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The Union of India (Uoi) Vs. Narendra Dhirubhai Desai and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtGujarat High Court
Decided On
Judge
Reported in(1968)9GLR261
AppellantThe Union of India (Uoi)
RespondentNarendra Dhirubhai Desai and ors.
Cases Referred and Mohammad Ahmed v. Vakil Ahmed
Excerpt:
- - the learned district judge on a consideration of the oral as well as documentary evidence on record came to the conclusion that the partition alleged by the plaintiffs was established and that the plaintiff in each suit carried on his own independent and separate business of manufacturing art silk fabric on the power looms allotted to him on partition with effect from 20th april 1954. the learned district judge relied on the memorandum of partition in reaching this conclusion and in regard to the admissibility of the memorandum of partition he held that the memorandum of partition was not an instrument of partition but was merely a record of the partition effected on the previous day and it was, therefore, not required to be stamped as an instrument of partition nor was it required.....p.n. bhagwati, j.1. one dhirubhai was the manager and karta of his joint family which consisted of himself and his two sons, kirtikumar and narendra. the said joint family owned 64 power looms and carried on business of manufacturing art silk cloth on the said power looms in the name of nalini silk mills at surat. there was no excise duty on art silk fabric upto 28th february 1954 but with effect from that date, section 8 of the finance act, 1954, provided for levy of excise duty on art silk fabric by introducing item no. 12a in the central excises and salt act, 1944 (hereinafter referred to as the act) in the following terms:12a. rayon or artificial silk fabrics.'rayon or artificial silk fabrics' include all varieties of fabrics manufactured either wholly or partly from the product.....
Judgment:

P.N. Bhagwati, J.

1. One Dhirubhai was the manager and Karta of his joint family which consisted of himself and his two sons, Kirtikumar and Narendra. The said joint family owned 64 power looms and carried on business of manufacturing art silk cloth on the said power looms in the name of Nalini Silk Mills at Surat. There was no excise duty on art silk fabric upto 28th February 1954 but with effect from that date, Section 8 of the Finance Act, 1954, provided for levy of excise duty on art silk fabric by introducing Item No. 12A in the Central Excises and Salt Act, 1944 (hereinafter referred to as the Act) in the following terms:

12A. Rayon or Artificial Silk fabrics.

'Rayon or Artificial silk fabrics' include all varieties of fabrics manufactured either wholly or partly from the product commercially known as rayon or artificial silk, but do not include any fabric-

xx xx xx xx(v) produced or manufactured in one or more factories by or on behalf of the same person in which less than twenty-five power-looms in all are installed.

Originally when the bill was introduced, Clause (v) of Item No. 12A exempted art silk fabric produced or manufactured in one or more factories by or on behalf of the same person in which less than ten power looms in all were installed but as a result of the representation made by the Art Silk Manufacturers' Association, Surat, to the Government, the exemption limit in terms of power looms was raised from 10 to 25 and the Finance Act, 1954, as ultimately passed, gave exemption in respect of art silk fabric produced or manufactured in one or more factories by or on behalf of the same person in which less than 25 power looms in all were installed. Since the said joint family owned 64 power looms, it became liable to payment of excise duty on art silk fabric manufactured by it on the said power looms with effect from 28th February 1954. On 20th April 1954, however, a partition was effected of the said power looms amongs Dhirubhai and his two sons, Kirtikumar and Narendra and as a result of the partition 18 power looms went to the share of Dhirubhai, 22 power looms went to the share of Kirtikurar and 24 power looms went to the share of Narendra. Narendra was a minor at the date of the partition and, therefore, in the partition he was represented by one Gajanan Joshi who was a close friend of the family. The partition was thereafter recorded on the next day in a memorandum drafted and prepared by an advocate practising in Surat and the memorandum was executed in triplicate by Dhirubhai, Kirtikumar and Gajanan Joshi representing minor Narendra. Consequent on the partition, Dhirubhai started manufacturing art silk fabric on the 18 looms allotted to his share in the name of Nalini Silk Mills, Kirtikumar started manufacturing art silk fabric on the 22 looms allotted to his share in the name of Arora Textiles and Narendra started manufacturing art silk fabric on the 24 looms allotted to his share in the name of Narendra D. Desai. The result was that from and after 20th April 1954 the said 64 power looms ceased to be joint family property and the joint family ceased to manufacture art silk fabric on the said 64 power looms but instead each one of the three members of the joint family, namely, Dhirubhai, Kirtikumar and Narendra carried on his own independent and separate business of manufacturing art silk fabric on the power looms that came to his respective share on partition: Since the power looms owned by each of these three persons were less than 25, they contended that none of them was liable to payment of excise duty in respect of art silk fabric manufactured by him with effect from 20th April 1954 nor was there any obligation on any of them to obtain any licence for carrying on the business of manufacturing art silk fabric. The Superintendent of Central Excise, however, by his letter dated 28th July 1954, Exhibit 96, refused to recognize the partition of the said 64 power looms amongst these three persons and stated that all the said power looms would be considered as a single unit for the purpose of central excise control. The Superintendent of Central Excise pointed out that the production of art silk fabric on all the said power looms was taxable from 28th February 1954 and that Messrs. Nalini Silk Mills being the alleged joint family firm should, therefore, arrange to give a complete account of art silk fabric manufactured by it from 28th February 1954 till the date of the receipt of the letter and should also maintain with immediate effect production account of all the said power looms in the prescribed forms. The alleged joint family firm was also required to submit an Application for taking out a licence and executing the necessary bond without any delay. It was stated in the letter that if the alleged joint family firm was aggrieved by this decision it may represent its case to the Assistant Collector of Central Excise, Baroda, within three months from the receipt of the letter. Dhirubhai as the sole proprietor of Nalini Silk Mills accordingly preferred a representation dated 2nd August 1954 to the Assistant Collector of Central Excise pointing out that in view of the partition effected between the members of the joint family, none of them was liable to payment of excise duty from 20th April 1954 and that the view expressed by the Superintendent of Central Excise was, therefore, incorrect, but the Assistant Collector of Central Excise by his order dated 13th September 1954 stated that having regard to all the facts of the case, he did not see any reason to interfere with the decision of the Superintendent of Central Excise. Dhirubhai, Kirtikumar and Narendra thereupon each gave a notice under Section 80 of the Code of Civil Procedure to the Government of India and after the expiration of the period of the respective notice, each of them filed a suit against the Union of India claiming a declaration that he was the owner of the power looms which came to his share as a result of the partition effected on 20th April 1954 and that such power looms being less than 25, the art silk fabric manufactured by him on such power looms was not liable to excise duty and an injunction restraining the Union of India from 'recovering excise duty in respect of art silk fabric manufactured by him on such power looms with effect from 20th April 1954. 2. The Union of India resisted the suits on various grounds of which two were of a preliminary nature. The first was that the suits were barred under Section 40(1) of the Act and the second was that the Court had no jurisdiction to entertain the suit inasmuch as the question whether the art silk fabric manufactured on the said 64 power looms was liable to excise duty or not was within the exclusive jurisdiction of the authorities under the Act and the jurisdiction of the civil Court in respect of such question was barred by necessary implication. On merits the Union of India disputed the factum of partition and urged that the memorandum of partition which was relied on for the purpose of establishing the partition was not admissible in evidence since it did not bear proper stamp and was not registered. The Union of India also contended that the partition was not a valid partition since it was entered into with a view to circumvent the provisions of the Act and, therefore, despite the alleged partition, the said 64 power looms continued to remain as one unit for the purpose of the applicability of the Act. On these contentions the Union of India submitted that the plaintiff in none of the suits was entitled to the relief claimed by him and that the suits were liable to be dismissed.

