judgment and decrees dated March 25/ 26th, 1960 of the Bombay (New Gujarat) High Court in First Appeals Nos. 44 and 45 of 1959 respectively. S. V. Gupte, Solicitor-General, R. Ganapathy Iyer, M. S. K. Sastri, R. H. Dhebar and B. R. G. K. Achar, for the appellant. G. S. Pathak, M. M. Vakil, J. B. Dadachanji, 0. C. Mathur and Ravinder Narain," for the respondents. c The Judgment of Subba Rao, Wanchoo and Sikri, JJ. was I) delivered by Sikri, J. Shah, J. delivered a separate concurring judgment on behalf of himself and Ramaswami J. Sikri, J. These arc two appeals on certificates granted by the High Court of Bombay and raise the same questions of law. It is, therefore, only necessary to give factS in Civil Appeal No. 219 E of 1964, which are as follows. M/s. Jagmohandas Masruwala, a registered dealer under the Bombay Sales Tax Act, 1946 (Bombay Act V of 1946) f
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