1. This is a petition brought by firm Dharam Chand-Kishore Chand of New Delhi asking for an appropriate writ against the State of the Punjab and the Excise and Taxation Commissioner, Jullundur, for quashing the order passed' by the latter dated the 5th December 1951 and for the issue of a writ of prohibition against the respondents not to proceed with the realization of the sales tax from the petitioners.
2. The allegations of the petitioners are that they entered into a contract for the supply of firewood to the Royal Indian Army Service Corps on the 19th of March 1949. This supply was to be made for one year from the 1st of April 1949 to the 31st of March 1950. During the period of their contract, the East Punjab Sales Tax Act was in force. The petitioners applied to the assessing authority, the Excise and Taxation Officer, Ambala, that they were not liable to. payment of sales tax but this application was refused. They then applied to the Taxation Officer to move the Excise and Taxation Commissioner under Section 18 of the Act to determine this question but he refused and they consequently made an application on the 25th August 1951. The petition was admitted by Mr. Harivansh Lal Khanna who was then the Taxation Commissioner, but the matter came up before Mr. Varma who succeeded Mr. Khanna on the former's retirement. Mr. Varma, it is alleged, without giving any opportunityto the petitioners dismissed their petition and this is enclosure E. This order was in the form of a memorandum and stated as follows: 'Memorandum.
The transactions alluded to by you in the application are NOT covered by the proviso to Sub-Section (1) of Section 4 of the Punjab General Sales Tax Act, 1948 and they are, therefore, taxable under the said Act.' The petitioners submit that there is no other appropriate remedy available to them and they ask for a writ of 'certiorari' against the respondents.
3. It is necessary to refer to certain provisions of the Act for the determination of the matter in controversy. The Act received the assent of the Governor on the 15th November 1948 and it is Act No. XLVI of 1948. It was published in the Government Gazette on the 20th November 1948. It was to come into force as from the 1st of May 1949.
4. The relevant provisions of the Act are: '2(c) 'contract' means any agreement for carrying out for cash or deferred payment or other valuable consideration--(i) the construction, fitting out, improvement or repair of any building, road, bridge or other immovable property; or (ii) the installation or repair of any machinery affixed to a building or other immovable property; or (iii) the overhaul or repair of any motorvehicle.'
'2(e) 'goods' means all kinds of movable property other than actionable claims, stocks, shares or securities, and includes all materials, articles & commodities, whether or not to be used in the construction, fitting out, improvement or repair of immovable property.'
'4(1) Subject to the provisions of Ss. 5 and 6, every dealer 'except one dealing exclusively in goods declared tax-free under Section 6' whose gross turnover during the year immediately preceding the commencement of this Act exceeded the taxable quantum shall be liable to pay tax under this Act on all sales effected after the coming into force of this Act:
Provided that the tax shall not be payable on sales involved in the execution of a contract which is shown to the satisfaction of the assessing authority to have been entered into before the commencement of this Act.' '5(2) In this Act, the expression 'taxable turnover' means that part of a dealer's gross turnover during any period which remains after deducting therefrom (a) his turnover during that period on: (iii) sales to any railway or water transport administration and to the Ministry of Industry and Supply of the Government of India.' This provision was added by Act 35 of 1949 which was published in the Gazette on the 9th November 1949 and therefore it was not in the original Act. Section 10 deals with the payment of tax and returns. Section 11 is the assessment section. Section 12 deals with refunds. Section 18 deals with the power of the Commissioner to determine disputes and is as follows:
'18. If any question arises (otherwise than in a proceeding before a Court) whether or not for the purposes of this Act:
(b) any transaction is a sale or contract, of
(d) any tax is payable in respect of anyparticular sale or contract, the Commissionershall determine such question:
Provided that any such determination shall not affect the liability of any dealer under this Act in respect of any contract entered into or sale effected prior to such determination unless the Commissioner is satisfied that the dealer has been wilfully evading or attempting to evade payment of tax in respect of any sale of, or contract for supply of, any goods to which such determination relates.' Section 19 excludes the jurisdiction of the Civil Court to go into the matter of taxation. Section 20 provides for an appeal against assessments but no appeal is entertainable unless the amount of tax is paid in the first instance. Section 21 is a section providing for revision and is as follows:
'Section 21 (1). The Commissioner may, of his own motion or on application made to him. call for the record of any proceedings, which are pending before or have been disposed of by any assessing or appellate authority appointed under this Act, for the purpose of satisfying himself as to the legality or priority of such proceedings or of any order made therein and may pass such orders in relation thereto as he may think fit.
