1. This is a Second Appeal preferred against the decree and judgment of the learned District Judge of Coimbatore in A.S. No. 313 of 1954 reversing the decree and judgment of the learned Subordinate Judge of Coimbatore in O.S. No. 185 of 1953.
2. In regard to an assessment under the Madras General Sales Tax Act, the appellant has been challenging the levy of the same on the ground that it was taxation of sales outside the State of Madras, and offending against Article 286 of the Constitution and Section 22 of the General Sales Tax Act which incorporates Article 286(2) of the Constitution and was illegal. This contention was upheld by the trial Court and on the ground that the assessment was bad on the foot just now mentioned and the suit of the plaintiff was decreed. On appeal the learned District Judge held that the assessment could be supported on the ground that there was no evidence in the case to show that the purchasers of the goods now in question did not purchase them for export outside the State, and he left open the other question whether the suit is or is not maintainable by reason of Section 18-A of the General Sales Tax Act. That section provides that no suit or other proceedings shall, except as expressly provided under this Act, be instituted in any Court to set aside or modify any assessment under this Act. Therefore he allowed the appeal by the State. The defeated assessee has preferred this Second Appeal.
3. Under Section 9 of the Code of Civil Procedure, Civil Courts have jurisdiction to try all suits of a civil nature excepting suits of which their cognizance is either expressly or impliedly barred; Suraj Narain v. Jamil : AIR1946Pat385 , Jagannatha v. Kutumbarayudu I.L.R. Mad. 21. State of Bombay v. Adamjee : AIR1951Cal147 and Valli Ammal v. Corporation of Madras : (1912)23MLJ531 . Section 18-A of the Madras General Sales Tax Act withdraws from the purview of the civil Courts suits for setting aside or modifying assessments made under the said Act.
4. The plaint states that the order passed by the Deputy Commissioner is illegal and ultra vires and not sustainable on the merits of the case, as also the orders of the Sales Tax Officers. This cannot be agitated in a civil Court and the decision of the Privy Council in Raleigh Investment Co. Ltd. v. Governor General in Council (1947) 2 M.L.J. 16 : (1947) F.L.J. 45 : 1947 F.C.R. 59, furnishes the answer. The Judicial Committee held that an assessment made under the machinery provided by the Act is not a nullity, like an order of Court lacking jurisdiction. Reliance of such a provision is not an excess of jurisdiction, but a mistake of law made in the course of its exercise, and the suit is in truth directed exclusively to set aside or modify 'an assessment made under the Act' and hence it is not maintainable. Their Lordships further pointed out that the circumstances that the assessing officer had taken into account an ultra vires provision of the Act is, in this view, immaterial in determining whether the assessment is made under the Act. The phrase describes the provenance of the assessment and does not relate to its accuracy in point of law. The use of the machinery provided by the Act, not the result of that use, is the test. It is apparent that where the form of prayer did not use the very words but the substance is clear that a modification or setting aside the assessment is sought for, the plaintiff-assessee has to seek the remedy provided under Section 11 and 12 to 12-D of the Act, which is a self-contained Act and prescribes a special machinery for the redress of the grievance. Therefore, the declaration sought for in this case cannot be regarded as having any relevancy except as leading up to the claim for repayment. Therefore, the learned advocate for the appellant has not succeeded in taking this case out of the purview of the hierarchy of tribunals constituted for this purpose under the Madras General Sales Tax Act which is a self-contained and comprehensive legislation which enables an assessee to question the assessment imposed on him. Hence a person who is dissatisfied with the assessment and seeks to set it aside or modify cannot go before the civil Court; but it will be open to him to raise before the Civil Court only these pleas which these authorities under the Act are precluded from entertaining; Public Prosecutor v. Ramalingam Pillai (1958) 2 M.L.J. 243.
5. There is no doubt that in this case the assessment was perfectly valid before the coming into existence of the Constitution. It is equally clear that after the coming into existence of the Constitution this levy of assessment on sales outside the State would be certainly illegal. But the transactions in this case relate to 1950-51. In this connection the learned advocate for the Government points out that by reason of the Sales Tax Continuance Order, 1950, published in the Gazette of India (Extraordinary) dated 26th January, 1950, any tax on the sale or purchase of goods which was being lawfully levied by the Government of any State immediately before the commencement of the Constitution of India shall continue to be levied, notwithstanding that the imposition of such tax is contrary to the provision contained in Clause (2), Article 282, of the Constitution.
6. That these sales are saved from illegality by reasons of the Sales Tax Continuance Order, 1950, has been upheld in two reported cases, namely, the East India Match Factory v. State of Madras (1954) 2 M.L.J. 585 : 5 S.T.C. 269, where it is pointed out that if Article 286(2) applied, the President's Order issued thereunder justified the levy of the tax by the State of Madras up to 31st March, 1951. In Vedupalli Satyanarayana Murthy v. State of Madras (1955) 6 S.T.C. 405, it was held that if the sales fell within Article 286(2) they would be liable to tax under the Sales Tax Continuance Order, 1950, of the President made thereunder.
7. I have dealt with these two points in two recent decisions : Palaniswami Nadar v. State of Madras S.A. No. 1186 of 1955, and Indian Drugs Co., Tuticorin v. State of Madras S.A. No. 818 of 1956.
8. This Second Appeal fails and is dismissed but in the circumstances without costs.