3. The learned trial Judge who tried the suits accepted the case of the plaintiff in each suit and negativing the preliminary objections of the Union of India held that the plaintiff in each suit was entitled to the declaration and injunction prayed for by him and accordingly granted the relief of declaration and injunction to the plaintiff in each suit. The Union of India thereupon preferred three appeals, one in each suit, challenging the decision of the learned trial Judge. The learned District Judge who heard the appeals agreed with the view taken by the learned trial Judge on all the points urged before him and dismissed the appeals. The learned District Judge on a consideration of the oral as well as documentary evidence on record came to the conclusion that the partition alleged by the plaintiffs was established and that the plaintiff in each suit carried on his own independent and separate business of manufacturing art silk fabric on the power looms allotted to him on partition with effect from 20th April 1954. The learned District Judge relied on the memorandum of partition in reaching this conclusion and in regard to the admissibility of the memorandum of partition he held that the memorandum of partition was not an instrument of partition but was merely a record of the partition effected on the previous day and it was, therefore, not required to be stamped as an instrument of partition nor was it required to be registered and it could not, therefore, be held to be inadmissible on the ground of want of proper stamp or registration. The learned District Judge negatived the plea of the Union of India that the partition was invalid because it was effected with a view to circumventing the provisions of the Act and pointed out that it was quite proper and legal for the plaintiffs to have effected the partition if by doing so they could legitimately avoid the incidence of excise duty. The learned District Judge also rejected the preliminary objections of the Union of India and held that the Court bad jurisdiction to entertain the suits and that the suits were not barred by Section 40(1) of the Act. The learned District Judge accordingly held that the plaintiff in each suit being the owner of the power looms allotted to his respective share and such power looms being less than 25, the art silk fabric manufactured by him on such power looms was not liable to excise duty under Item 12A of the First Schedule to the Act and in the result he confirmed the decrees passed by the learned trial Judge granting the reliefs of declaration and injunction prayed for by the plaintiff in each suit. The Union of India thereupon preferred three Second Appeals in this Court. These three appeals involve identical questions of law and it would, therefore, be convenient to dispose them of by a common judgment.

4. The main question that was debated before me on behalf of the appellant was as to the jurisdiction of the civil Court to entertain the suits. The argument in favour of exclusion of jurisdiction of the civil Court was advanced under two heads. The first head of the argument was that the suits were barred under Section 40(1) which provides:

40. (1) No suit shall lie against the Central Government or against any officer of the Government In respect of any order passed in good faith or any act In good faith done or ordered to be done under this Act.

But this section applies to suits for damages and compensation in respect of acts or orders under the Act and it has no application to suits like the present where the relief sought is not damages or compensation in respect of an act or order passed by an officer under the Act but a declaration that the goods manufactured by the plaintiff are not excisable goods to which the provisions of the Act apply and no excise duty is, therefore, leviable on such goods. The decision of the Supreme Court on the similarly worded Section 18 of the Madras General Sales Tax Act, 1939, in Provincial Government, Madras v. J.L. Basappa A.I.R. 1954 S.C. 1873 completely supports this construction of the section. The argument under this head is, therefore, wholly devoid of merit and must be rejected.

