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Delhi Cloth and General Mills Co. Ltd. Vs. Municipal Corporation of Delhi and ors. - Court Judgment

LegalCrystal Citation
SubjectOther Taxes
CourtDelhi High Court
Decided On
Case NumberCivil Writ Appeal No. 503 of 1967
Reported inILR1975Delhi174
ActsDelhi Municipal Corporation Act, 1957 - Sections 113(2) and 169; Constitution of India - Article 226; Code of Civil Procedure (CPC), 1908 - Sections 11
AppellantDelhi Cloth and General Mills Co. Ltd.
RespondentMunicipal Corporation of Delhi and ors.
Advocates: V.M. Tarkunde,; Ravnder Narain,; J.N. Aggarwal,;
Cases ReferredKameswar Pershad v. Rajkainari Ruftan Koer and
a) the case focused on the writ petition challenging electricity tax levied under section 113(2) of the delhi municipal corporation act, 1957 - it was observed that though the remedy of appeal was provided under section 169 of the act but condition of pre-deposit of tax imposed under section 170 of the act, for filing an appeal was not justified - in view of the facts and considering the amount of electricity tax involved, petition under article 226 of the constitution of india, was maintainableb) the case debated on whether the instant petition was barred by rest judicata - in the instant case, it was observed that first writ petition had challenged the power to tax - the second petition had challenged the improper exercise of power - the ground assigned in the second petition, could.....s. rangarajan (1) the petitioner is the delhi cloth & general mills co. ltd., which filed this petition on 9-5-1967. under article 226 of the constitution to quash the notices of demand served on behalf of respondent no. 1 (municipal corporation of delhi) by respondent no. 2 (assistant assessor & collector of the corporation l io restrain them from enforcing the aforementioned notices of demand or to collect the amount specified therein in any manner, and alternatively, to direct amendment of the said notices of demand (copies of which arc annexures e and f to the petition) by hearing and determining them. the demand dated 31-12-1966 is for a sum of rs. 29,13,170.56 p. due on account of electricity tax on energy generated by the petitioner, livable under section 113 of the delhi municipal.....

S. Rangarajan

(1) The petitioner is the Delhi Cloth & General Mills Co. Ltd., which filed this petition on 9-5-1967. under Article 226 of the Constitution to quash the notices of demand served on behalf of respondent No. 1 (Municipal Corporation of Delhi) by respondent No. 2 (Assistant Assessor & Collector of the Corporation L io restrain them from enforcing the aforementioned notices of demand or to collect the amount specified therein in any manner, and alternatively, to direct amendment of the said notices of demand (copies of which arc Annexures E and F to the petition) by hearing and determining them. The demand dated 31-12-1966 is for a sum of Rs. 29,13,170.56 P. due on account of electricity tax on energy generated by the petitioner, livable under section 113 of the Delhi Municipal Corporation Act, 1957, for the period 1-7-1959 to 31-3-66. The Union of India has been imp leaded as the third respondent but this petition has been contested by respondents 1 and 2.

(2) It will be necessary to notice a few facts which have been succinctly stated in the judgment of K. N. Wanchoo, C. J. in Municipal Corporarion of Delhi v. Biria Cotton Spinning and Weaving Mills : [1968]3SCR251 . There were similar Writ Petitions filed by the petitioner as well as the Biria Mills; the judgment in the case filed by the petitioner followed the judgment rendered in the above case. On the 9th of February, 1959 the Municipal Corporation of Delhi (hereinafter called the Corporation passed a resolution purporting to be under-sub-section I of Section 150 of the Delhi Municipal Corporation Act (66 of 1957) (hereinafter referred to as the Act) for levy of three taxes including a tax on consumption of sale of electricity. Section 113 of the Act which confers powers on the Corporation to impose taxes divided them into two kinds, namely, obligatory taxes and optional taxes which may be imposed under sub-sections (1) and (2) respectively, of Section 113 of the Act. Section 150(1) of the Act provides that the maximum rate of tax lo be levied in the case of optional taxes (tax on generation of electricity is an optional tax) will be specified by a resolution of the Corporation. After the maximum rate which has thus been specified, the resolution has to be submitted to the Central Government for sanction under Section 150(2) of the Act and if sanctioned by the Government, the rate comes into force on and from such date as may be specified in the order of sanction. Subsequently the Corporalion passed another resolution lrndcr sub-section (3) of section i5() determining the actual rates at which the. tax is levled and the tax comes into force on the first day of the quarter of the year next followings the date on which such second resolution is passed. The Corporation forwarded the resolution, dated 9th February. 1959 which was somewhat defective, to the Government for sanction. The Central Government sanctioned, on 20th June, 1959 the tax on consumption or sale of electricity w'th effect from 1st July. 1959 with contain modifications regarding the rates. On 23rd June, 1959 the Standing Committee took the Government sanction into consideration and recommended to the Corporation the rates of lax as sanctioned by Government for being determined under sub-section (3) of Section 150 as the actual rates at. which the Sax would be livable for the year 1959-60. On 24{h June. i959 the. Corporation resonved that the recommendations of the Standing Committeeregardng tax on consumption of sale of electriciry be approved. Then folleowed de mauds by the Corporation on the basis of the imposition oF tax from 1st July, 1959.

