KAMALA MILLS LIMITED Vs. STATE OF BOMBAY

JUDGEMENT

(1.) The principal point of law which arises in this appeal is whether the Bombay High Court was right in holding that the suit filed by the appellant, Kamala Mills Ltd., against the respondent, the State of Bombay, was incompetent. The appellant is a Limited Company and owns a textile mill at Bombay. It carries on business of manufacture and sale of textiles cloth. During the period 26th January, 1950 to 31st March, 1951, the appellant was registered as a "Dealer" under the provisions of the Bombay Sales Tax Act, 1946 (No. V of 1946) (hereinafter called 'the Act'). The appellant's case is that during the said period, it sold goods inside and outside the then State of Bombay. The total value of goods sold by the appellant outside the State of Bombay was Rs. 40,20,623-12-0 and Rs. 1,08,946-14-0. On the said sales of Rs. 40,20,623-12-0 General Sales Tax of Rs. 61,885-12-0 was levied, whereas on the sales of Rs.1,08,946-14-0 Special Sales Tax of Rs. 3,301-8-0 was levied. The total Sales Tax thus levied against the appellant in respect of the outside sales during the relevant period was Rs. 65,187-44.

(2.) On December 20, 1956, the appellant instituted the present suit (No. 402 of 1956) on the Original Side of the Bombay High Court, and claimed to recover the said amount from the respondent on the ground that it had been illegally levied against it. According to the appellant, the illegality of the impugned assessment, levy, imposition and collection was discovered by it soon after this Court pronounced its judgment in Bengal Immunity Co. Ltd. v. State of Bihar, 1955-2 SCR 603 : (S) AIR 1955 SC 661 on the 6th September, 1955. The appellant's case further was that S. 20 if the Act did not bar the institution of the present suit; and, in the alternative, if it was held that it created a bar, the said section was ultra vires the Constitution of India and void.

(3.) The claim thus made by the appellant was resisted by the respondent on several grounds. One of the pleas raised by the respondent was that the Court had no jurisdiction to entertain the suit. It was urged by the respondent that S. 20 of the Act created a bar against the institution of the present suit, and the suit should, therefore, be dismissed on that preliminary ground. The respondent also contended that the plea raised by the appellant that the said section was ultra vires the Constitution was without any substance on the merits, the respondent pleaded that the appellant was not justified in claiming a refund of the amount of tax recovered from it for the sale transactions in question.