BENGAL IMMUNITY COMPANY LIMITED Vs. STATE OF BIHAR

JUDGEMENT

(1.) 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 company 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 not lawfully leviable on the petitioners" and for other ancillary reliefs.

(2.) The relevant facts appearing from the petition filed in support of the appellant company's aforesaid application are as follows : The appellant company is an incorporated company carrying on the business of manufacturing and selling various sera, vaccines, biological products and medicines. Its registered head office is at Calcutta and its laboratory and factory are at Baranagar in the district of 24 - Perganas in West Bengal. 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. The goods are despatched from Calcutta by rail, steamer or air against orders accepted by the appellant company in Calcutta. The appellant company has neither any agent or manager in Bihar nor any office, godown or laboratory in that State. On the 24th October, 1951 the Assistant Superintendent of Commercial Taxes, Bihar wrote a letter to the appellant company which concluded as follows :-

(3.) On the 18th December, 1951 a notice was issued by the Superintendent, Commercial Taxes, Central Circle Bihar, Patna calling upon the appellant company (i) to apply for registration and (ii) to submit returns showing its turnover for the period commencing from the 26th January, 1950 and ending with the 30th September, 1951. This notice was issued under section 13(5) of the Bihar Sales Tax Act, 1947 (hereinafter called the Act) read with rule 28. It was drawn up according to Form No. 8 prescribed by the rules and was headed "Notice of hearing under section 13(5)'. The reason for issuing this notice, as recited therein, was that on information which had come to his possession the Superintendent was satisfied that the appellant company was liable to pay tax but had nevertheless wilfully failed to apply for registration under the Act. Thereafter there was some correspondence between the appellant company and the Bihar Sales Tax authorities to which it is not necessary to refer in detail. Suffice it to say that while the appellant company denied its liability on the ground, inter alia, that it was not resident in Bihar, it carried on no business there, none of its sales took place in Bihar and that it did not collect 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 President's 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 consumption in that State were liable to Bihar Sales Tax. Eventually on the 29th May, 1952 the Assistant Superintendent of Sales Tax, Bihar called upon the appellant company to comply with the notice by the 14th June, 1952 and threatened that, in default of compliance, he would proceed to take steps for assessment to the best of his judgment. The appellant company by its letter dated the 7th June, 1952 characterised the notice 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 company presented before the High Court at Patna a petition under article 226 claiming the reliefs hereinbefore mentioned. The respondents did not file any affidavit in opposition controverting any of the allegations of facts made in the petition and it must, accordingly, be taken that those facts are admitted as correct by the respondents. 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. Hence the present appeal.