(3) When the tax was demanded from the petitioner it filed a Writ Petition (Civil Writ No. 291-D of 1960) on the the of the Punjab High Court challenging the levy of the tax and the same was dismissed by a learned single Judge on 27-2-1963. The appeal (L.P.A.47-D of 1963) against the said decision was allowed by a Division Bench on 10-12-1964 holding, inter alia, (i) that the Central Government could not modify the rates specified in the resolution under Section 150(1), but could only either withhold sanction thereto or sanction them, and (ii) that the liability to pay tax could not commence earlier than 1st April, 1960 in view of the provisions contained in Section 109(2) read with Section 150(4) of the Act. On 3-12-1966 the Parliament passed the Delhi Municipal Corporation (Validation of Electricity Tax) Act No. 35 of 1966 (hereinafter referred to as the Validation Act). But this Act. it purported to validate the levy of electricity tax from 1-7-1959 to 31-3-1966 (both days inclusive). In view of the Validation Act fresh demands were made by the Corporation. On 31-12-1966 two notices of' demand, as noticed above, were issued by The Corporation. With reference to those notices of demand a representation was made by the petitioner on 27-1-1967 pointing out that the electricity tax at the rate of 3/4 paise per unit in respect of the energy consumed in its Caustic Soda Plant instead of 1/3 Paise per unit was excessive, this letter was replied to by the Assistant Engineer (MR) of the Delhi Hiectric Supply Undertaking of the Corporation on 20-3-1967 (copy of which, subject to certain errors is Annexure: 'J' to the rejoinder). By the said letter the petitioner was asked to furnish (I) month-wise breakup of the energy generated utilised for eleclro-Chemical purpose and for other purposes, (2) source of bifurcation of energy consumed under two heads. (3) whether the data had been supplied in detail every month concerning such information, and (4) whether the points of Iligher rate was ever represented to the Delhi Electric Supply undertaking. The petitioner replied (vide its letter dated 4--4-1967, copy oi which is Annexurere K to the rejoinder) stating that the High Court had already been moved (on 30-1-67 in C.W.!()-i, of 1967) challenging the levy of electricity tax : without prejudice to those contentions the information sought for was given as follows.

(1)Month-wise break-up of the energy generated and utilised for electroChemical purpose (Caustic Soda) and for other purposes during the period from 1-7-59 to 31-3-66 given a sperarate annexure.

(2)They had separate feeders for cleclroChemical plant (Caustic Soda) and other plants and separate meters were provided for purposes of ascertaining the power consumed in each plant. The units consumed in a particular month were being allocated on the basis of the meter readings.

(3)The data had been supplied to the D.E.S.U. in dctail every month while submitting the statistical information return to D.E.S.U.

(4)Right from the beginning and even now they have been contesting the validity of this levy and this fact had been brought to the notice of D.E.S.U. time and again.

(4) Since the petitioner got no reply the D.E.S.U. was reminded by their letter, dated 12-4-1967 (copy of which is Annexure L to the rejoinder) with the request that the demand may be corrected. Not having heard from the D.E.S.U. the present Writ Petition was filed, as noticed already, on 9-5-1967.

(5) It is necessary to notice at this stage that C.W. 104 of 1967, filed on 30-1-67, had challenged the validity of the Validation Act and as a result to quash the arrears of tax of electricity for the period 1-7-1959 to 31-3-1966. No ground had been taken therein concerning the fact that the rate of tax for electricity consumed for the Caustic Soda plant was excessive, as noticed above. Even earlier to the said writ Petition C.W. 29J-D of I960 had been filed by the petitioner challenging in the Punjab High Court the resolution of the Corporation, dated 23-6-1959 which was dismissed by the learned single Judge on 27-2-1963, but the L.P.A. against the same was allowed by a Division Bench on 10-2-1964. The Validation Act came earlier the present petition was filed (on 9-5-1967). The earlier Writ Petition (C.W. 586-D of 1960) challenging the constitutional validity of Section 150 of the Act was filed on grounds of excessive delegation; the same had been filed as early as on 18-7-66 and had nor been disposed of.

(6) By an application (C.M. 3106 of 1967) in this Writ Petition a request was made that Civil Writ Petition No. 104 of 1967, which had been listed along with C.W. 563-D of 1966 should be heard along with this Writ Petition because in all of them the constitutional validity of the portion of the Municipal Corporation Act had been challenged. This application was presented on behalf of the petitioner on 13-7-1967 but by order, dated 14-7-1967 a Division Bench of this Court held that the cases which were ready must be heard without delay and that C.W. 503 of 1967 should be heard as soon at it became ready and hence it need not be tacked on to the earlier cases. It was against the common judgment in C.W. 104 of 1967 and C.W. 563-D of 1966 that the appeal was preferred by the Corporation and the Supreme Court held, by a majority, that the Validation Act validly imposed taxes on consumption of sale of electricity till 31-3-1966: the appeals were accordingly allowed.

