LexSTATE OF MADHYA PRADESH versus BHAILAL BHAI & ORS.
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I
6 S.C.R.
SUPREME COURT. REPORTS
STATE OF MADHYA PRADESH
v.
BHAILAL BHAI & ORS.
(P. B. GAJBNDRAGADKAR, K. N. WANCl{OO, K. c. PAS
GUPTA, ]. C. SHAH AND N. RAJAGOPALA AYYANGAll JI.)
COftltltution of India, 1950, A.rtl. 226, 301 and 304-luue of Wrlf-
Unrewonahle
delay
in
moving Coun-what
iJ-Sale1
T~
lmpedint Inter Stolt trade-Validity-Tax paid under mistak~
Ordtr of np111me111-Jurildiction of High Court 1m4er A.rt. 221
The respondents are doalen iii tobaccp in the State of Madhya B))ant.
The appellant imposed sales tu on the sale of imported tobacco by the
respondents.
But no such tax was imposed on the sale of indigcoot11
tobacco. The respondents filed petitions under Art. 226 of the Constiru.
lion for the bsue of writ of mandamus 'directing the refund of sales tu:
collected from them. They contended that the impugned tu violated
Art. 301 (a) of the Constitution and they pru"d the tax under a mistake at
law and the tax so paid was refundable under s. 72 of the Indian Con-
tract Act, 1872. The appellant contended that there was no violation ol.
Art.
301 of the Constitution, even if there was such violation the tu:
came witllin the special provision under Art. 304(a), the High Court bu
no power to direct refund of tax already paid and in any event the Hiaft
Court should not exercise its discretionary power of issuing a writ of mart-
llamus directing this to be done since there was unreasonable delay la
tiling the petition. The High Court rejected all the contentions of the
appellant and a writ of mandamus was issued as prayed for. The appel-
lants appealed to this Court. Before this Court substantially the same
contention:;. a11 were canvassed before the High Court were raised.
Held: (i) Even though the liability to pay tax was crµted by the
sale of tobacco in Madhya Pradesh and not by the import itself the facts
and circumstances showed that trade and commerce. as between Madh11
Bharat and other parts of India was directly impeded by tb,o impulld
wx and therefore the said tax violated Art. 30l(a) of the Constitution.
Atiabarj Tea Co. Ltd. v. Statt of Assam. [1961) I S.C.R. 809, A.1110-
mnbileJ Transport (Ra/allhan) Ltd. v. State of Rajasthan, [1963) I S.C.R.
491 and Firm Mehtab Majid I Co. v. Stat• of MadrtU, A.l.jl. 1943 S.C.
'21, referred to.
(ii) Even thou'lb the tu contravened Art.
~OJ of the ConstituliGa
it would he valid if it came within the saving provi•illtll ot Art. J04 pl
tbe Constitution.
(lii) Tobacco manufll!'!ured or produce4 in the appellant ~late, Ii niJac
lo tho tobacco imported from outside bad no« been subl«tetl to lhe tu
and therefore the tu wu noC l!lithin the saviiis provisipna ot Ad. 304 <•>
ol the Comtitlllioa.
SUPREME COURT REPORTS
1964
(iv) The tax which had already been paid was so paid under a mistake
--
within s. 72 of the Indian Contract Act.
The High Courts have power
State po!uiMhdhya for the purpose of enforcement of fundamental rights and statutory rights
"·v, ei
to grant consequential reliefs by or'dering repayment of money realised by
Bhailol Bhai.
the Governn1ent without the authority of law.
Firm Mehtab Majid & Co. Y. State of Madras, A.I.R. 1963 S.C. 921
and Sale& Tax Officer, Banaras v. Kanhaiya Lal Saraf, [1963] S.C.R. 1360,
referred to.
( v) A~ a general rule if there has been unreason~ble delay the coutt
ought n9t ordinarily to lend its aid to a party by the extraordinary
remedy of manrlamuJ. Even if there is not such delay, in cues where th.e
opposite party raises a prima facie issue as regards the availability of such
relief on the merits on grounds like limitation the Court should ordinarily
refuse to issue the writ of mandamus.
(vi) Though the provisions of the Limitation Act do not as such
.&pply to the grantin& of relief under Art. 226 the maximum period fixed I
by the legish•_ture as the time within which relief by a suit in a Civil Court
must be claimed 1nay ordinarily be taken to be a reasonable standard by
.wh~:;h delay in seeking remedy under Art. 226 can be
measured. The
Court may consider the delay unreasonable
even if it is less than the
period of limitation prescribed for a civil action for the remedy. Where
the delay is more than this period it will almost always be proper for
the court to bold that it is unreasonable.
The period of limitation
prescribed for recovery of money paid by mistake under the Limitation
Act is three yeaN from the date when the mistake is known. In the
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