1. These appeals have been filed with certificates granted by the High Courtof Assam under Art. 132 of the Constitution against orders passed in certainpetitions filed by the appellants praying for writs of certiorari or otherappropriate writs quashing orders relating to assessment of sales-tax, andprohibiting the Superintendent of Taxes, Dhubri and other officers from takingaction in enforcement of the said orders. The appeals raise common questionsand may be disposed of by a common judgment.
2. The appellants are merchants carrying on business as dealers in jute, andhave their principal place of business at Calcutta. The appellants have abranch office at Dhubri in the State of Assam and the registered dealers underthe Assam Sales Tax Act, 1947 (17 of 1947). The appellants purchased jute atDhubri and other places in the State of Assam and despatched bales of jute todiverse factories outside the Province of Assam. The appellants submittedreturns of turnout for purposes of sales-tax before the Superintendent ofTaxes, Dhubri, under the Assam Sales Tax Act in respect of transactions of saleduring the period between March 1948 to March 1950. The Superintendent of Taxescalled upon the appellants under s. 17(2) of the Act to produce their books ofaccount and other evidence in support of their returns and granted them time toenable them to comply with the requisition, but the appellants failed to do so.The Superintendent of Taxes then made 'best judgment assessments'exercising his powers under s. 17(4) of the Act and issued demand notices forthe tax determined. Against the orders passed by the Superintendent of Taxesappeals were preferred to the Assistant Commissioner of Taxes. Before theappellate authority the appellants produced some but not all their books ofaccount and documents in support of their returns. Before the appellantauthority it was contended, inter alia, that the definition of 'sale'in s. 2(12) of the Act was beyond the legislative competence of the ProvincialLegislature, that tax was sough to be levied on sales effected outside theState, and that imposition of sales tax on the transactions of the appellantamounted to levying an 'export tax' which was not open to theProvincial Legislature. It was however not contended before the AssistantCommissioner of Taxes that the jute bales, sale price of which was included inthe turnover were not at the time of the contracts in the form of jute balesactually within the State of Assam and therefore the Explanation to s. 2(12)did not make that sale price liable to be included in the turnover of theappellants. The Assistant Commissioner of Taxes, Assam, dismissed the appeals.
3. In the revision applications preferred to the Commissioner of Taxes,Assam, against the order of the Assistant Commissioner of Taxes it wascontended for the first time that the price of jute included in the turnoverunder the orders passed by the Superintendent of Taxes was not liable to betaxed because within the meaning of the Explanation to s. 2(12) the goods werenot at the time of the contracts actually in the Province of Assam. TheCommissioner reject the contention after examining what he called the'time-table of cultivation'. He observed that the usual time formarketing jute of the new crop was between July and June of the following year,jute being planted in or about February and being ready for marketing some timeabout the month of June. The Commissioner further observed that the contractswere made on diverse dates between March and September and deliveries under thecontracts were made after the month of July when the new crop was brought intothe market. The contracts between the months of March and July were thereforein respect of the last year's crop and the goods sold must actually have beenin the Province of Assam at the date of the contracts. The Commissioner madecertain modifications in the assessment order, but with those modifications weare not concerned in these appeals.
4. Against the order passed by the Commissioner, petitions under Art. 226 ofthe Constitution were filed by the appellants for writs of certiorari andprohibition. Amongst the grounds urged before the High Court were the followingtwo grounds, which alone survive for determination in these appeals :
(1) that the Explanation to s.2(12) of the Act was ultra vires the Assam Legislature under the provisions ofthe Government of India Act, 1935, and therefore tax could not be levied onsales irrespective of the place where the contracts were made merely relyingupon the circumstance that at the time of the contracts of sale the goodscontracted to be sold were actually in the Province of Assam; and
(2) that the finding recorded bythe Commissioner that the goods were actually in the Province of Assam at thetime when the contracts were made was 'speculative'.
5. The High Court held that the Explanation to s. 2(12) was, in respect ofthe period prior to the Constitution, not ultra vires the authority of theProvincial Legislature, and that no attempt was made to establish before theappellate authority that the books of account supported the contention that thegoods were not actually in existence in the State of Assam at the time of thecontracts of sale. Holding that the reasons which the Commissioner had given insupport of his finding were not 'altogether unjustified' and that thetaxing authorities being 'fully conscious' that one of the essentialingredients of tax liability was that the goods must be actually in existencein the State of Assam at the time of the contracts of sale, the High Courtdeclined to consider whether the conclusions of the taxing authorities onquestions of fact were correct. But the High Court held that the plea about thevires of s. 2(12) and the Explanation thereto raised a substantial question asto the interpretation of the Constitution, and accordingly granted certificatesof fitness under Art. 132 of the Constitution.
