TOBACCO MANUFACTURERS (INDIA) LTD. versus THE COMMISSIONER OF SALES-TAX, BIHAR, PATNA.

Citation: [1961] 2 S.C.R. 106 · Decided: 26-10-1960 · Supreme Court of India · Bench: S.K. DAS · Disposal: Dismissed

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

Judgment (excerpt)

106 
SUPREME COURT REPORTS 
[1961] 
'96° 
to the non-evacuees; and (2) the payment to the 
• 
Admunissa 
Custodian by the non-evacuees of the money value of 
~- Ott.m 
the share of the evacuees were not available to him. 
v. 
The former in this case was neither claimed nor could 
The Deputy Gus-the Custodian be expected to pay such a large sum of 
todian. Evacuee money to the non-evacuees. The order of the Compe-
Propedies. 
tent Officer of March 20, 1956, shows that the non-
Dis1ric1 Deoria 
h 
& Others 
evacuee co-s arers were not prepared to pay to the 
Custodian the money value of the shares of the eva-
Kap"' J. 
cuees. Of the remaining alternatives the third alterna-
tive was the partitioning of the property but that also 
was 
rn~t possible in the present case because of the 
nature of the composite property which comprised of 
a sugar mill which in the very nature of things could 
not be partitioned. Consequently the only a vai!able 
mode of separation was the one adopted by the 
Custodian, i.e., by sale of the property and division of 
the ~ale proceeds. In the circumstances the action of 
the Competent Officer could not be termed unreason-
able or violative of Art. 19(l)(f) nor does it violate 
Art. 31 because it cannot be said to be deprivation of 
the non-e.vacuees of their property without the autho-
October 26, 
rity of law. 
· 
In the result this petition fails and is dismissed with 
costs. 
Petition· dismissed. 
TOBACCO MANUFACTURERS (INDIA) LTD. 
v. 
THE COMMISSIONER OF SALES-TAX, 
BIHAR, PATNA. 
(S. K. DAS, M. HIDAYATULLAH, K. c. DAS GUPTA, 
J.C. SHAH and N. RAJAGOPALA AYYANGAR, JJ.) 
Sales Tax-Sale-Goods delivered outside State for consumption 
in the State of first delivery-Goods delivered for consumption in 
other States-Liability to tax-Constitution of India, Art. z86(r)(a) 
-Bihar Sales Tax Act. 
2 S.C.R. SUPREME COURT REPORT~ 
107 
The appellants who were manufacturers of cigarettes and 
196o 
tobacco in the Slate of Bihar contested the levy of sales-tax on 
sales effected bv them during the financial years 1949-50 and 
Tobacco 
1950-51 on the ground that as a direct result of every sale effec-
Alanufact1ners 
ted by them the goods concerned were delivered outside the 
(India) Ltd. 
State of Bihar and were, therefore, exempted from tax liability 
v. 
under Art. 286(r)(a) of the Constitution. Both the Superinten- He Commissioner 
dent of sales-tax and the DeP.uty Commissioner of sales-tax, 
of Sales-tax, 
Bihar, o,verruled the objection ot the appellants, and following 
Bihar, Patna 
a previous ruling of the Board of Reve,nue of Bengal in a case 
known as the Bengal Timber Case (61 of 1952) held the appellants 
liable to pay the tax. The appellants paid the tax demanded 
but filed an application in revision to the Board of Revenue, 
claiming a constitutional exemption from tax on every sale effec-
ted by them as a result of which goods were delivered outside 
the State of Bihar-whether the delivery was for consumption 
in the State of first delivery or not. 
The Board passed the 
following order on the revision petition. 
"As regards the admitted despatches of the goods outside 
the State after the 26th January, 1950, when the Constitution 
came into force, the learned lower court has been guided by the 
decision of the Board in the Bengal Timber Case (No. 61 of 1952). 
But this ruling of the Board stands superseded by the subse-
quent decision of the Supreme Court in the United Motors Case 
According to the decision of the Supreme Court, no tax could be 
levied on despatches to the places outside the state after the 
26th January, 1950, and on this point the petitions are allowed, 
and the sales tax officer directed to recalculate the amount of 
tax payable by the assessee ". 
The appellants taking the above order to he in their favour 
claimed refund of the tax already paid by them and the sales 
tax authorities c0ntested the position and claimed that they 
were bound to refund the tax only on those sales wherein the 
goods were delivered outside the State for consumption in the 
State of first delivery. The department thereafter sought clari-
fication of the above order. The Board refused to clarify or ex-
p!ain its order and passed an order saying that "no further cla-
rification was really required in view of the specific reference to 
the judgment of the Supreme Court in the United Motors Case ". 
Thereafter as the authorities still refused to refund the balance 
of the tax the appellants 

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