1955 2 SCR 603 The Judgment was delivered by Honble Justice S. R. Das, Honble Justice Bhagwati, Honble Justice Jagannath Das, Honble Justice Venkatarama Ayyar And Honble Justice B. P. Sinha The judgment of S. R. Das, Bose and Jafer Imam JJ.
Similar leave was applied for by and was granted to Tata Iron and Steel Company Ltd., and one M. K. Kuriakose.
It was drawn up according to Form No.
Correspondence thereafter ensued in which both the parties made futile attempts to companyvince each other of the legality of the stand taken by it.
They did number file any affidavit in reply.
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.
and obtained leave to intervene in this appeal.
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.
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.
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.
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.
petition was raised by the respondents as a preliminary objection and it was answered in their favour by the High Court.
8 prescribed by the rules and was headed Notice of hearing under section 13 5 .
Hence the present appeal.
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 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.
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 goods are dispatched from Calcutta by rail, steamer or air against orders accepted by the appellant companypany in Calcutta.
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 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.
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.
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.
BHAGWATI J. I agree with the reasoning and the companyclusions reached in the judgment just delivered by my Brother S.R. Das.
the petition with companyts.
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.
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.
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.
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.
was delivered by S. R. Das Acting Chief Justice.
Bhagwati, Jagannadhadas, Venkatarama Ayyar and B. Sinha JJ, delivered separate judgments, DAS ACTG.
It is registered as a dealer under the Bengal Finance Sales Tax Act and its registered number is S. L. 683A. Its products have extensive sales throughout the Union of India and abroad.
Steps may kindly be taken to deposit Bihar Sales Tax dues in any Bihar Treasury at an early date under intimation to this Department.
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.
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.
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.
The appellant companypany has neither any agent or manager in Bihar number any office, godown or laboratory in that State.
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 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.
Its registered head office is at Calcutta and its laboratory and factory are at Baranagar in the district of 24 Perganas in West Bengal.
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.
The Appellant applied for leave to appeal to this Court and the High Court granted the requisite certificate under article 132 1 of the Constitution.
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.
This numberice was issued under section 13 5 of the Bihar Sales Tax Act, 1947 hereinafter called the Act read with rule 28.