5. The argument under the second head was that the jurisdiction of the civil Court to entertain the suits was excluded by reason of the provisions enacted in Sections 35 and 36. It was contended on behalf of the appellant that a new liability of excise which did not exist at common law was created by the Act which at the same time gave a special and particular remedy in Sections 35 and 36 and this remedy given in Sections 35 and 36, therefore, excluded the common law remedy in the civil Courts. The appellant thus sought to bring the case within the third class stated by Willis J., in Wolverhamption New Water Works Ltd. v. Hawkesford (1859) 6 C.B. (N.S.) 336: 'Where a statute creates a liablity not existing at common law and gives also a particular remedy for enforcing it with respect to that class, it has always been held that the party must adopt the form of remedy given by the statute'. It was also pointed out on behalf of the appellant that Section 35(2) attached finality to every order passed in appeal under Section 35(1), subject to the power of revision conferred by Section 36 and this finality was necessarily a finality against determination of the same question by the civil Court and the jurisdiction of the civil Court to entertain such question was, therefore, clearly excluded. The question raised in the suits, the appellant submitted, was a question within the jurisdiction of the Excise Officers under the Act and the Rules and was in fact decided by the Superintendent of Central Excise by his order dated 28th July 1954 and in appeal by the Assistant Collector of Central Excise by his order dated 13th Septmber 1954 and the civil Court had, therefore, no jurisdiction to entertain the suits.

6. Now in every case where a question of exclusion of jurisdiction of the civil Court either expressly or by necessary implication is raised, it must be decided in the light of the words used in the statutory provision on which the plea is rested, the scheme of the relevant provisions, their object and their purpose. It would, therefore, be desirable to refer to some of the relevant provisions of the Act and the Rules. Section 2(d) defines 'excisable goods' to mean goods specified in the First Schedule as being subject to a duty of excise and the definition also includes salt. Section 3(1) provides for levy of excise duty on excisable goods in the following words:

3. Duties specified In the first Schedule to be levied:

(1) There shall be levied and collected in such manner as may be prescribed duties of excise on all excisable goods other than salt which are produced or manufactured in India, as and at the rates, set forth in the First Schedule.

Section 6 empowers the Central Government, by notification in the Official Gazette, to provide that, from such date as may be specified in the notification, no person shall engage in the production or manufacture of any specified goods included in the First Schedule except under the authority and in accordance with the terms and conditions of a licence granted under the Act. Section 9 deals with offences and penalties and prescribes inter alia that whoever contravenes any of the provisions of a notification issued under Section 6 or evades the payment of any duty payable under the Act shall be punishable with imprisonment or fine or both. Section 33 confers power of adjudication of penalty and confiscation on certain specified Excise Officers. It says-

33. Power of adjudication: Whereby the rules made under this Act anything is liable to confiscation or any person is liable to a penalty, such confiscation or penalty may be adjudged-

(a) without limit, by a Collector of Central Excise;

(b) up to confiscation of goods not exceeding five hundred rupees in value and imposition of penalty not exceeding two hundred and fifty rupees, by an Assistant Collector of Central Excise:

Provided that the Central Board of Revenue may, in the case of any officer performing the duties' of any Assistant Collector of Central Excise, reduce the limits indicated in Clause (b) of this section, and may confer on any officer the powers indicated in Clause (a) or (b) of this section.

7. Section 34 provides that where confiscation is adjudged, the officer adjudging it shall give the owner of the goods an option to pay fine in lieu of confiscation. Then come Sections 35 and 36 which are strongly relied on behalf of the appellant and they run as follows:

35. Appeals: Any person deeming himself aggrieved by any decision or order passed by a Central Excise Officer under this Act or the rules made thereunder may, within three months from the date of such decision or order, appeal therefrom to the Central Board of Revenue or, in such cases as the Central Government directs, to any Central Excise Officer not inferior in rank to an Assistant Collector of Central Excise and empowered in that behalf by the Central Government. Such authority or officer may thereupon make such further inquiry and pass such order as he thinks fit, confirming, altering or annulling the decision or order appealed against:

Provided that no such order in appeal shall have the effect of subjecting any person to any greater confiscation or penalty than has been adjudged against him in the original decision or order.

(2) Every order passed in appeal under this section shall, subject to the power of revision conferred by Section 36, be final.

36. Revision by Central Government: The Central Government may on the application of any person aggrieved by any decision or order passed under this Act or the rules made thereunder by any Central Excise Officer, or by the Central Board of Revenue, and from which no appeal lies, reverse or modify such decision or order.

Section 37 confers rule-making power on the Central Government and in exercise of that power the Central Government has made the Central Excise Rules, 1944. Rule 9 provides, omitting portions immaterial:

9. Time and manner of payment of duty: (1) No excisable goods shall be removed, from any place where they are produced or manufactured until the excise duty leviable thereon has been paid at such place and in such manner as is prescribed in these Rules or as the Collector may require, and except on presentation of an application in the proper form and obtaining the permission of the proper officer on the form:

xx xx xx xx(2) If any excisable goods are, in contravention of Sub-rule (i) deposited in, or removed from, any place specified therein, the producer or manufacturer thereof shall pay the duty leviable on such goods upon written demand made by the proper officer, whether such demand is delivered personally to him, or is left at his dwelling house, and shall also be liable to a penalty which may extend to two thousand rupees, and such goods shall be liable to confiscation.