6. At the hearing of these appeals counsel for the appellants sought leaveto challenge the correctness of the decision that the goods were when thecontracts were made actually within the Province of Assam. We have heardcounsel for the appellants at great length upon this application for leave toappeal on grounds other than constitutional on which the certificates weregranted by the High Court. After carefully considering the arguments, we are ofthe view that so case has been made out for acceding to that request. A personappealing to this Court under Art. 132 of the Constitution may not challengethe correctness or propriety of the decision appealed against on grounds otherthan those on which the certificate is granted, unless this Court grants himleave to raise other questions. Such leave is generally granted where the trialbefore the High Court has resulted in grave miscarriage of justice or where theappeal raises such substantial questions that on an application made to thisCourt under Art. 136 of the Constitution leave would be granted to theapplicant to appeal against the decision on those questions.
7. The Assam Sales Tax Act, 1947, was enacted in 1947. By s. 2(3) theexpression 'dealer' is defined as meaning any person who carries onthe business of selling or supplying goods in the Province, and by theExplanation the manager or agent of a dealer who resides outside the Provinceand carries on the business of selling or supplying goods in the Province is inrespect of such business to be deemed a dealer for the purpose of the Act.Clause (12) of s. 2 defines 'sale'. Section 3 is the charging section and s. 4prescribes the rates of tax. The sales-tax authority may, if he is notsatisfied that the return furnished by the dealer is correct and complete,serve on the dealer a notice required him either to attend in person and toproduce or cause to be produced any evidence on which he may rely in support ofhis return (sub-s. (2) of s. 17), and may make an assessment to the best of hisjudgment if the dealer fails to make a return or fails to comply with the termsof the notice issued under sub-s. (2) of s. 17. Section 30 confers a right ofappeal to an aggrieved dealer to the authority prescribed by the rules, and bys. 31 revisional jurisdiction may be exercised by the Commissioner of Sales Taxagainst the order of the sales-tax authorities. By s. 32, within sixty daysfrom the date of service of any order in appeal or revision, the dealer may, byapplication in writing, require the Board of Revenue or the Commissioner, asthe case may be, to refer to the High Court any question of law arising our ofsuch order, and if the Board or the Commissioner decline to state the case, thedealer may apply to the High Court calling upon the Board or the Commissionerto state the case, and the High Court may if it be not satisfied with thecorrectness of the decision of the Commissioner, require the authorityconcerned to state the case and refer it and on receipt of any suchrequisition, such authority shall state and refer the case. The High Court uponhearing any such case decides the question of law raised on the reference anddelivers its judgment thereon containing the grounds on which such decision isfounded (sub-s. (8)). The Act therefore provides a hierarchy of taxingtribunals competent to decide question as to the liability of the tax-payerunder the Assam Sales Tax Act, with a right to have questions of law arisingout of the order decided by the High Court of the Province. Primarily it is theSuperintendent of Taxes who assesses the liability to pay tax. An appealagainst the order of the Superintendent lies to the Assistant Commissioner ofTaxes and against the order of the Assistant Commissioner a revisionapplication lies to the Commissioner. Against the order of the Commissioner areference may be demanded on questions of law to the High Court and ifreference is refused the High Court may be moved to call for a reference. Thescheme evolved by the Legislature for determination of tax liability is thatall questions of fact are to be decided by the taxing authorities and onquestion of law arising out of the decision of the axing authorities theopinion of High Court may be obtained. The High Court has however no power todecide questions of fact, which are exclusively within the competence of thetaxing authorities. The High Court is again not an appellate authority over thedecision of the Commissioner; it has merely to give its opinion on questions oflaw arising out of the order of the Commissioner. Whether the decision of theCommissioner is not supported by any evidence, or is based upon a view of factswhich could never be reasonably entertained, is a question of law which arisesout of the order.