(2) The Provincial Government may, by notification, confer upon any officer the powers of the Commissioner under Sub-section (1), to be exercised subject to such conditions and in respect of such areas as may be specified in the notification.
(3) The Financial Commissioner may, at any time, call for the record of any case decided under the preceding Sub-sections and if, in his opinion, the final order contains an erroneous decision on an important question of law, he may pass such order on the case as he may think fit.
(4) No order shall be made under thissection which adversely affects the rights ofan assessee or other person upon whom anobligation is imposed by or under this Act,without giving such assessee or other persona reasonable opportunity of being heard.'
Under Section 22, provision is made for thestatement of the case to the High Court andpower is given to the High Court to issue amandamus in case the Financial Commissionerrefuses to make a reference and the variousprovisions of this Section (22) prescribe theprocedure to be followed in the High Court.
5. The case which Mr. Sibal has put forward is that he was not given an opportunity to be heard when he applied under Section 18. That may be so but it was open to him to go in revision to the Financial Commissioner and if he was not satisfied with the decision of the Financial Commissioner he could have had the case stated under Section 22 of the Act. In cases such as these, it has been held that an application for writ so as to short-circuit the procedure provided by the Act is not allowable. It was held by a Division Bench of this Court in -- U. C. Rekhi v. The Income-tax Officer', 52 PLR 267, in circumstances almost similar to the ones which exist in the present case that the High Court will not interfere under Art. 226. Reliance there was placed on a judgment of their Lordships of the Privy Council in - 'Basant v. Advocate-General of Madras', ILR 43 Mad 146 (PC), where Lord Phillimore observed:
'Certiorari according to the English rule is only to be granted where no other suitable remedy exists.'
As I have said before a more appropriate remedy is provided for by the Act itself but the petitioners have not availed themselves of it. In a case under the Income Tax Act where similar provisions for appeal and reference to the High Court exist, their Lordships of the Privy Council in -- 'Raleigh Investment Co. Ltd. v. The Governor General in Council AIR 1947 PC 78 observed:
'The scheme of the Act is to set up a particular machinery by the use of which alone total income assessable for income-tax is to be ascertained. The income-tax exigible is determined by reference to the total income so ascertained and only by reference to such total income. Under the Act (Section 45) there arises a duty to pay the amount of tax demanded on the basis of that assessment of total income. Jurisdiction to question the assessment otherwise than by use of the machinery expressly provided by the Act would appear to be inconsistent with the statutory obligation to pay arising by virtue of the assessment. The only doubt. indeed, in their Lordships' mind, is whether an express provision was necessary in order to exclude jurisdiction in a civil Court to set aside or modify an assessment.' Their Lordships also said: 'For, if the assessment is determined to be right in law the jurisdiction of the civil Court to entertain the suit is excluded. The assessment is on the appellant's construction made under the Act. If, on the other hand, the assessment is determined to be wrong. the jurisdiction of the civil Court to entertain the suit arises. The result of an enquiry into the merits of the assessment is, on the appellant's construction, to determine whether jurisdiction existed to embark on the inquiry at all. Jurisdiction is made to depend not on subject-matter but on the correctness of the suitor's contention as respects subject-matter. The language of the section is inapt to justify any such capricious method of determining jurisdiction.'
6. In -- 'Secretary of State for India v. Mask and Co.', ILR 1940 Mad 599 (PC), their Lordships of the Privy Council held that the jurisdiction of Civil Courts is excluded where the matter is decided under the Sea Customs Act.
7. Applying these cases, I am of the opinion that no case has been made out for interference by this Court under Article 226. I would therefore dismiss this petition and discharge the rule with costs. Counsel's fee Rs. 100/-.
8. I agree. Rule discharged.