Rule 49(1) declares inter alia that payment of duty shall not be required in respect of excisable goods made in factory until they are about to be issued out or place or premises specified under Rule 9 and Rule 52 provides for clearance of excisable goods on payment of excise duty in the following terms:

52. Clearance on payment of duty: When the manufacturer desires to remove goods on payment of duty, either from the place or premises specified under Rule 9 or from a store-room or other place of storage approved by the Collector under Rule 47, he shall make application in triplicate (unless otherwise by rule or order required) to the proper officer in the proper Form and shall deliver it to the officer at least twelve hours (or such other period as may be elsewhere prescribed or as the Collector may in any particular case require or allow) before it is intended to remove the goods. The officer shall, thereupon, assess the amount of duty due on the goods and on production of evidence that this sum has been paid into the Treasury, or paid to the account of the Collector in the Reserve Bank of India or the State Bank of India, or has been despatched to the Treasury by money-order shall allow the goods to be cleared.

Rule 174 which is the next relevant rule for the purpose of the present appeals requires every manufacturer of excisable goods other than salt, which would include art silk fabric, to take out a licence and prescribes that such manufacturer shall not conduct his business in regard to such goods otherwise than by the authority, and subject to the terms and conditions of such licence. Rule 210 makes a breach of this rule punishable with penalty and confiscation.

8. It is clear from these provisions that if the goods manufactured by a manufacturer are excisable goods liable to excise duty, he cannot clear them without payment of excise duty and before clearing them, he would have to make an application to the proper officer for assessing the proper excise duty payable on the goods and he would be entitled to clear the goods only after making payment of the amount of excise duty so assessed. If he clears the goods without payment of the amount of excise duty due on the goods, he would reader himself liable to penalty and confiscation which would be in addition to his liability to pay the excise duty leviable on the goods on written demand made by the proper officer. This obligation not to clear the goods without payment of excise duty can obviously attach to a manufacturer only if he manufactures excisable goods liable to payment of excise duty. There can be no question of making an application to the proper officer for assessment of excise duty due on the goods if the goods are not excisable goods liable to payment of excise duty and equally there can be no question of any penalty or confiscation for removal of the goods without payment of excise duty when the goods are not excisable goods and there is no excise duty payable on them. There would also in such a case be no need to obtain any licence for the purpose of carrying on business of manufacturing the goods. It is, therefore, a basic and fundamental postulate of the scheme of the Act and the Rules that the goods are excisable goods liable to payment of excise duty. If the goods are not excisable goods, none of the provisions of the Act or the Rules would apply in relation to such goods. It is in the context of this background that we must examine the question of exclusion of the jurisdiction of the Civil Court to entertain a suit of the nature of the present suits.

9. Now it was pointed out by the Supreme Court in Firm of Illuri Subhayya Chhetty and Sons v. State of Andhra Pradesh : [1963]50ITR93(SC) that the exclusion of the jurisdiction of the civil Court is not to be readily inferred and that even if a provision giving the orders a finality is enacted, civil Courts still have jurisdiction to interfere where fundamental provisions of the statute are not complied with, or where the statutory Tribunals do not act in conformity with the fundamental principles of judicial procedure. Gajendragadkar J., as he then was, speaking for the Court on that occasion summed up the law as follows:

In dealing with the question whether Civil Courts' jurisdiction to entertain a suit is barred or not, it is necessary to bear in mind the fact that there is a general presumption that there must be a remedy in the ordinary civil Courts to a citizen claiming that an amount has been recovered from him illegally and that such a remedy can he held to be barred only on very clear and unmistakable indications to the contrary. The exclusion of the jurisdiction of civil Courts to entertain civil causes will not be assumed unless the relevant statute contains an express provision to that effect, or leads to a necessary and inevitable implication of that nature. The mere fact that a special statute provides for certain remedies may not by itself necessarily exclude the jurisdiction of the civil Courts to deal with a case brought before it in respect of some of the matters covered by the said statute.

Referring to the remarks of Lord Thankerton in Secretary of State v. Mask and Co., 67 Ind App. 222 at page 236 namely:.it is also well settled that even if jurisdiction is so excluded, the civil Courts have jurisdiction to examine into cases where the provisions of the Act have not been complied with, or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure the learned Judge observed at page 325 of the report:It is necessary to add that these observations, though made in somewhat wide terms, do not justify the assumption that if a decision had been made by a taxing authority under the provisions of the relevant taxing statute, its validity can be challenged by a suit on the ground that it is incorrect on the merits and as such, it can be claimed that the provisions of the said statute have not been complied with. Non-compliance with the provisions of the statute to which reference is made by the Privy Council must, we think, be non-compliance with such fundamental provisions of the statute as would make, the entire proceedings before the appropriate authority illegal and without jurisdiction. Similarly, if an appropriate authority has acted in violation' of the fundamental principles of judicial procedure, that may also (end to make the proceedings illegal and void and this infirmity may affect the validity of the order passed by the authority in question.

