STATE OF MADRAS Vs. EFFICIENT PUBLICITIES PRIVATE LIMITED

JUDGEMENT

(1.) THE defendants in O.S. No. 6676 of 1968 on the file of the First Assistant Judge, City Civil Court, Madras, are the appellants. THE respondent was carrying on business in advertisement and publicity in Tamil Nadu. According to the plaint, in the course of such business, the respondent was getting blocks, slides, etc., made for its customers and passing them on to its customers. THE commercial tax authorities were making demands for tax on the cost involved in the preparation of blocks, etc. THE respondent had been resisting these demands on the ground that no sale was involved in the transactions and had taken up the matter on appeal before the Appellate Assistant Commissioner for Commercial Taxes but without avail.

(2.) THE appellants had compulsorily levied sales tax aggregating to Rs. 22, 218 for the years from 1961-62 to 1965-66. But a Bench of this Court has held on 8th Match, 1967, in W.P. Nos. 2465 to 2468, 2702 to 2708 and 2767 to 2770 of 1966 that the line of activities carried on by the respondent cannot be deemed to be sales. THE respondent thereafter requested the Deputy Commercial Tax Officer, II Division, Mount Road, Madras-2, for refund of the aforesaid sum of Rs. 22, 218 by its letter dated 10th November, 1967. THE demand has not been complied with. THE action of the appellants in levying the said tax has been declared to be illegal and void. THE appellants are, therefore, bound to refund the amount to the respondent. THE respondent filed the suit in these circumstances for the recovery of the said amount together with interest from the date of the suit.THE second appellant adopted the written statement of the first appellant. THE first appellant contended that the allegation that the respondent has been resisting the demands for sales tax on its transactions for the years 1961-62 to 1965-66 on the ground that no sales were involved in the transactions and that the authorities had not accepted the position is not correct. THE respondent did not put forth any case for the assessment year 1961-62. But for the year 1962-63 the respondent disputed only the tax of Rs. 371.30, which was levied on pre-sale expenses and the appeals was allowed by the Appellate Assistant Commissioner and effect was given to his order. Similarly, for the year 1963-64, the disputed turnover to the extent of Rs. 5, 064.00 and Rs. 71, 320.00 on the sale of slides and blocks supplied by the respondent was rejected by the Appellate Assistant Commissioner and the respondent did not take the matter further in appeal before the Appellate Tribunal or the High Court. For the years 1964-65 and 1965-66, the assessments were made on the book turnover of the respondent, who has not questioned the assessment before either the appellate authorities or the revisional authorities.

(3.) THE Division Bench of the Bombay High Court agreed with the view of the learned trial Judge and dismissed the appeal. Further appeal was taken to the Supreme Court after obtaining a certificate from the High Court. THE Supreme Court has observed in its decision :"THEre is no doubt that a claim for the refund of sales tax alleged to have been paid by the appellants through mistake is a claim of a civil nature and normally it should be triable by the ordinary courts of competent jurisdiction as provided by section 9 of the Code but this section itself lays down that the jurisdiction of the civil courts to try suits of a civil nature can be excluded either expressly or impliedly and so, the point raised for our decision in the present appeal is whether on a fair and reasonable construction of section 20, it can be said that the jurisdiction of the civil court is barred either expressly or impliedly .........This question has been recently considered by this Court in Firm of Illuri Subbayya Chetty & Sons v. State of Andhra Pradesh. Dealing with section 18-A of the Madras General Sales Tax Act (Act 9 of 1939), which corresponds to section 20 with which we are concerned in the present appeal, this court observed that the expression 'any assessment made under this Act' is wide enough to cover all assessments made by the appropriate authorities under this Act whether the said assessments are correct or not. It is the activity of the assessing officer acting as such officer which is intended to be protected and as soon as it is shown that exercising his jurisdiction and authority under this Act, an assessing officer has made an order of assessment, that clearly falls within the scope of section 18-A. It was also observed that whether or not an assessment has been made under this Act, will not depend on the correctness or accuracy of the order passed by the assessing authority .........It would be noticed that Mr. Sastri's argument that the impugned order of assessment is without jurisdiction and, as such, does not fall within section 20, proceeds on the assumption that the finding of the appropriate authority that the transactions in question were taxable under the relevant provisions of the Act, is a finding on a fact which is collateral. THE question is : is this assumption well-founded ? In our opinion, the answer to this question must be in the negative .......