(7) Before noticing the various grounds on which the present petition has been resisted it is necessary to clear the ground concerning the manner in which the readings have been taken by the D.E.S.U. and the returns, if any, submitted by the petitioner. While hearing arguments on 21-1-1975 it was debated whether there was a single meter at the Chemical Works or whether there were other meters or sub-meters recording consumption of electrical energy separately for the Caustic Soda Plant. Mr. D. D. Chawla, learned counsel for the Municipal Corporation of Delhi, suggested that a person might be appointed by this Court who should proceed to the factory premises without loss of time to find out the actual position. Mr, V. M. Tarkunde, learned counsel for the petitioner, agreed to this course almost immediately after taking instructions. Mr. R. C. Beri, Advocate who was present in Court and was willing to be appointed as Commissioner fur this purpose, was appointed and his Ice (Rs. 500.00 ) directed tu be paid by the petitioner wilh a direction that il would be costs in the case. Mr. D. D. Chawla also handed over at about the same lime the meter reading books of the D.E.S.U. for connection No. OG/S (said to be the current-meter of the con- nection concerned). 1 found on perusing them that there was a slip posted on one of them on the page where the entries for July, 1961 haiJ. been made containing the following words: For Caustic 3983058 Other plant 1951202' followed by the words indicating that the total mill generation was 4914080, which was seen to tally wilh the figures which had been submitted with the return by the petitioner for the concerned period.

(8) The Commissioner inspected the factory premises on the same day in the presence of representatives of both sides and submitted a report explaining the position based on the statements made to him by the representatives of the petitioner and the D.E.S.U. He had asked for the system of generation, distribution and internal meter reading arrangement to be explained to him. These meters have been tested in July 1960 by Shri S. K. Basu, the present Additional Chief Engineer, D.E.S.U. The plant had one generator of 10,000 Kw capacity and one small generator of 2500 Kw capacity. The power is generated and fed into a 11,000 Volts Distribution Busbar from which separate main feeding lines at 11,000 Volts are going to various plants like Vanaspati, Caustic Soda, Fertiliser, Chemicals, Power Plant Auxiliary and factory lighting. Caustic Soda being a bulk load (7 MW. out of total generation out of 12 MW.) there were three feeders running for the entire Caustic Soda Plant. The main Distribution Feeders had their own individual KWH. meters. The reading of these meters was taken every 8 hours and at the end of the day the same was tallied with the sum total of the distributed Kwh to the generated KWH. The production efficiency of every product was worked out on the basis of units consumed by the respective plants. Separate registers were maintained wherein all the meter readings as well as units supplied to every plant were recorded. At the end of every month a statement was sent to D.E.S.U. in Form D.I. Those meters were not scaled by D.E.S.U. but it was explained by the petitioners representative Shri Dattaroy that even though the meters were not scaled the Desu was accepting their statements submitted every month. It was pointed out by Shri Ahuja, Assistant Engineer of Desu, that only those meters being sealed by Desu, were checked and approved by Desu, the Inspector noting the meter readings of both the meters and comparison of statements submitted by the consumers with those of units generated and noted by the Inspector etc. These were explained to him as mentioned in the report. There were more than one meter (which was scaled by DESU). Statements were made by the petitioner concerning the various readings: in case of discrepancy the consumer was asked to re-examine the statement and amend the same. The Desu was not taking meter readings at all earlier; this practice started only for the past two years.

(9) A petition had been filed by the petitioner (C.M. 63-W of 1975) for taking on record the photostat copies which had been filed along with C.M. 1604 of 1974 etc. They have not been made available to the petitioner by the Desu for inspection. The photostat copies pertain to the monthly statements scat by the petitioner to Desu showing separately, inter alias the distribution of electricity to the Caustic Soda Plant and the other plants separately and giving the total of the two plus the electricity purchased from the Desu etc. The Desu was supplied the necessary statistics in Form D-l (for instance annexure XIV) along with a covering letter (for instance annexure XHI); it is needless to refer to others. Every one of those statements was sent along with a covering letter (all the annexlires with their covering letters have been marked as Annexurcs Xiii to L. The covering letters stated that the statements were in form D-l).

(10) It is instructive to notice the following details pertaining to the submission of those returns which go to show that the returns were being sent regularly; if any of them had not been sent in time the Desu was asking for it. Annexure I (at p. 213 of the record) is a letter dated 24-4-1962 addressed from the Desu to the Dcm Chemical Works (a unit of the petitioner company) stating that in order to assess the energy generated for taxation it is obligatory for the petitioner to supply to Desu office the information on Form D.l regularly and within 15 days of the close of the month; there was a further assertion that the statements in respect of March and April 1962 had not been received in their office and that if the same were not received within 10 days of the receipt of the said communication it would be treated as an offence under section 465 of the Delhi Municipal Corporation Act. The next important communication is Annexure Ii datted 30-8-1962 (at page 214 of the record) from the Desu to the petitioner referring to the fact of the monthly statistics of generation in Form D.I not having been sent for the period July 1962 which indicates that by that time in pursuance of the earlier communication referred to above the returns of March 1962 to April 1962 had been sent probably by May and June 1962 also. This would be clear from Annexure Iii the reply thereto by the petitioner to the Desu enclosing the statement for the month of June 1963.

(11) On the basis of these Annexurcs which have not been seriously controverter by Shri D. D. Chawla before me (except to say that the record of the Desu was not available) it is a fair inference that the petitioner had been disclosing separately the consumption for the Caustic Soda Plant separately and the other consumption of electricity separately out of what was generated by the petitioner during the period in question.