The observations were relied upon by the Supreme Court in the subsequent decision of Provincial Govt. Madras v. J.S. Basappa : [1964]5SCR517 . This case, which we shall briefly refer to as Basappa's Case is a little important for the decision of the Supreme Court in this case directly covers the determination of the question of jurisdiction raised in the present appeals and it is, therefore, necessary to examine a little closely the ratio of this decision.

10. One Basappa was assessed to sales-tax for the year 1944-45 under the Madras General Sales Tax Act, 1939, and a sum of Rs. 19, 983-2-2 was determined to be payable by him as sales-taxOut of this sum, according to Basappa, a sum of Rs. 1, 594-1-5 only represented tax on sales within the Province of Madras while all the remaining sales, he claimed, had taken place outside the Province of Madras. He accordingly contended that sales-tax was wrongly demanded from him in respect of these latter sales and filed a suit in the Court of the Subordinate Judge, Kumool, for refund of Rs. 11, 389-0-9 being the amount of tax alleged to have been illegally recovered by the Government in respect of such sales. The learned Subordinate Judge dismissed the suit on the question of limitation but on appeal the High Court of Madras took a different view on the question of limitation and decreed the suit of Basappa on the ground that some of the sales had taken place outside the Province of Madras and the levy of tax on the said sales was, therefore, illegal and since the legal and illegal levies were inextricably mixed up, the entire demand for tax was rendered illegal and void. The Government thereupon preferred an appeal to the Supreme Court and the main question debated before the Supreme Court was as to the jurisdiction of the civil Court to entertain the suit. The argument urged on behalf of the Government was that by reason of Sections 11 and 12 and particularly the provision enacted in Section 11 sub Section (4) the jurisdiction of the civil Court to entertain the suit was barred. Section 11 provided that an assessee objecting to an assessment made on him under the provisions of the Act may, within thirty days from the date on which he was served with notice of assessment, appeal to such authority as may be prescribed. The appeal shall be in the prescribed form and shall be verified in the prescribed manner. The appellate authority may, after giving the appellant an opportunity of being heard, pass such orders on appeal as such authority may think fit. Sub-section (4) of Section 11 provided that every order passed in appeal under that section by the appellate authority shall, subject to the powers of revision conferred by Section 12, be final. Section 12 declared that the Revenue Board may, in its discretion call for and examine the record of any order passed or proceeding recorded by any authority, officer or person under the provisions of the Act for the purpose of satisfying itself as to the legality or propriety of such order or as to the regularity of such proceeding and may pass such order as it thinks fit. It will be seen that Sections 11 and 12 enacted provisions substantially similar to those contained in Sections 35 and 36 of our Act. On the strength of these provisions it was contended on behalf of the Government that the remedy provided by these provisions excluded the jurisdiction of the civil Court and this conclusion, it was argued, was reinforced by the finality conferred on the appellate order, subject to revision, under Section 11(4) since such finality must necessarily be a finality against determination of the same question by the civil Court. This contention was, however, repelled by the Supreme Court and the Supreme Court upheld the jurisdiction of the civil Court to entertain the suit. Hidayatullah J., who delivered the judgment of the Court, after referring to the decision of the Supreme Court In Firm of Illuri Subhayya Chetty and Sons v. State of Andhra Pradesh, (supra) and citing the passage from the judgment of Gajendragadkar J. in that case which we have already quoted, summarized the law In these terms:

It was thus held that the civil Court's jurisdiction may not be taken away by making the decicion of a tribunal final, because the civil Court's jurisdiction to examine the order, with reference to fundamental provisions of the statutes, non-compliance with which would make the proceedings illegal and without jurisdiction, still remains, unless the statute goes further and states either expressly or by necessary implication that the civil Court's jurisdiction is completely taken away.

The learned Judge then proceeded to apply this test to the case before him and observed at page 1877:

Applying these tests, it is clear that without a provision like Section 18A in the Act, the jurisdiction of the civil Court would not be taken away at least where the action of the authorities is wholly outside the law and is not a mere error in the exercise of jurisdiction. Mr. Sastri says that we must interpret the Act in the same way as if Section 18A was implicit in it and that Section 18A was added to make explicit what was already implied. We cannot agree. The finality that statute conferred upon orders of assessment, subject, however, to appeal and revision, was a finality for the purposes of the Act. It did not make valid an action which was not warranted by the Act, as for example, the levy of tax on a commodity which was not taxed at all or was exempt. In the present case, the taxing of sales which did not take place within the State was a matter wholly outside the jurisdiction of the taxing authorities and in respect of such illegal action the jurisdiction of the civil Court continued to subsist. In our judgment the suits were competent.

There is a reference in this passage to Section 18A and it is, therefore, necessary to know the provision enacted in that section. That section barred the jurisdiction of the civil Court in very wide terms and it read as follows:

No suit or other proceeding shall, except as expressly provided in this Act, be instituted in any Court to set aside or modify any assessment made under this Act.

