MATHEW Vs. THIRD MEMBER, BOARD OF REVENUE

JUDGEMENT

(1.) THIS petition has been referred to a Division Bench,because the point raised thereby been felt to be of fair importance.It has arisen because the petitioner seeks to prohibit the respondents,who are the Member,Board of Revenue,the District Collector,Trivandrum,and the Tahstidar,Trivandrum,from taking coercive steps to realise the remaining amount of the sales -tax levied on the petitioner,even though such tax had been earlier held legal by the High Court.For deciding the point,It becomes necessary to narrate the earlier history of the litigation,with which this order should begin. The petitioner is a dealer in tobacco and had been purchasing the commodity first from Messrs.Veerappa Rudrappa Kothiwala,Nippani,secondly from Mottibhai Vallabahai Patel and Co .,Barodai and thirdly from the Imperial Tobacco Co,Coimbatore.The case is that sellers used to deliver the goods in Trivandrum under the authority of the transport permit from the Excise Depart­ment in the sellers ™ name,and the goods or dered were by rail booked either at Trichy or at Coimbatore railway stations,the consignor and the consignee being identical.The case further is that as soon as the payment be received at Coimbatore,the Imperial Tobacco Company would release the railway receipts with the endorsement of delivery to the petitioner and the railway receipts were posted to the petitioner.On the aforesaid averments,it is claimed that the ownership in the goods passed only at Trivandrum,where the postman delivered the endorsed receipts.On September 22,1953,the Sales Tax Officer made two best judgment assessments,the first being for the period from January 1 to March 31,1952,and thereby Rs.13,125 was assessed as the sales -tax on the turnover of Rs.1,20,000.The affidavit accompanying the petition before us,states that out of the aforesaid amount,Rs.10,931 -11 -3 had been already remitted.The second assessment is with regard to the period beginning from April 1,1952 to March 31,1953 and thereby Rs.68,250 been levied as the tax on the turnover of Rs.6,24,000.The affidavit accompanying the writ petition before us,again states that Rs.59,567 has been remitted towards the latter sales -tax.The petitioner contended that he was not liable for the single point tax under section 3,sub -section(2)of the Travancore -Cochin General Sales Tax Act,1125,read with rule 6 of the General Sales Tax Rules,because the rule provided for the tax under the sub -section to be on sales of items therein mentioned by the person,who in the State be the first dealer,and the petitioner being only the second dealer,was liable only to the sales -tax at the rate of 3 pies in the rupee.The taxing authority rejected the petitioner ™ s aforesaid case,and consequently O.P.360 of 1955 was file d in the Travancore -Cochin High Court,where it was admitted that if the sales by the company to the petitioner be not taxable he would be bound to pay the tax as the first dealer.In the petition the learned Judges held that railway receipt being mercantile document transfer of title in the goods by mere endorsement would be possible,and the presumption was of there having been transfer in favour of the endorsee.They further held that there was nothing in the case to rebut that presumption,the dealer had become the owner of the goods as and when the railway receipts were endorsed in his favour at Coimbatore and posted to his address at Trivandrum.They also found that section 26 of the General Sales Tax Act had not amplified any of the provisions of the Act,and what was not taxable prior to the insertion of that section did not become taxable thereafter.Consistently with the afore­said conclusions,they held that the petitioner before us was liable to pay the sales -tax under section 3(2)of the Act read with rule 6 of the rules [vide Mathew v. First Member , Board of Revenue 8 S.T.C.854].There was no appeal against the decision to the Supreme Court,but in Sundararamaier and Co - v.State of Andhra Pradesh 9 S.T.C.298,the view of the law taken in the above case was dissented from,and dissent is expressed in the following words: - For the reasons already given,we are unable to agree with the decisions in Mathew v. Travancore -Cochin Board of Revenue 8 S.T.C.854 ¦ ;.We accordingly hold th at section 22 operated to imposes tax falling within the Explanation,subject to authorisation by Parliament as provided in Article 286 9 S.T.C.298. The petitioner,after the aforesaid pronouncement and in view of the observations quoted above,filed the writ peti­tion now before us,and the case is that the levy of sales tax is not according to law,that no money can now be collected,and the