(12) Since it was not admitted to start with that the Caustic Soda Plant waan electro Chemical industry the learned counsel for the petitioner referred me to the following works on the subject. In the 'Encyclopedia of Electro Chemistry' edited by Hampel published by Reinhold Publishing Corporation, New York. an page 172, it is mentioned as follows :

'CHLORINEindustry, also called the chloralkali or chlorinecaustic industry, produces the two greatest tonnage products of the electro Chemical industry', chlorine and caustic soda (sodium hydroxide or NaOH)'.

(13) In the book entitled 'electrochemistry'. Vol. Ii, 2nd Edition, published by John Willey & Sons, Inc., New York there is the following Chapter X entitled the 'Electrolysis of Alkali Halides' at page 275 :

'ALL the alkali halides can be decomposed by the electrolysis of their aqueous solutions or of then fused salts, but only the electrolysis of sodium chloride and to a much lesser extent of potassium chloride has attained commercial importance. The electrolysis of sodium chloride is a very important electro-Chemical industry.'

(14) In the book entitled 'The Chemical Process Industries' by R. Noil-is Shreve published by Me. Graw Mills Book Company Omc. 1945 Edition, on page 300 in table 2 comprising of 'Chemicals and Metals Made ElectroChemically' it is clearly stated that caustic soda is produced clectro-Chemically, making it abundantly clear that caustic soda-chlorine production is an electroChemical industry. Similarly in the book entitled Industrial Electro-chemistry' by C. L. Mental Ph. D., 2nd Ed. 7th impression published by McGraw Hill Book Company Ltd., New York 1940 on page 613 in table Lxxiv entitled 'Energy consumption of ElectroChemical Products', caustic soda is mentioned as an electroChemical product. It, thereforee, follows that manufacture of caustic soda is an electro-Chemical industry.

(15) In the light of such overwhelming literature indicating that caustic soda plant is electroChemical industry. Mr. D. D. Chawla could not being himself to dispute this fact seriously.

(16) The facts which are thus fairly clear arc that the consumption of electricity by the elector Chemical industry of the petitioner, out of electricity generated by it, is liable to tax only at a rate of 1/3 Paise per unit as distinguished from 3/4 Paise per unit for the electricity consumed by other plants and that that petitioner had been sending these returns regularly during the period in question to the Desu on Form D-l and that whenever there was some delay in sending the same the Desu had been enforcing submission of such returns on pain of prosecution.

(17) In the aflidavit which was filed on behalf of Mcd by Shri Basil Dvv on: 17-1-1975 in reply to C-M- 63-W of 1975 it was stated lhat the disputed documents (of which photostat copies have been filed) were not received in the Corporation office.

(18) I he respondents put the petitioner to proof of documents which they want to be now placed on record on the ground that the original of those documents were not received. By a further affidavit of the same date Shri Basil Dev stated that he had brought to the Court all the files, describing the files, of which inspection was given to the counsel of the petitioner. There was a further statement that there was no other file/record with the respondents relating to the above. There is no prohibition in the matter of going into even disputed questions of fact especially in a case especially where true facts can be ascertained without much difficulty in a petition under Article 226 of the Constitution. Even a bare narration, like what has been admitted above of what happened in this case, is sufficient to indicate that during the relevant period the petitioners had been submitting the returns in the prescribed Form D.I and that no objection at all had been taken throughout to the correctness of the figures regarding consumption of electricity given separately for the Caustic Soda plant and the other plants for which there are two different tarrifs as noticed above. The figures were being supplied by the petitioners and were being accepted by the DESU. It does not behove them to say, at this late stage, that the petitioners should prove strictly the amount of electric energy consumed, out of what was generated by them. separately for the Caustic Soda Plant as well as the other plants. The entire course of conduct of both sides shows that there can be hardly any doubt about the petitioners having separately shown the figures of the electric energy consumed for the Caustic Soda plant separately. The procedure which has been explained to him by the persons concerned without any exception being taken to it either or before him, is that the reading of the concerned meters is taken every 8 hours and tallied with the sum total of electricity generated. The production efficiency was being worked out on the basis of units consumed by the respective plants. For the Caustic Soda plant electricity is a raw material; cost-accounting would, thereforee, involve separate easurement of energy consumed by the Caustic Soda plant. It is unfortunate that the respondents should have taken such a stand with reference to this aspect instead of fairly conceding, as it seems to me they should have done in all fairness, that the Writ Petition would have to he disposed of only on legal contentions put forward by them after conceding the above factual position. It does not seem to admit of doubt that the petitioner has consumed the amount of energy, which it stales, it had consumed separately for the Caustic Soda plant. The petitioner, as soon as it received the impugned notices of demand datd 31-12-1966, did represent to the Desu on 27-1-1967 regarding the excessive assessment as aforesaid in response to which the Desu required break-up of energy consumed for 'electro-Chemical purposes'. Unfortunately there was no further inquiry into this question. Because of there being no such inquiry the present Writ Petition was filed attacking the demands on the ground of excessive assessment the respondents had chosen to repudiate the petitioner's allegation concerning excessive assessment.