That section was, however, Introduced in the Madras General Sales Tax Act, 1939, by way of an amendment which came into force on 15th May 1951 and was, therefore, not in force at the date when the suit was filed by Basappa. The Supreme Court, therefore, pointed out that the question of exclusion of the jurisdiction of the civil Court had to be decided without reference to Section 18A and it was this circumstance which made a vital difference in the decision of the case and distinguished it from the earlier decision of the Supreme Court in Firm of Illuri Subhayya Chetty and Sons v. State of Andhra Pradesh (supra). The Case of Firm of Illuri Subhayya Chetty and Sons (supra) was decided under Section 18A and In view of that section the Supreme Court took the view that a suit by an assessee for recovery of a sum of money against the State on the ground that the said amount had been illegally recovered from him as sales-tax under the Act was barred but Section 18A had not yet been placed on the statute book when Basappa filed the suit and the Supreme Court, therefore, held that, unlike the suit of the Firm of Illuri Subhayya Chetty and Sons, the suit of Basappa was not barred and the civil Court had jurisdiction to entertain the same. The Supreme Court emphasized that the remedy provided by Sections 11 and 12 did not exclude the jurisdiction of the Civil Court to strike down 'an action which was not warranted by the Act, as for example, the levy of tax on a commodity which was not taxed at all or was exempt since such action was wholly outside the jurisdiction of the taxing authorities and the Civil Court's jurisdiction to examine action which was wholly outside the law could not be taken away except by a provision like Section 18A, The Supreme Court held that since the sales on which tax was levied by the taxing authorities were sales which took place outside the Province of Madras, the taxing of those sales was wholly outside the jurisdiction of the taxing authorities and the civil Court had, therefore, jurisdiction to question and set aside such illegal action of the taxing authorities. The present appeals before me are directly covered by this decision of the Supreme Court. Sections 35 and 36 of the present Act are, as pointed out above, substantially in the same terms as Sections 11 aad 12 of the Madras General Sales Tax Act, 1939. The remedy given by Sections 35 and 36 does not, therefore, exclude the jurisdiction of the civil Court where the action of the Excise Officers is wholly outside the statute, as for example, where the Excise Officers insist on compliance with the provisions of the Act or the Rules in case of goods which are not excisable goods and, therefore, not within the scope and ambit of the Act and the Rules. It is a fundamental postulate of the Act and the Rules that the goods should be excisable goods liable to payment of excise duty and the provisions of the Act and the Rules are applicable only in relation to such goods and. therefore, if the Excise Officers proceed to apply the provisions of the Act or the Rules to goods which are not excisable goods, such illegal action of the Excise Officers can always be questioned before a civil Court and in respect of such illegal action the jurisdiction of the civil Court would continue to subsist. The Act certainly confers finality on decisions or orders passed by Excise Officers under the Act or the Rules subject only to appeal and revision under Sections 35 and 36 but that is a finality for the purposes of the Act and as observed by the Supreme Court in Basappa's Case, it does not make valid an action which is not warranted by the Act, as for example, insistence on the levy of excise duty on goods which are not excisable goods or are goods exempt from payment of excise duty. In the present appeals the action of the Superintendent of Central Excise-confirmed by the Assistant Collector of Central Excise-in insisting that excise duty was payable on the art silk fabric manufactured on all the 64 power-looms and that the provisions of the Act and the Rules should be complied with in regard to such art silk fabric was wholly out side the jurisdiction of the Excise Officers, since by reason of the partition of the said 64 power-looms which partition as we shall point out was legal and valid, the art silk fabric manufactured on none of the said 64 power-looms fell within the category of excisable goods and the provisions of the Act and the Rules did not apply to such art silk fabric. The jurisdiction of the civil Court to entertain the present suits for a declaration that the art silk fabric manufactured by each of the plaintiffs on the power-looms which fell to his respective share did not constitute excisable goods and was, therefore, not liable to payment of excise duty at all under the provisions of the Act and the Rules was, therefore, not excluded.

11. Mr. B.R. Sompura on behalf of the appellant, however, relied on the decision of the Supreme Court in Kamala Mills Ltd. v. Bombay State : [1965]57ITR643(SC) and contended that having regard to this decision it must be held that the jurisdiction of the civil Court to entertain the present suits was barred. Since this decision of the Supreme Court was made the sheet-anchor of his argument by Mr B.R. Sompura, it is necessary to examine the ratio of this decision. The suit out of which this decision arose was filed by the plaintiffs to recover a sum of Rs. 65. 187-4-0 from the defendant on the ground that it had been illegally recovered by way of sales-tax on sales which were outside the State of Bombay and, therefore, not taxable under the Bombay Sales Tax Act, 1946, which was the relevant sales-tax law in force under which the assessment was made by the sales-tax authorities. The jurisdiction of the civil Court to entertain the suit was challenged on behalf of the defendant on the ground that the suit called in question the assessment made by the sales-tax authorities under the Act which was precluded by Section 20 of the Act. Section 20 was in the following terms:

20. Save as is provided in Section 23, no assessment made and no order passed under this Act or the Rules made thereunder by the Commissioner or any person appointed under Section 3 to assess him shall be called into question in any civil Court, and save as is provided in Sections 21 and 22, no appeal or application for revision shall lie against any such assessment or order.