8. Against the order of the Commissioner an order for reference could havebeen claimed if the appellants satisfied the Commissioner or the High Courtthat a question of law arose out of the order. But the procedure provided bythe Act to invoke the jurisdiction of the High Court was bypassed. Theappellants moved the High Court challenging the competence of the ProvincialLegislature to extend the concept of sale, and invoked the extraordinaryjurisdiction of the High Court under Art. 226 and sought to reopen the decisionof the taxing authorities on questions of fact. The jurisdiction of the HighCourt under Art. 226 of the Constitution is couched in wide terms and theexercise thereof is not subject to any restrictions except the territorialrestrictions which are expressly provided in the Article. But the exercise ofthe jurisdiction is discretionary; it is not exercised merely because it islawful to do so. The very amplitude of the jurisdiction demands that it willordinarily be exercised subject to certain self-imposed limitations. Resort sothat jurisdiction is not intended as an alternative remedy for relief which maybe obtained in a suit or other mode prescribed by statute. Ordinarily the Courtwill not entertain a petition for a writ under Art. 226, where the petitionerhas an alterative remedy which, without being unduly onerous, provides anequally efficacious remedy. Again the High Court does not generally enter upona determination of questions which demand an elaborate examination of evidenceto establish the right to enforce which the writ is claimed. The High Courtdoes not therefore act as a court of appeal against the decision of a court ortribunal, to correct errors of fact, and does not by assuming jurisdictionunder Art. 226 trench upon an alternative remedy provided by statute forobtaining relief. Where it is open to the aggrieved petitioner to move anothertribunal, or even itself in another jurisdiction for obtaining redress in themanner provided by a statute, the High Court normally will not permit, byentertaining a petition under Art. 226 of the Constitution, the machinerycreated under the stature to be by-passed, and will leave the party applying toit to seek resort to the machinery so set up.
9. In the present case the appellants had the right to move the Commissionerto refer a case to the High Court under s. 32 of the Act, and to move the HighCourt if the Commissioner refused to refer the case. But they did not do so andmoved the High Court in its jurisdiction under Art. 226 of the Constitution,and invited the High Court to re-open the decision of the taxing authorities onquestions of fact, which jurisdiction by the statute constituting them isexclusively vested in the taxing authorities. This they did, without evenraising the questions before the Superintendent of Taxes and the AssistantCommissioner.
10. The appellants who are dealers registered under the Assam Sales Tax Actsubmitted their returns to the Superintendent of Taxes, but failed when calledupon to produce their books of account and other evidence in support of theirreturns. Even before the Assistant Commissioner, they produced some but not alltheir books of account and evidence demanded by the Superintendent. By theExplanation to s. 2(12) of the Act the expression 'sale', notwithstandinganything contained in the Indian Sale of Goods Act, 1930, includes sale of anygoods which are actually in the Province at the time when the contract of salein respect thereof is made, irrespective of the place where the said contractis made and such sales are deemed for the purposes of the Act to have takenplace in the Province. Under the Indian Sale of Goods Act, a sale takes placewhen property in the goods passes. But, for the purposes of the Assam Sales TaxAct situation of the goods is seized by the Legislature for the purpose offictionally regarding the sale as having taken place within the Province of Assamif at the time of the contract of sale the goods are within the Province.Liability to sales tax in respect of the goods where the transfer in theproperty of the goods has taken place outside the Province of Assam undoubtedlyarose if conditions prescribed by the Explanation, exist : viz. the goods areactually in the Province when the contract of sale is made, and not otherwise.But the question whether the goods at the date of the contract of sale wereactually in the Province is a question of fact which had to be determined bythe sales tax authorities. Before the Superintendent of Taxes liability to paytax was challenged but it does not appear to have been contended that at thetime of the contract of sale, the goods were not actually within the Province,and no such contention appears to have been even raised before the AssistantCommissioner of Taxes. Before the Commissioner in the revision applicationfiled by the appellants it was urged that part of the goods the price of whichwas sought to be included in the turnover were not within the Province at thetime of the contract of sale and therefore the price of those goods could notbe taken into account in computing the taxable turnover. The Commissioner heldhaving regard to the 'time-table of cultivation of jute' and the timewhen the jute is brought into the market for sale, that the goods sold werewithin the Province on the dates of the contracts and therefore the pricethereof was liable to be included in the taxable turnover. The High Court, aswe have already observed, took the view that the finding of the Commissionerwas not 'altogether unjustified', nor could it be said that theCommissioner and the other taxing authorities 'were not quite consciousof' the requirements which attracted the application of the Explanation tos. 2(12) and declined to enter upon a reappraisal of the evidence which in theview of the High Court the taxing authorities alone were competent to enterupon.
