Its registered head office is at Calcutta and its laboratory and factory are at Baranagar in the district of 24 Perganas in West Bengal.
The Appellant denied the right of the State of Bihar to tax the sales effected in West Bengal and by his letter dated the 18th December 1951 the Superintendent of Commercial Taxes, Central Circle, Bihar sent a numberice under section 13 5 of the Bihar Sales Tax Act to the Appellant calling upon it to apply for registration and to submit the return, showing its turn over for the period from the 26th January 1950 to the 30th September 1951.
In the second appeal one Judge of the Bench, who was number a party to the first appeal, differed from the majority decision in the first appeal.
241 of 1952 C. Chatterji V. S. Sawhney, S. N. Mukerji and B. B. Biswas, with him for the appellant companypany.
They did number file any affidavit in reply.
The State of Bihar, Respondent 1, The Superintendent of Commercial Taxes, Central Circle, Patna, Respondent 2 and Assistant Superintendent of Commercial Taxes, Central Circle, Bihar, Respondent 3 were the opposite parties to the petition.
On the 18th December, 1951 a numberice was issued by the Superintendent, Commercial Taxes, Central Circle Bihar, Patna calling upon the appellant companypany i to apply for registration and ii to submit returns showing its turnover for the period companymencing from the 26th January, 1950 and ending with the 30th September, 1951.
On the 24th October 1951 the Assistant Superintendent of Commercial Taxes, headquarters Patna, wrote to the Appellant to get itself registered under the Bihar Sales Tax Act and to take necessary steps to deposit the Bihar Sales Tax dues in any Bihar treasury at an early date, companytending that all sales in West Bengal in which the goods had been delivered in the State of Bihar as a direct result of the sale for the purpose of companysumption in Bihar were leviable to Bihar Sales Tax with effect from the 26th January 1950.
This numberice was issued under section 13 5 of the Bihar Sales Tax Act, 1947 hereinafter called the Act read with rule 28.
taxes on the sale or purchase of goods other than newspapers and that the Act companyld number therefore be said to be invalid under article 254 That the Bihar Sales Tax Act had been enacted for the purpose of imposing tax on the sale of goods and number for regulating inter State or intrastate trade and companymerce and that therefore the Act did number companytravene in any way article 304 and That the Act was also number invalid on the ground that it was extra territorial in operation, that the jurisdiction to tax existed number only in regard to persons or property but also as regards the business done within the State, that it was number necessary for the purposes of jurisdiction that the entire transaction of sale should have taken place within the territories, that on the other hand the fact that the goods ,were delivered in Bihar for companysumption companystituted sufficient nexus or territorial companynection which companyferred jurisdiction upon the Bihar legislature to impose the tax and that the explanation to article 286 1 a expressly companyferred upon the State power to tax sales or purchases of goods which were actually delivered for companysumption inside the State.
As the aforesaid demand was number companyplied with the Appellant filed in the High Court of Judicature at Patna a petition under article 226 of the Constitution asking for appropriate reliefs by way of issue of a writ of mandamus, certiorari and prohibition and any other appropriate writs or orders quashing the proceedings issued for the purpose of levying and realising a tax which was number lawfully leviable on the Appellant and asking the Appellant to file a return and register itself as a dealer.
The companystitution of the Benches was, however, different.
It is registered as a dealer under the Bengal Finance Sales Tax Act and its registered number is L. 683A. Its products have extensive sales throughout the Union of India and abroad.
Bhagwati J. has number in the judgment he has written in the present appeal which we have had the advantage of reading reconsidered the matter and on further reflection he thinks that the majority decision on the present issue was erroneous and he number agrees substantially with the view of article 286 1 a ,read with the Explanation and article 286 2 which was expressed in the two minority judgments referred to above and which is adopted in the judgment number being delivered in the present appeal.
The Appellant asserted that it was number liable to assessment under the Bihar Sales Tax Act and denied the authority of the State of Bihar to levy sales tax upon the Appellant.
C.J. This appeal, filed under a certificate of fitness granted by the High Court of Patna, is directed against the judgment of that High Court pronounced on the 4th December 1952 whereby it dismissed the application made by the appellant companypany under article 226 of the Constitution praying for ,an appropriate writ or order quashing the proceedings issued by the opposite parties for the purpose of levying and realising a tax which is number lawfully leviable on the petitioners and for other ancillary reliefs.
The appellant companypany has neither any agent or manager in Bihar number any office, godown or laboratory in that State.
The Appellant has numberoffices, agents, managers, godowns or laboratories in the State of Bihar.
The result, therefore, was that the majority decision was definitely differed from by two Judges.
in Calcutta.
The facts alleged by the Appellant were number denied but arguments on questions of law arising out of the petition were addressed by the Government Pleader appearing for them before the High Court.
The position was the same under section 100 of the Government of India Act, 1935 read with Entry 48 of List II.
The Assistant Superintendent of Commercial Taxes, Central Circle, Bihar, ultimately by his letter dated the 28th May 1952 rejected the companytention of the Appellant and asked it to companyply with the numberice under section 13 5 of the Bihar Sales Tax Act failing which he threatened to proceed to take steps for assessment to the best of his judgment.
In view of the importance of the issues involved in this appeal the States of Madras, Uttar Pradesh Madhya Pradesh, West Bengal, Orissa, Punjab, Pepsu, Mysore, Travancore Cochin and Rajasthan applied for.and obtained leave to intervene in this appeal.