The Supreme Court upheld the claims of the defendant and held that the jurisdiction of the civil Court to question the assessment was barred by the express words of Section 20. The Supreme Court rejected the contention of the plaintiffs that the assessment made by the sales-tax officers was not protected under Section 20 since the sales in question were outside State sales and were, therefore, not taxable under the Act and the assessment in respect of such sales was therefore, beyond the jurisdiction of the sales-tax officers and could not be said to be an assessment made under the Act. The Supreme Court held that the sales-tax officers bad jurisdiction under the Act to determine the character of the sales and to decide whether the sales were taxable or not and even if the sales-tax officers erroneously decided that the sales were taxable and on that footing assessed the sales to tax, the assessment could not be said to be an assessment without jurisdiction: it was still an assessment made under the Act and it, therefore, enjoyed the immunity provided by Section 20. Mr. B.R Sompura, leaned heavily on this decision and contended on the analogy of this decision that the determination of the question whether any particular goods were excisable goods or not was entrusted by the Legislature to the jurisdiction of the Excise Officers and that the jurisdiction of the civil Court to go into that question was, therefore, barred. But I am afraid the analogy is not well-founded. The decision in Kamala Mills Case turned entirely on the construction of Section 20 for the only question with which the Supreme Court was concerned in that case was whether an assessment based on an erroneous finding about the character of the transaction was an assessment within or outside the purview of Section 20. The Supreme Court emphasised the wide words used in Section 20 and observed that 'the words used in this section are so wide that even erroneous orders of assessment made would be entitled to claim its protection against the institution of a civil suit' even though the result of such error be to tax a transaction exempt from tax. In our Act, however, there is no section similar to Section 20 on which rested the decision of the Supreme Court and the decision in Kamala Mills Case cannot, therefore, assist the argument of the Revenue. The determination of the question of exclusion of the jurisdiction of the civil Court in the present appeals must rest on the terms of Act before us and as observed by the Privy Council in Secretary of State v. Mask and Co. (supra) '...decisions on other statutory provisions are not of material assistance except in so far as general principles of construction are laid down'. It was on this very ground that the Supreme Court in Kamala Mills Case distinguished its earlier decision in Basappa's Case and pointed out that 'the determination of the question as to whether Section 20 bars the present suit must rest on the terms of Section 20 themselves because that is the provision under consideration' and decision on other statutory provisions cannot be of any material assistance in the determination of such question. Mr. B.R. Sompura cannot, therefore, successfully advance his case by relying on the decision in Kamala Mills Case. We may point out that the statutory provisions governing the determination of the present appeals are more akin to the statutory provisions in Basappa's Case than to the statutory provisions in Kamala Mills Case--in fact are substantially similar to the statutory provisions in Basappa's Case--and the decision in Basappa's Case rather than the decision in Kamala Mills Case would apply in the determination of the question as to exclusion of jurisdiction of the civil Court in the present appeals. There is nothing in the judgment in Kamala Mills Case which overrules either expressly or impliedly the decision in Basappa's Case or even casts any doubt upon it. The decision in Basappa's Case was referred to by the Supreme Court in Kamala Mills Case without any disapproval and it was distinguished on the ground that at the relevant date the Madras General Sales Tax Act, 1939, did not contain Section 18A, which came into force on 15th May 1951. The Supreme Court pointed out that if Section 18A bad been on the statute book at the material time, the case would have been decided in the same manner as Firm of IIluri Subhayya Chetty & Sons' Case (supra). The Supreme Court thus justified, the decision in Basappa's Case by pointiag out that that decision was based on the fact that the Madras General Sales Tax Act, 1939, at the relevant time did not contain Section 18A and observed that decision could not assist the argument of the assessee where the Bombay Sales Tax Act, 1946, which was in substantially the same terms as Section 18A of the Madras General Sales Tax Act, 1939. The present appeals therefore clearly fall within the ratio of the decision in Basappa's Case and not within the ratio of the decision in Kamala Mills Case and following the decision in Basappa 's Case, we must hold that the civil Court had jurisdiction to entertain the present suits.