(19) It is no doubt true that there appears to be no express provision in Chapter Viii of the Delhi Municipal Corporation Act, 1957 providing specifically for an inquiry before making the demand in the case of an optional tax like the one on the consumption, sale or supply of electricity [Section 113(2)(d)]. Section 150(1) gives the power to the Corporation to pass a resolution for levy of taxes specified under sub-section (2) of Section 113 defining the maximum rate of tax to be levied, the class or classes of persons or descriptions of articles and properties to be taxed, the system of assessment to be adopted and exemptions, if any, to be granted. The other sub-sections (2) to (4) which prescribe the further procedure are silent about the hearing to b'e given to the assessed. Section 153 enables the Commissioner to present to the persons liable for the payment of any tax, when it has become due, a bill for the amount due such a bill not being necessary in the case of (a) tax on vehicles and animals, (b) a theatre-tax, and (c) a tax on advertisement. Section 153(2) required that the bills should specify the tax and the period for which the charge is made. Section 154 provides that if the amount of the tax for which a bill has been presented under Section 153 is not paid within fifteen days from the presentation thereof, or if the tax on vehicles and animals or the theatre-tax or the tax on advertisements is not paid after it has become due. the Commissioner may cause to be served upon the person liable for the payment of the same a notice of demand in the form set forth, in the Seventh Schedule. The prescribed form of notice of demand, in the same Schedule, only provides for the amount demanded and on which account it is demanded being mentioned indicating the period for which the same was liable to be paid. If within thirty days of the said notice the amount demanded is not paid and sufficient cause for non-payment of the same not shown to the satisfaction of the Com missioner he can issue a warrant of distress for the recovery of the same with costs. Section 155 provides for a penalty in case of default of payment of taxes. Section 156 provides for the recovery of the tax; Sections 157 and 158 deal with distress and disposal of distrained property etc. Section 160 enables the sum due on account of a tax to be recovered from a defaulter by a suit instead of proceeding against him by distress and sale. Section 169 provides for an appeal against the levy of assessment of any tax under the Act to the Court of the District Judge of Delhi coupled with a provision for the District judge making a reference of any question of law etc. to the High Court. The conditions of the right of appeal arc provided in Section 170 which reads as follows : 'no appeal shall be heard or determined under section 169 unless-

(A)the appeat is, in the case of a properly tax. brought within thirty days next after the date of authentication of the assessment list under section 124 (exclusive of the time requisite for obtaining a copy of the relevant entries therein) or, as the case may be, within thirty days of the date on which an amendment is finally made under section 126, and, in the case of any other tax, within thirty days next after the date of the receipt of the notice of assessment or of alteration of assessment or, if no notice has been given, within thirty days after the date of the presentation of the first bill or, as the case may be, the first notice of demand in respect thereof:

Provided that an appeal may be admitted after the expiration of the period prescribed thereforee by this section if the appellant satisfies the court that he had sufficient cause for not preferring the appeal within that period;

(B)the amount, if any. )o dispute in the appeal has been deposited by the appellant in the office of the Corporation.'

(20) Even though no specific opportunity has been provided giving an opportunity to the assessed, from whom tax has been demanded, it would still be possible to read into the statute the requirement of audi alteram partem when there is nothing in the statute to actually prohibit the giving of an opportunity to be heard. On the other hand from the nature of the statutory duty imposed itself an obligation to hear before deciding seems possible to infer. This is the view which has been expressed by Alagiriswami, J., speaking for the Supreme Court in The Goverivileni of Mysore v. ./. V. Bhat and others decided on 14-10-1974, since reported in 1975 I S.C.C. 3. Alagiriswamy, J. explained that decision in King v. Electricity Cominissioner 1924 I K.. B. 171^) was not really a departure from the general principles laid down in Cooper v. Board of Works for the Wandxworlh District 14 Cb (NS) J80(i) but was an attempt to formulate the conditions under which the general principle was laid down by Eric, C. J. in Cooper, who quoted the Biblical story of how even God Himself had given Adam an opportunity of answering why he had eaten the forbidden fruit before expelling him from paradise. In later cases. Alagiriswamy, J. explained, emphasis was more on the needs of justice and fairness rather than upon the distinction between judicial and administrative action.

(21) It seems, thereforee, that when the petitioner wanted the respondents to go into tile question of excessive assessment and made representations in this regard it was their duty to have done so. Noi only did they fail to do so and give the resultant benefit, if any. accruing out of such inquiry to the petitioner they have even without making any such inquiry chosen: to resist the petitioner's claim in this Writ Petition, by going the length of (1) denying the fact of such returns having been sent in the prescribed form by the petitioner to the Desu, and (2) contending that the Caustic Soda plant is not ''electro-Chemical plant' to which the benefit of lesser tariff would apply. The petitioner had itself prayed not only for quashing the demands but for relief (c) in the alternative, in this Writ Petition. This would have been so normally, but it seems to me that the respondents have by their own conduct in resisting this Writ Petition on the aforesaid ground, on the basis of their not having any of the records which the petitioner stated had been sent to Desu by way of monthly returns in the prescribed form D.I, disentitled themselves to even adjudicate upon this issue as to whether they were so sent or not. They cannot be expected to adjudicate this matter fairly, when lhey have chosen to deny even the fact, which seems patent that not only were the necessary returns sent but that the Caustic Soda plant is an electro-Chemical industry. The only feasible and fair course in the circumstances seems to be that as requested by the petitioners ihe notices of demand should be quashed.

(22) In the result I have only to deal with the legal eontentions which have been urged on behalf of the respondents.