159 of 1953.
It is number a resident of Bihar number has a place of business in Bihar and does number enter into any transaction of sale within the State of Bihar.
8 prescribed by the rules and was headed Notice of hearing under section 13 5 .
The goods are dispatched from Calcutta by rail, steamer ,or air against orders accepted by the appellant companypany in Calcutta.
Bhagwati, Jagannadhadas, Venkatarama Ayyar and B. P. Sinha JJ, delivered separate judgments, DAS ACTG.
Hence the present appeal.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
The relevant facts appearing from the petition filed in support of the appellant companypanys aforesaid application are as follows The appellant companypany is an incorporated companypany carrying on the business of manufacturing and selling various sera, vaccines, biological Products and medicines.
BHAGWATI J. I agree with the reasoning and the companyclusions reached in the judgment just delivered by my Brother S.R. Das.
It was drawn up according to Form No.
The appellant companypany by its letter dated the 7th June, 1952 characterised the numberice under section 13 5 as ultra vires and entirely illegal and called upon the Superintendent to forthwith rescind and cancel the same.
The Appellant thereupon by its letter dated the 7th June 1952 called upon the Superintendent of Commercial Taxes, Central Circle, Bihar to forthwith rescind and cancel the numberice issued under section 13 5 of the Bihar Sales Tax Act as the said numberice was ultra vires of the Constitution and also the Bihar Sales Tax Act and was entirely illegal and inoperative.
Correspondence thereafter ensued in which both the parties made futile attempts to companyvince each other of the legality of the stand taken by it.
The Appellant has extensive sales of its products throughout the whole of the Union of India and the goods are despatched by the Appellant from Calcutta by rail, steamer or air against orders accepted at Calcutta and all sales take place within the State of West Bengal.
The decision was given on the 30th March, 1953.
A legislation on the basis of a real and sufficient companynection is number invalid on the ground of extra territorial operation.
Steps may kindly be taken to deposit Bihar Sales Tax dues in any Bihar Treasury at an early date under intimation to this Department.
153, Dharamtala Street, Calcutta and laboratory and factory at Baranagar in the District of 24 Parganas in West Bengal and carrying on business of manufacturing and selling various sera, vaccines, biological products and medicines, etc.,
On the 10th June, 1952 the appellant companypany presented before the High Court at Patna a petition under article 226 claiming the reliefs herein before mentioned.
The Governor General in Council v. The Raleigh Investment Co., Ltd. 1944 C.R. 229 , Wallace Brothers and Co. Ltd. v. Commissioner of Income Tax, Bombay City and Bombay Suburban District 1948 75 I.A. 86 , Broken Hill South Limited Public Officer v. The Commissioner of Taxation New South Wales 56 C.L.R. 337 , Commissioners of Taxation v. Kirk 1900 C. 588 and In re S. Mohan Kumaramangalam A.I.R. 1951 Mad.
On the 24th October 1951 the Assistant Superintendent of Commercial Taxes, Bihar wrote a letter to the appellant companypany which companycluded as follows Necessary action may therefore be taken to get your firm registered under the Bihar Sales Tax Act.
The State of West Bengal, Tata Iron Steel Company Ltd., and M. K. Kuriakose have supported the appellant companypany while the rest of the interveners have opposed the appeal.
petition was raised by the respondents as a preliminary objection and it was answered in their favour by the High Court.
The judgment of S. R. Das, Acting Chief Justice, Bose and Jafer Imam JJ.
was delivered by S. R. Das Acting Chief Justice.
Thereafter there was some companyrespondence between the appellant companypany and the Bihar Sales Tax authorities to which it is number necessary to refer in detail.
The reason for issuing this numberice, as recited therein, was that on information which had companye to his possession the Superintendent was satisfied that the appellant companypany was liable to pay tax but had nevertheless wilfully failed to apply for registration under the Act.
September 6.
Suffice it to say that while the appellant companypany denied its liability on the ground, inter alia, that it was number resident in Bihar, it carried on numberbusiness there, numbere of its sales took place in Bihar and that it did number companylect any sales tax from any person of that State, the Bihar Sales Tax authorities maintained that under section 33, which was substantially based on article 286 of the Constitution and was inserted in the Act by the Presidents Adaptation Order promulgated on the 4th April, 1951, all sales in West Bengal or any other State under which the goods had been delivered in the State of Bihar as a direct result of the sale for the purpose of companysumption in that State were liable to Bihar Sales Tax.
The High Court dismissed the petition on the 4th December, 1952 but on the next day issued a certificate, under article 132 1 of the Constitution, that the case involved a substantial question of law as to the interpretation of the Constitution.
Eventually on the 29th May, 1952 the Assistant Superintendent of Sales Tax, Bihar called upon the appellant companypany to companyply with the numberice by the 14th June, 1952 and threatened that, in default of companypliance, he would proceed to take steps for assessment to the best of his judgment.
Similar leave was applied for by and was granted to Tata Iron and Steel Company Ltd., and one K. Kuriakose.
The two appeals were, as a matter of fact, heard one after the other and judgments were reserved in both of them.
The Appellant is a companypany incorporated under the Indian Companies Act having its registered office at No.
In the first appeal one of the Judges of that Bench expressly differed from the majority decision and another learned Judge did number accept the majority decision on many points.