12. Turning to the merits of the case, the next question that arises for consideration is whether there was a legal and valid partition of the said 64 power-looms amongst the respondents in the present appeals for it is evident that if there was a legal and valid partition as alleged by the respondents, each respondent became the owner of the power-looms allotted to his respective share from 20th April 1954 and such power-looms being less than 25, the art silk fabric manufactured by each respondent on such power-looms did not fall within the category of excisable goods and was not liable to payment of excise duty. Now these being Second Appeals, Mr. B. R. Sompura on behalf of the appellant could not challenge the factum of the partition but he urged that the partition was not legal and valid and the excise authorities were, therefore, entitled to proceed as if no partition had taken place and the respondents continued joint in respect of the said 64 power-looms. He contended that in the partition respondent No. 1 who was then a minor was represented by one Gajanan Joshi who was neither a de jure nor a de facto guardian of respondent No. 1 and the partition was, therefore, void and even after attaining majority, respondent No. 1 could not validate the partition by ratifying it since ratification can only be of an act which could have been performed by the principal at the date of the act and in the present case respondent No. 1 being a minor at the date of the partition, could not validly agree to the partition. Now it is undobtedly true that a minor has no capacity to contract and no person who does not possess authority either under the law of contract or under the personal law applicable to the minor to make a contract on his behalf can bind the minor by a contract and such a contract would be wholly void not only qua the minor but also qua other parties to the contract including those sui juris. Pratap Singh v. Sant Kumar : Manu Pande v. Musammat Sukhalalia A.I.R. 1958 Patna 78 and Mohammad Ahmed v. Vakil Ahmed : [1952]1SCR1133 . But this principle has no application to a case of partition. A partition by agreement though entered into during the minority of a coparcener is binding on the minor unless it is unfair or prejudicial to his interests. If the partition is unfair or prejudicial to the Interests of the minor, he may, on attaining majority, avoid the partition by having it set aside by appropriate proceedings so far as regards himself but until that happens, the partition would be valid and binding. Mulla's Hindu Law page 480, Article 308, Paragraph 2. Now the question whether a partition is unfair or prejudicial to the interests of the minor is essentially a question of fact and it cannot be raised for the first time in second appeal. It is, therefore, not possible for me sitting as a Second appellate Court to entertain the argument that the partition effected amongst the respondents was unfair or prejudicial to the interests of respondent No. 1 when I find that it was not raised either in the Court of first instance or in the first appellate Court. Moreover the partition is in fact not unfair or prejudicial to the interests of respondent No. 1 since under the partition respondent No. 1 has been allotted 24 power-looms as against 18 power-looms allotted to the share of the father and 22 power-looms allotted to the share of the major brother. Furthermore, even if the partition were unfair or prejudicial, respondent No. 1 alone could avoid it and here It is apparent that respondent No. 1 instead of avoiding the partition on attaining majority has actually affirmed it and sought relief in his suit on the basis of it. It may also be noted that under Hindu Law the father has the right to effect a partition of the joint family properties amongst himself and his sons without the consent of the sons and a fortiorari he can do so even if one of the sons is a minor. The only limitation on this power of the father is that he must give his sons equal shares as himself and this limitation is not violated in the present case since the father gave to respondent No. 1 and his other major son greater shares than what he himself took. Mulla's Hindu Law, page 493, Article 323. The partition must, therefore, be held to be legal and valid and effective so as to divide the said 61 power-looms amongst the respondents in the shares set out in the memorandum of partition and the present contention on behalf of the Revenue must be rejected.

13. Then it was contended by Mr. B.R. Sompura on behalf of the revenue that the present suits were not maintainable since there was no prayer in the plaints for setting aside the decision contained in the letter of the Superintendent of Central Excise dated 28th July 1954 and the decision of the Assistant Collector of Central Excise in appeal contained in the order dated 13th September 1954. But this contention is without force. In the first place these decisions of the Superintendent of Central Excise and the Assistant Collector of Central Excise are not decisions given in exercise of any power conferred on these respective officers under the Act or the Rules. It is clear from the provisions of the Act and the Rules which we have set out above that the proper officer can assess the amount of excise duty on the excisable goods when an application is made to him by the manufacturer for the purpose of clearing the goods on payment of excise duty and he can also demand the amount of excise duty leviable on the excisable goods where they are cleared without payment of the proper excise duty but there is no provision in the Act or the Rules-at least none could be pointed out by the learned advocate appearing on behalf of the appellant though a specific inquiry was made by me in that behalf in the course of the arguments-under which he can determine before the clearance of the goods that they are liable to excise duty where the manufacturer does not admit them to be liable to excise duty and does, not make an application for clearing them on payment of excise duty. There is also no provision in the Act or the Rules which empowers an Excise Officer to determine except in a proceeding for adjudication of penalty and confiscation under Rule 210 that a manufacturer is liable to obtain licence for carrying on business of manufacturing the goods. It would not, therefore, be possible to regard the decision of the Superintendent of Central Excise dated 28th July 1954 as a decision or order under the Act or the Rules so as to be appealable under Section 35 and equally it would not be possible to regard the decision of the Assistant Collector of Central Excise dated 13th September 1954 as a decision or order given in appeal within the meaning of Section 35. These decisions of the Superintendent of Central Excise and the Assistant Collector of Central Excise not being given under any provision of the Act or the Rules do not require to be set aside for the purpose of awarding the reliefs claimed by the respondents. Secondly, these decisions are, in any event, as pointed out above, wholly outside the statute inasmuch as they seek to levy excise duty on goods which are not excisable goods at all and it is, therefore, not necessary to set aside these decisions in order to grant relief to the respondents. These decisions being wholly void do not stand in the way of the respondents getting the relief claimed by them and the respondents are, therefore, entitled to succeed even without seeking relief of setting aside these decisions.

13.1 Mr. B.R. Sompura on behalf of the revenue also contended that the letter of the Superintendent of Central Excise dated 28th July 1954 was issued only against the father and that the father alone had, therefore, a cause of action and not the sons and the suits filed by the sons were, therefore, in any event misconceived. This contention is also, I am afraid, wholly fallacious in that it overlooks the fact that the letter of the Superintendent of Central Excise dated 28th July 1954 is addressed to the Nalini Silk Mills on the footing that the Nalini Silk Mills still continues to be the joint family concern of the father and the sons and, therefore, the decision contained in that letter affects not only the father but also the sons and if the father has a cause of action, equally the sons also have a cause of action to have it declared that the said 64 power looms which were till 20th April 1954 being operated by the joint family ceased to be joint family assets from 20th April 1954 and, therefore, the art silk fabric manufactured on the said 64 power-looms from and after 20th April 1954 did not fall within the category of excisable goods and did not, therefore, attract excise duty.

14. These were all the contentions urged before me and since in my view there is no substance in them, the present appeals fail and must be dismissed with costs.


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