11. In these appeals Mr. Setalvad on behalf of the appellants contends thatthere is clear evidence on the record to show that even applying the test laiddown by the Commissioner some of the contracts of sale were made before thegoods were marketable and therefore the view taken by the taxing authoritiesthat the goods were at the date of the contract in existence within theProvince of Assam was 'without any foundation'. Counsel alsosubmitted that some of the contracts related to jute grown in Pakistan and withrespect to those contracts also the assumption made by the Commissioner thatthe goods were within the State of Assam at the date of the contract of salecould not be warranted. Counsel then said that the description of the goods inthe contracts of sale indicated that they related to bales whereas the contractsfor purchase by the appellants were in respect of loose jute and as the goodspurchased were not identical or ascertainable with reference to the contractsof sale made by the appellants, liability to pay tax was not attracted under s.2(12) of the Act. We are unable to entertain these pleas because they werenever raised before the Superintendent of Taxes and the Assistant Commissionerand no evidence was produced by the appellants to support those pleas. Beforethe Commissioner it was broadly urged that the goods in respect of thecontracts could not have been in existence within the Province at the date ofthe respective contracts of sale but that argument was for reasons alreadymentioned rejected by the Commissioner and the High Court declined to allow thequestion whether the findings of the Commissioner were 'speculative'to be agitated. The appellants now seek to plead that the taxing authoritieswere in error in holding that the goods conformed to the conditions as to thesitus of the goods at the dates of the contracts of sale, prescribed by s.2(12) so as to make the price liable to be included in the taxable turnover.The Legislature has entrusted power to ascertain facts on which the pricereceived on sales becomes taxable, to the authorities appointed in that behalfwith right of recourse to the High Court on questions of law arising out of theorder of the Commissioner of Taxes. It is therefore contemplated by theLegislature that all material evidence on which a tax-payer relies to justifyhis claim that his transactions are not taxable, should be placed before thetaxing authorities so that they may have an opportunity to adjudicate upon theclaim. If after a proper trial, the claim is negatived, because the facts onwhich it is founded are not proved, the proceeding must end. If, however, theadjudication of the Commissioner is vitiated because there is no evidence tosupport it or it is based on conjectures, suspicions or irrelevant materials,or the proceedings of the taxing authorities are otherwise vitiated so thatthere has been no fair trial, the High Court may undoubtedly advise theCommissioner on questions properly referred to it in the manner provided by theAct. But the High Court cannot be asked to assume the role of an appellateauthority over the decision of the Commissioner on questions of fact or even oflaw.
12. Assuming that there is some substance in the contention that theadjudication by the Commissioner proceeded on grounds which the appellantscharacterised as 'speculative', it was open to them to resort to themachinery provided by the Act, and having failed to do so, they could not askthe High Court to act as an appellate authority in clear violation of thestatutory provisions and to bypass the machinery provided by the Act.
13. We accordingly decline to entertain the application to raise questionsother than those raised by the certificate granted by the High Court, becausethe questions sought to be raised are questions of fact which were notcanvassed at the appropriate stage before the taxing authorities and themachinery provided under the Act for determination of questions relating toliability to tax is attempted to be bypassed.
14. The constitutional question on which certificate was granted does notneed consideration in any detail. By the Explanation to s. 2(12) of the Actnotwithstanding anything to the contrary contained in the provisions of theIndian Sale of Goods Act, 1930, a sale is deemed to be complete when the goodswhich are actually within the State of Assam at the time when the contract ofsale is made, irrespective of the place where the contract is made. Under theSale of Goods Act, 1930, in the absence of a contract to the contrary a sale iscomplete when property in the goods passes, but by the Assam Sales Tax Act theLegislature has attempted to locate the situs of sale for the purpose of levyof sales-tax by fixing upon the actual situation of the goods within theProvince at the date of the contract, for the purposes of levying tax on sales.The Legislature has thereby not overstepped the limits of its authority : The Tata Iron & Steel Company Ltd. v. The State of Bihar : 1SCR1355 .No argument has therefore been advanced before us to support the plea ofunconstitutionality.
15. All the appeals fail and are dismissed with costs. One hearing fee.
16. Appeals dismissed.