(23) The first contention is that without filing an appeal against the impugned demands) as it could have been filed under Sections 169 and 170 of the Act, this Writ Petition is not maintainable. I am afraid there is no substance in this contention for the following reasons :

(1)C.W. 104 of 1967 had been filed on 30-1-1967 challenging the validity of the Validation Act and, as a result, to quash the arrears of tax on electricity for the period 1-7-1959 to 31-3-1966; even earlier C.W. 563-D of 1966 had been filed questioning the validity of Section 150 of the Act. In these circumstances it was not unjustifiable- not to prefer any appeal.

(2)A representation had been made even on 27-1-1967 that the assessment was excessive. Such a representation was permissible; yet there was no enquiry into it, which led to the filing of the present Writ Petition on 9-5-1967.

(3)On 10-12-1964 the said tax itself had been declared invalid by an order of the Appellate Bench of the Circuit Bench of the Punjab High Court in L.P.A. 47-D of 1963 arising out of C.W. 291-D of 1960; thereforee, there could be no recovery of tax till the coming into force of the Validation Act of 1966 on 3-12-1966. Previously the entire recovery of the electricity tax was stayed by the Circuit Bench of the Punjab High Court pending disposal of C.W. 291-D of 1960. Recovery was stayed during the pendency of the L.P.A. also.

(A)The petitioner was advised that such bills and notices of demand in respect of electricity tax nut complying with the aforesaid resolution were illegal and could not be enforced. When such contentions were open to the petitioners under Article 226 of the Constitution without filing an appeal, t!icv cannot be denied relief specially in view of the fact that Section 170-B requires that the amount in dispute should be deposited along with the appeal: this is an onerous condition. The following observations of Shah, J. (as he then speaking for the Supreme Court, in Bhopla Sugar Industries Ltd.v.D. P. Duhe A.I.R. 1967 S.C. 549 may be usefulley set out:

'IT is true that the jurisdiction of the High Court under Art. 226 is extensive, but normally the High Court does not exercise that jurisdiction by entertaining petitions against the order of taxing authorities, when the statute under which tax is sought to be levied provides a rcmedy by way of an appeal or other proceeding to a party aggrieved and thereby by-pass the statutory machinery. That is not to say that the High Court will never entertain a petition against the order of the Taxing Officer. The High Court has undoubtedly jurisdiction to decide whether a statute under which a tax is sought to be levied is within the legislative competence of the legislature enacting it or whether the statute defies constitutional restrictions or infringes any fundamental rights, or whether taxing authority has arrogated to himself power which he does not possess, or has committed a serious error of procedure which has affected the validity of his conclusion or even where the taxing authority threatens to recover tax on an interpretation of the statute which is erroneous. The High Court may also in appropriate cases determine the eligibility to tax of transaction the nature of which is admitted' etc.

MYattention has also been drawn to the decision of Rajindar Sachar, J. in New Delhi Holy Family Hospilul Sociely . Municipul Corporation of Delhi etc., decided on 12-12-1973 (in C.W.I Ii 4/ 71)('). which refers to the well-known principle that the question of alternative remedy is only a question of discretion but not of jurisdiction and that the Court has to see in each case whether it should decline to exercise jurisdiction under Articles 226/227 of the Constitution on the ground that alternative remedy is available. It was pointed out by Sachar, J. with specific reference to Section 169, and the conditions imposed by Section 170. that there was a condition precedent to the right of appeal of a deposit of the amount in dispute by the petitioner. Relying upon Himatlal Hiralal Mehta v. State of Madhya Pradesh & Ors. : [1954]1SCR1122 he pointed out that the condition being oncrous and the lax involved being substantial recourse to Article 226 without filing an appeal in such circumstances could not be interdicted The present ease is even strong because of the other features present in this case. The entire levy had been assailed sucecssfully at least at one stage, till the Supreme Court held against it. In these circumstances this docs not seem to be a case where the present petition under Article 226 of the Constitution could be dismissed on the ground that no appeal (s) had been filed.

(5)On a reading of the provisions relating to appeal and the presentment of the bill it seems that thirty davs time has to be reckoned from the presentation of the bill. It docs not seem that in respect of the very same subject matter the petitioner would be entitled to tile an appeal within thirty days of the notice of demand (as per the Form set out in Schedule VII) which is issued turn enabling cause being shown against the issue of a warrant of distress or attachment: it does not seem to be against the original levy itself by way of presentation of the bill. The notice of demand, thereforee, is irrelevant in the case of an electric-bill which is usually made by only presenting it on the basis of the meter-reading. If there is any error in the reading the person concerned will undoubtedly have an opportunity of making a representation to those concerned about the correctness of the bill and this would have to be inquired into.

(6)The limitations in the mailer of exercising jurisdiction under Articles 226/226 of the Constitution being self-imposed there could be interference in proper cases even when there was no appeal and the right of appeal even when it exists but has become barred in order to meet with the ends of justice (a number of cases bearing on this question have been discussed by me in Desh Bhandhu Gupla & Co. v. judge Small Cause Courts C.M. (M) No. 161/72 decided on 31-10-1973.

