LexTHE BENGAL IMMUNITY COMPANY LIMITED versus THE STATE OF BIHAR AND OTHERS.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
2 S.C.R. SUPREME COURT REPORTS 603 THE BENGAL IMMUNITY COMPANY LIMITED ''· THE ST ATE OF BIHAR AND OTHERS. (S. R. DAs, ACTING C.J., VIVIAN BosE, BHAGWATI, ]AGANNADHADAS, VENKATARAMA AYYAR, B. P. SINHA and JAFER IMAM JJ.] Constitution of India-Arts. 141, 226, 286(1), (2) and (3)-Art. 286(J)(a) read tvith the Explanation-Construction of-Whether controlled by Art. 286(2)-Situs of a sale or purchase determined by general law or created by fiction in the Explanation-Whether rele- vant fo1· ascertaining inter-State character of such sale or punhase- Appellant company registered in Calcutta-Bihar Sales Tax Act, 1947 (Bihar Act XIX of 1947)-S. 13-Whether appellant company liable to Sales Tax-Where goods deliveted in the State of Bihm· as a direct result of sale for purposes of consumption there-Art. 226-Petition thereunder-.\1.aintainability of-Supreme Court whether competent to modify or review its pri01· decisions-Art. 141-Meaning of-Bihar Sales Tax Act, 1947, s. 33-Taxing sales or purchases taking place in the course of inter-State trade-Validity of-Act whether wholly ultra vires and void. The appellant company, having its registered office in Calcutta and its factory and laboratory in the District of 24-Parganas in \Vest Bengal, carried on the business of manufacturing and selling sera, vaccines, biological products and medicines. It was registered as a dealer under the Bengal Finance (Sales Tax) Act. Its products haYing extensive sales throughout India and abroad were despatched from Calcutta against orders accepted by the appellant company in Calcutt'1. It had no agent or manager in Bihar nor any office or laboratory in that State. A notice under s. 13(5) of the Bihar Sales Tax Act, 1947 was issued by the Bihar Sales Tax authorities calling upon the appellar:t company to apply for registration and to submit returns showing its turn over for a period between the 26th of Janu- ary, 1950 and 30th September 1951. The appellant company denied its liability on the grounds, inter alia that it was not resident in Bihar, it carried on no business there and none of its sales took place in Hihar. It characterized the notice under s. 13(5) as ultra vires and illegal and called upon the Sales Tax authorities to cancel it forth- with. The Bihar Sales Tax authorities maintained that all sales in West Bengal or in any other State under which goods had been deli- vered in the State of Bihar as a direct result of the sale for the pur- poses of consumption in that State were liable to Bihar Sales Tax. Ultimately the appellant company presented before the High Court at Patna a petition under Art. 226 of the Constitution claiming the reliefs mention.:d above. The High Court dismissed the petition holding that it was not maintainable. On appeal under a certificate 1955 Septembw 6 1955 The &ngal lmmlllliJv Company limited v. Tire Stale of Bihar and others 604 SUPREME COURT REPORTS [1955} under Art. 132(1) of the Constitution:. - Held, (per curiam) (i) that the High Court was not right in hold- ing that the petition under Art. 226 was misconce,ived. In so hold- ing the High Court overlooked the fact that the petitioners' contention was that the Act, in so far as it. purported to tax a non-resident in respect of inter-State sales or purchases of goods was ultra vires the Constitution. There are various provisions in the Act laying down certain conditions, which dealers must comply with or submit to. They consti_tuted restrictions on the fundamental right guaranteed to every citizen of India by Art. 19(1) (g) of the Constitution and these onerous conditions could not be justified as reasonable restrictions within the meaning of clause (6) of Art. 19 and further the remedy under the Act cannot be said to be adequate and was indeed useless if the Act providing for such remedy was itself ultra vires and void : (ii) that there is nothing in the Constitution which prevent& the Supreme Court from departing fron1 a previous decision of its own if the court is satisfied of its error and its baneful effect on the general interests of the public. ~t..feld, per S. R. DAs, AcTr~c C. J., V1v1AN BosE, BHAGW.ATI and fAFER IMAM JJ. (JAGANNADHADAS, VENKATARAMA AvYAJ. and B. P. S1NHA JJ., Jisse,,ting) that the present is· a fit case for reviewing the previous majority decision of the Supre1ne Court in The State of Bombay v. The United Motors (India) Ltd. ([.1953) S.C.R. 1069)
Excerpt shown. Read the full judgment & AI analysis in Lexace.