MADAN GOPAL Vs. COLLECTOR CHURU

JUDGEMENT

(1.) THIS is a writ application by one Madangopal and three others under Art. 226 of the Constitution of India.

(2.) THE petitioners' case is, that the Central Government having imposed control on cloth, the Rajasthan Government appointed Messrs. Madan & Co. of Sujangarh in the year 1950 as its agent for purchasing the quota of cloth for Churu District from supply centres outside the State, that is, for importing it in the said district and distributing it throughout the district to retail dealers in accordance with the instructions of the Government. THE said company was known as importer-cum-wholesale dealer. THE said company therefore, as agent of the Rajasthan Government, purchased cloth from different supply-centres outside Rajasthan, according to the instructions of the Collector, Churu, and sold it to persons specified by the Collector at the rates fixed by the Government after adding the taxes which it had actually paid. Its only interest in the transaction was to receive percentage of the commission which was below five percent on the ex-factory price. Madan & Co. was a partnership firm and petitioner No. 1 Madangopal was its partner. It is stated that petitioners Nos. 2 and 3 were not partners during the relevant period and that petitioner No. 4 Girdharilal joined the firm after 31st March, 1951. It may be noted here that the relevant period, according to the petitioners, was between January, 1950 to 31st March, 1951. THE petitioners proceed to say that during the said period the said agent of the Government of Rajasthan, i. e. Messrs. Madan & Co. purchased cloth in the Bombay State from certain supply centres and paid sales-tax to the suppliers. THE said tax was charged under the Bombay Sales Tax Act. THE amount of sales-tax so paid by the said company to the sellers in the Bombay State was passed on to the retail dealers of the cloth who used to purchase it from the company under permits. THE retailers, in their turn, passed on the sales-tax to the consumers by adding it to the control price. Thus, the sales-tax recovered by the Bombay Government from the manufacturers in that State was actually passed on to the consumers within the limits of Churu District. In the State of Bombay Vs. THE United Motors (India) Ltd. (1), their lordships of the Supreme Court restrained the State of Bombay from imposing or authorising the imposition of tax on sales and purchases which were exempted from taxation by Art. 286 of the Constitution of India. THEreafter, the Government of Rajasthan thought of claiming refund of the sales-tax realised by the Government of Bombay on the cloth imported into Rajasthan from the State of Bombay. Ms. Madan and Company was called upon to supply full data of the amount of sales-tax for which the refund could be claimed. On 4th April, 1954, the required information was supplied to the Collector with a letter marked Ex. C together with a statement marked Ex. D. According to the statement Ex D, it was shown that an amount of Rs. 6864/2/3 was paid as sales-tax by Madan and Company. THE petitioners' grievance is that instead of compelling the State of Bombay to refund the Sales-Tax the Sub-Divisional Officer, Ratangarh, issued a certificate of public demand under sec. 4 of the Rajasthan Public Demands Recovery Act for an amount of Rs. 10739/1/3 without showing how this figure was arrived at.