DAYABHAI GOKULBHAI PATEL Vs. STATE OF BIHAR

JUDGEMENT

(1.) THE petitioner carries on a business in tobacco and biri leaves in the district of Manbhum. For the assessment year 1952-53 there was a dispute between the petitioner and the Sales Tax Authorities as to the legality of the inclusion of the sum of Rs. 41,736 to the taxable turnover of the petitioner. The amount represented the central excise duty paid by the customers on account of goods purchased from the petitioner. It appears that the goods sold were nonduty paid goods and were in the bonded warehouse. It further appears that the customers paid the excise duty direct into the treasury, and after obtaining the challan showed it to the Collector of Excise who gave the necessary clearance permit. The petitioner issued cash memos to the customers in which he entered the actual cash price received by himself and not the amount of excise duty paid into the treasury by the customers. The petitioners contended before the Sales Tax Officer that the amount of Rs. 41,736 should not be included in the taxable turnover as the customers paid the money direct into the treasury and not to the petitioner. This contention was rejected by the Sales Tax Officer who included the amount in the taxable turnover. The action of the Sales Tax Officer was upheld by the Deputy Commissioner of Sales Tax on appeal. The petitioner took the matter in revision to the Board of Revenue, but the revision application was dismissed on 27th April, 1955. Thereafter the petitioner made an application to the Board of Revenue under section 25(1) of the Bihar Sales Tax Act for stating a case to the High Court on the question of law. On 13th February, 1956, the Board of Revenue rejected the application and refused to refer the question to the High Court. The petitioner did not apply to the High Court under section 25(2) of the Bihar Sales Tax Act against the order of the Board of Revenue refusing to make the reference. But on 16th January, 1957, the petitioner made the present application to the High Court for grant of a writ under Article 226 of the Constitution in the nature of mandamus directing the respondent, namely, the State of Bihar, to refund to the petitioner the sales tax realised on the aforesaid amount of Rs. 41,736. Cause has been shown by the Government pleader on behalf of the respondent, the State of Bihar, to whom notice of the rule was ordered to be given.

(2.) THE first question raised on behalf of the respondent is that the petitioner had an alternative remedy under section 25(2) of the Bihar Sales Tax Act; and since the petitioner did not avail himself of that remedy within the time granted by the statute, the petitioner ought not to be granted a writ in the nature of mandamus under Article 226 of the Constitution. Reference was made in this connection to section 25(1) and (2) of the Bihar Sales Tax Act which states :-

(3.) SECTION 25(1) provides for referring a question of law by the Board of Revenue to the High Court, and section 25(2) states that if the Board of Revenue refuses to make the reference the assessee may, within forty-five days of such refusal, apply to the High Court against such refusal. Section 25(3) of the Act states that if the High Court is not satisfied that such refusal was justified, it may require the Board of Revenue to state a case and refer it to the High Court. It is manifest, therefore, that an elaborate machinery has been created by the Bihar Sales Tax Act for the determination of the liability of the dealers to pay sales tax. A special code of procedure has been provided by the Legislature for ensuring correct assessment of tax. It is the machinery which is created by the statute which should normally be used for the purpose of assessment and all complaints of the dealers against the assessment ought to be adjudicated upon in accordance with the machinery provided by the statute. The normal method of challenging the assessment is, therefore, by way of appeal to the prescribed authorities under section 24 of the Bihar Sales Tax Act, by way of revision to the Board of Revenue under the same section and by stating a case to the High Court as prescribed by section 25 of the Act. A writ under Article 226 of the Constitution is an extraordinary remedy and may be used in proper cases where no other adequate legal remedy exists. But the provision of Article 226 of the Constitution is not meant to short circuit or to override the legal tribunals created by the elaborate machinery of the Bihar Sales Tax Act. The general principle applicable in a case of this description is stated in an English case, Allen v. Sharp ((1848) 2 Ex. 352), where Parke, B. said :