(24) The second objection is on the ground of rest judicata, but no plea of rest judicata has been raised in the return. It was only in the further reply affidavit dated 29-4-1974 filed by N. K. Gupta, Commercial Officer of the Desu, said to be in reply to the rejoinder filed by the petitioner, that the contention was put forward for the first time that the present writ petition is barred by reason of there having been no challenge in C.W. 104 of 1967 concerning the two notices of demand for the period 1-7-1959 to 31-3-1966 on the ground of assessment being excessive. In paragraphs 3 and 4 of the said affidavit the above contentions were raised and the principle of constructive rest judicata was specifically invoked in paragraph 4. In the further reply which the respondents filed they could, if at all, only controvert any fact stated for the first time in the petitioners' rejoinder; in no event could they be permitted to raise a plea of this kind in this manner. Besides, there seems to be no scope for such a contention being raised in this Writ Petition specially on account of the application having been made, as already noticed, in this vcrv Writ Petition that it may be heard along with C.W. 104/67 (which in turn had been listed along with C.W. 563-D of 1966). The reason (expressed) for not hearing them together was that the cases which were ready should be heard without delay. If. as requested by the petitioner, this case also had been listed along with C.W. 104/67 there should have been no impediment to the hearing of this Writ Petition which raised the question of excessive assessment. But it was not found feasible to hear this petition along with C.W. 104/67 on account of the latter alone being then ready for hearing.

(25) It docs not also stand to reason why the principle of constructive rest judiciala should be invoked in this case, even if could (Otherwise) be invoked. In Daryao v. Slate of U.P. and others : [1962]1SCR574 Gajendragadkar, J. (as he then was) wondered whether a technical requirement prescribed in Section 11 like the competence of the first court to try the subsequent suit is an essential part of the general rule of rest judiciala : there was, however, no difficulty felt in invoking the general principle of rest judicata in the matter of a petition field under Article 226 of the Constitution. The object underlying the principle of rest judicata is two-fold (1) minimising litigation; (2) avoiding unnecessary harassment to parties. As pointed out by Lawrence Jenkins in Sheoparsan Singh v. Ramnandan Singh 43 LA. 91 the rule of rest judicata, thereforee while it is founded on ancient precedent, is also dictated by a wisdom, which is lor all time, Vijnaneswara and Nilakantha were cited, in addition to the text of Katyayana. regarding this plea 'of former judgment' also proceeded to enquire whether the doctrine of rest judicata is based on some public policy; it is in the interest of the public that a finality should be attached to a binding decision pronounced by a court of competent jurisdiction. So far as fundamental rights, which were sought to be enforced in Writ Petitions are concerned it was noticed that a court would naturally refuse to circumscribe them or to curtial them except as provided by the Constitution itself (p. 1461).

(26) Daryao was followed by Sm.t. Ujjam Bai v. State of U.P. A.I.R. 1962 S.C. 1621, Naresh v. State of Maharashtra : [1966]3SCR744 etc. In the former the Supreme Court, by a majority, postulated that the determination of a quasi-judicial authority acting under intra virus statute not infringing any fundamental right. In the latter case it was observed that it would be singularly inappropriate to assume that a judicial decision pronounced by a Judge of competent jurisdiction in or in relation to a matter brought before him for adjudication can affect the fundamental rights of the citizens.

(27) In a subsequent decision (vide Ghulam Sarwar V. Union of India : 1967CriLJ1204 the Supreme Court distinguished Daryao on the ground that the High Court had dismissed the petition, in that case, under Article 226 of the Constitution after hearing the matter on merits, on the ground that no fundamental right was proved or contravened (p. 1336). The petitioner, in Ghnlam Surwar, was detained in a case of conspiracy to smuggle gold under the Customs Act and was sentenced to undergo imprisonment for nine months. Before the expiry of the term he filed a habeas corpus petition in the Circuit Bench of the Punjab High Court at Delhi. The petition was dismissed on merits but the constitutional validity of Section 3(2)(g) of the Foreigners Act, 1946 was not canvassed. In a subsequent petition Subba Rao, C.J. had to appreciate the Indian constitutional position in order to repeal a contention based on rest judicata and observed :

'THE order of the High Court is not rest judicata as held by the English and American Courts either because it is not a judgment or because the principle of rest judicata is not applicable to a fundamentally lawless order.'

THEREseems to have been a fear that the automatic applicalion of constructive rest judicata might narrow considerably the scope of liberty of an individual.

(28) There arc passages in Daryao itself suggesting that if the petition is dismissed in liming without a speaking order it could not be treated as creating a bar of rest judicata (p. 1465). In the absence of a speaking order it may not. be easy to decide what factors weighed in the mind of the Court making it difficult and unsafe later to hold that such a summary dismissal was one on the merits and constitutes a bar of rest judicata against a similar petition filed under Article 32. These observations in Daryao were later explained by Wanchoo, C.J., speaking for the Supreme Court, in Virudhunagar Steel Rolling Mills Lid. v. The Government of Madras A.I.R. 196S S.C. 1196. It was not necessary that notice should have gone in the earlier Writ Petition before it was dismissed even a dismissal in liming would have that effect, depending on the nature of that order, viz., whether it was a speaking order disposing of the petition on merits.

