TATA ENGINEERING AND LOCOMOTIVE COMPANY versus ASSISTANT COMMISSIONER OF COMMERCIAL TAXES & ANR.

Citation: [1967] 2 S.C.R. 751 · Decided: 24-02-1967 · Supreme Court of India · Bench: M. HIDAYATULLAH · Disposal: Appeal(s) allowed

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

Judgment (excerpt)

-
A 
TATA 
ENGINEERING AND LOCOMOTIVE 
COMPANY 
LTD. 
B 
c 
D 
E 
F 
G 
H 
v. 
ASSISTANT COMMISSIONER OF COMMERCIAL TAXES 
& ANR. 
February 24, 1967 
(M. HIDAYATULLAH, J. M. SHELAT AND G. K. MITTER, JJ.] 
Constitution of India, Art. 226-Princip/es 
for 
exercise 
of High 
CoHrt's polver under-Existence of alternative rentedies when not a bar. 
The appellant company manufactured trucks, bus cbasis etc. in Bihar 
State. 
Some of the goods so manufactured were sent to the stockyards 
maintained by the company in various State> outside Bihar. The goods 
in the said stockyards, according to the company, had not been appro~ 
priated to any contract and remained 
the property 
of the 
company. 
Therefore, in proceedings for the assessment 
of Sales Tax before 
the 
Assistant Commissioner of Commercial Taxes, Jamshedpur the comr ny 
contended that the sales effected from these 
stockyards were taxable 
neither under the Bihar Sales Tax Act., nor under the Central Sales Tax 
Act. 
Th~ contention was rejected by the Assistant 
Commissioner who 
demanded Rs. 1,73,84,273 as tax. 
The company thereupon filed a peti-
tion under Art. 226 of the Constitution questioning the jurisdiction of the 
Taxing Authority. 
The High Court 
refused 
to give 
relief 
because 
oadequate alternative rernedie" under the taxing statute were 
available 
and had not been exhausted and dismissed the petition in limine. 
By 
special leave the company appealed. 
HELD : The jurisdiction of the High Court under Art. 226 of the 
Constitution cannot bP. a substitute for the ordinary_ remedies 
at Jaw. 
Nor is its exercise desirable if facts have to be found on evidence. 
But 
there are exceptions. 
One such exception is when action is being taken 
under an invalid law or arbitrarily without the sanction of law. In such 
a case the High Court raay interfere to avoid hardship to a party which· 
will be unavoidable if the quick and mo·re efficacious remedy 
envisaged 
by the article were not allowed to be invoked. 
As the appeals required 
paxment of tax at least in part the High Court ought to have taken 
1unsdiction in this case at least to issue a rule nisi to see what the Assis .. 
tan! Commissioner had to say. (755 E-0, 756 C-D] 
Thansingh v. Supdt. of Taxes (1964] 6.S.C.R. 
654 and Himmat/al 
v. State of M.P. [1954] S.C.R. 1122, referred to. 
Clv1L APPELLATE JURISDICTION : Civil Appeal No. 1604 
of 1966. 
Appeal by special leave. from the judgment and order dated 
April 20, 1966 of the Patna High Court in C.W.J.C. No. 252 of 
1966.' 
N. A. Palkhiwala, S. P. Mehta, Ravinder Narain and 0. C. 
Mathur, for the appellant 
Niren De, Addi. Solicitor-General and U. P. Singh, for the 
respondents. 
751 
752 
SUPREME COURT REPORTS 
(196 7] 2 S.C.R. 
The Judgment of the Court was delivered by 
Hidayatullah, J 
The appellant is a public limited Company 
whid1 manufactures the well-known Tata Mercedes-Benz trucks, 
bus chassis, their spare parts and other accessories al Jamshcdpur 
in the State of Bihar and they arc sold to the Govcrr._ncnt of India, 
the State Governments, State Transport Corporations and others. 
In the course of its business the appellant Company sells its pro-
ducts, particularly the trucks and bus chassis, to dealers in various 
parts of India and the dealers resell them to consumers all over 
India. 
According to the appellant Company, its sales in the 
Indian market are of three kinds : 
(a) Sales inside Bihar State; 
( h) Sales in the course of inter-State trade and com-
merce; and 
(~) Sales effected from their stockyards located m 
States other than Bihar. 
The present appeal concerns sales in the last category and the 
question arises in the followin3 circumstances. 
The appellant Company tiled returns for the quarter ending 
on June 30, 1965, under the B1har Sales ·fox Act and the Central 
Sales Tax Act respectively. including in the former <a:cs to con-
sumers in Bihar State and m the latter sales in the course of inter-
Stale 1rade or commerce. and paid full tax due on such sales. 
The appellant Com!lany did not include sales from the stockyards, 
in any of its returns. 
On November 12, 1965 the Assist~nt Commission~r of Com-
mercial Taxes, Jamshedpur sent a notice (No. I 1234) inform-
ing li1e appellant Company that the returns appeared to bz in-
correct as all sales were not included and directed the appellant 
Company to include ail its sales in revised returns and all returns 
to be filed in future. The appellant Company demurred tha

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