efforts of collecting the tax are against the guarantee under Article 265.Because of this issue the case has been referred to a Division Bench. We feel considerable difficulty in accepting the arguments;for certain consequences follow from the objections against the assessments being made justiciable by the High Court,one result being that the adjudication on the dispute would be according to the rules generally observed by us when discharging judicial functions.It follows that the rule of res judicata would apply to these proceedings as well,and the earlier decision that had settled the disputes inter partes would preclude petitioner ™ s again agitating the issue.Nor the position is improved by that decision being held in another case to be incorrect,because such a decision in ordinary litigations would not reopen the issue already settled.Such are the inevitable consequences of the controversy,being justiciable by courts,where there be no legislative exclusion of the rule of the earlier adjudication without any appeal or review becoming final,and the courts being allowed to decide it subject to their own rules.That proposition when reco­gnised results in the controversy between the parties before us,having been once closed,not becoming again open,because of the later variation of the rule in another.We are fortified in this decision by the following passage in Cooley's ˜Constitutional Limitations &rsquo ;:[ Seventh Edi­tion,Pages 81 -82 ] Whatever the question involved -whether the interpretation of a private contract,the legality of an individual act,or the validity of a legislative enactment, - the rul e of finality is the same.The controversy has been adjudged;and,once finally passed upon,it is never to be renewed,it must frequently happen,therefore,that a question of constitutional law will be decided in a private litigation,and the parties to the controversy,and all others subsequently acquiring rights under them,in the subject -matter of the suit,will thereby become absolutely and for ever precluded from renewing the question in respect to the matter then involved.The rule of conclusi­veness to this extent is one of the most inflexible principles of the law;insomach that even if it were subsequently held by the courts that the decision in the particular case was erroneous,such holding would not authorise the reopening of the old controversy in order that the final conclusion might be applied thereto. In other words,judicial pronouncements have no retroactive operation and a settlement of the disputes on the legality of an assessment is not reopened,because of the pronoun­cement being held in another case to be incorrect.The petitioner ™ s learned advocate has relied on Rayalaseema Constructions v. Deputy Commercial Tax Officer 10 S.T.C.345 where the words levy and collection of taxes in Article 265 of the Constitution w ere held comprehensive enough to include the final taking away of the money from the citizen as well,and the learned advocate has urged that inasmuch as the last stages of that taking away are after a pronounce­ment against the legality,the taking would be violative of the guarantee contained in Article 265.The case has been followed in The Aluminium Industries Ltd .,Kundara v. The Agricultural Income Tax and Rural Sales Tax Officer I.L.R.1961(2)Kerala 577 wherein a Division Bench,of which one of us was a party,has held that absence of plea against the constitutionality of the levy before the assessing authority,would not be fatal to the subsequent claim before the same authority,where the person raising the objection be claiming that the earlier omission was due to a mistake of claimant ™ s constitutional right.We do not think either of the cases helps the petitioner,or to be contrary to the view,which we are taking in this petition,and so far as the case of Aluminium Co.™s is concerned no q uestion of res judicata arose,because there was no court ™ s decision against the dealer,and it is well settled that the claim for the refund would be entertainable on ground of mistake.Nor do we see how the petitioner can take advantage of the Madras C ase 10 S.T.C.345 where also there was no judicial decision against the dealer,or of Article 265.For the point between the taxing authority and the petitioner in this case,is settled that the sales tax in question are legal;and if the tax be legal,it would necessarily attract all the legal authorisations to realise the tax.The collection,there­fore,in this case would not be one not authorised by the law,because of an earlier decision,and Article 265 cannot be invoked.In these circumstances,we see no force in this petition,which is dismissed with costs,counsel ™ s fee Rs.100.