(29) The Supreme Court expressed the view in Amalgamated Coalfields Ltd. v. Janapada Sabha Chhindwara and others : AIR1964SC1013 that the principle of constructive rest judicata is a special and artificial form of rest judicata and that it should not apply to Writ Petitions. But a different conclusion seems to have been reached in Devilal Modi v. Sales Tax Officer : [1965]1SCR686 . In the latter case the validity of the order of assessment under the Madhya Bharat Sales Tax Act, 1950 was challenged on the ground of invalid delegation under Section 19 of the Act and the assessment being wrong; in the subsequent Writ Petition there was a challenge, again, of the same order of assessment for the same period, hut on two grounds, which had not been permitted to be raised by the Supreme Court in an appeal arising from the decision in the earlier Writ Petition. Gajendragadkar, C.J. conceded the technical or artificial nature of the rule of rest judicata but refused to entertain the said grounds staling that if the principle of constructive rex judicata was not applied to such writ proceedings a party can tile as many Writ Petitions as he likes and take one or two points alone every time. Gajendragadkar, C.J., was also a party to Amalgamated Coalfields Ltd., but he distinguished it on the ground that the order in that case was in relation to a different period and not for the same period as was covered by an earlier petition.

(30) In the Union of India v. Nanak Singh : (1970)ILLJ10SC there was a further extension of the principle of rest judicata being applied in a suit by reason of 'express decision' in a previous Writ Petition. The ground of ''express decision' may not cover Ilie case of 'construcSive rest judicata', based on the principle of 'might' and 'ought'.

(31) Devilal only establishes that an assessment of a taxing authority for the same period cannot, be attacked in successive Writ Petitions. Amalgamated Coalfields Ltd., was only distinguished but not disapproved in Devilal; the position would well be different in the case of Writ Petitions relating to tax assessments for successive periods. Even where the assessment, for the same period is concerned the rationale behind invoking the principle of constructive rest indicated in such a context is the prevention of parties from taking one or two points alone, each time and successively.

(32) This is certainly not the position here in the present case. C.W. 104/67 was filed a few days after representations had been made on the ground that the assessment was excessive; what led to the present Writ Petition was the omission of the respondents even to consider the objections raised by the petitioners on the ground of the assessment being excessive. Not merely that: even after filing the present Writ Petition the petitioner applied for all the Writ Petitions being decided together-a request which was negatived.

(33) The plea of constructive res-judicata would certainly not be available to the respondents in the circumstances of the present case. It was perhaps for this reason that this pica was not even raised earlier; it has been lugged in, among other pleas, in the above said. further affidavit filed after the petitioners had filed their rejoinder probably on account of a feeling that there is hardly any tenable defense to this Writ Petition.

(34) The attack in Civil Writ (No. 104 of 1967) that there was no valid power to tax is quite different from and even opposed to the present attack which concedes the power to tax but is concerned with showing that the power to tax was exercised in an excessive manner.

(35) These not being suits, to which the provision of Order 2 Rule 2 Civil Procedure Code . would apply, the only ground of constructive rest judicata, if it could be raised at all, would be on the basis of Explanationn Iv to Section 11 Civil Procedure Code ., which reads as follows :

'ANY matter which might and ought to have made ground of defense or attack in such former suit shall be deemed to have been a matter directly and substantially in issue in such suit.'

ONthe language of Explanationn Iv to Section 11 it seems difficult to contend that the ground of excessive assessment ought to have been coupled with an attack on the want of power to tax, even if it could be said that it might have been possible. The words employed- might and ought-are cumulative; they are not in the alternative. It is a well-established rule that any plea which if taken would have been inconsistent with or destructive of the title in the earlier suit is not a matter which ought to be raised therein because even though it might also have been raised in the alternative. This aspect was explained by the Judicial Committee of the Privy Council in Kameswar Pershad v. Rajkainari Ruftan Koer and others I.L.R. 20 Cal 79. The possibility of merely raising it as a ground of attack or defense, at least in the alternative, is alone not sufficient; the test is one which is more compulsive, namely, that the said plea 'ought' to have been taken as a ground of attack or defense. These features would of course depend upon the particular facts of each case. It seems difficult to say in the present case that the petitioner ought to have raised the ground of excessive assessment in the Writ Petition (C.W. 104 of 1967) which they filed challenging the constitutionality of the statute which empowered the tax to be imposed.

(36) Since in the present case the petitioner who had made representations regarding the excessive assessment, even before it filed C.W. 104 of 1967, were obliged to file the present Writ Petition later on only because no action was taken on such representations, and had also applied turn this Petition being heard along with C.W. 104 of 1967, there is no question of any consideration uf public policy being involved here; nor was the petitioner seeking to violate public policy. Judged by whatever principle-'finality of decisions' based on 'public policy considerations', 'express decision' or 'might and ought'- the present Writ Petition cannot be dismissed on the ground of excessive demand not having been raised in C.W. 104 of 1967, even assuming that such a pica could be gone into despite the same not being raised in the return itself.

(37) In the result the Writ Petition is accepted and the impugned demands (copies of which are Annexures E & F to the Writ Petition) are quashed to the extent of the same being in excess of what is admitted by the petitioner. The respondents and their agents are restrained from collecting any tax at a rate higher than 1/3 Paise per Kwhr for the energy generated by it and consumed in the Caustic Soda plant, as stated by the petitioner. The petitioner will be entitled to costs as well. Counsel fee Rs. 500 (Rupees Five Hundred only).

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