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B. Kanniah Prasad Vs. the Deputy Commercial Tax Officer and anr. - Court Judgment

LegalCrystal Citation
SubjectConstitution
CourtChennai High Court
Decided On
Case NumberWrit Appeal No. 99 of 1961
Judge
Reported inAIR1964Mad311; [1964]15STC63(Mad)
ActsConstitution of India - Article 226; Madras General Sales Tax Act
AppellantB. Kanniah Prasad
RespondentThe Deputy Commercial Tax Officer and anr.
Appellant AdvocateK. Parasaran, Adv.
Respondent AdvocateAddl. Govt. Pleader
DispositionAppeal dismissed
Cases ReferredHimatlal v. State of M. P.
Excerpt:
.....statute would render the assessment legal, if it was otherwise without jurisdiction. finally, the learned judge thought, that the petitioner failed to take the obvious steps open to him and he has been guilty of considerable delay in resorting to this court. ), it is a well settled proposition of law, laid down in precedents too numerous for citation and analysis, here that a party seeking; if he is so guilty, this court may decline to exercise the jurisdiction in his favour, though it may be that, from] the strictly legal point of view, a good case existed for the exercise of such jurisdiction, had the party been dillgent. quite apart from the failure to prefer a statutory appeal, the delay in this case has been considerable! it is not necessary for us to discuss the principles laid..........and being guilty of such laches, as would disentitle him to that relief, a different view would be taken in appeal only where the facts; rely and abundantly establish the justification for the delay, or the necessity for condo nation of the laches; that is for the simple reason that the exercise of writ jurisdiction is a discretionary power; and a petitioner does not approach the court as a matter of a vested right, irrespective of his own conduct. with these observations,. we entirely concur in the view of the learned judge (ramachandra iyer j.) and dismiss the writ appeal there will be no order as to costs.
Judgment:

Anantanarayanan, J.

1. This appeal is instituted by the assesses under the Madras Sales tax Act, from the judgment 'of Ramachandra Iyer J. (as he then was) in W. P. No. 737 of 1959, in which the learned Judge declined to exercise jurisdiction under Article 226 and dismissed the petition for the issue of a writ of prohibition. The broad facts are really not in dispute before us, and the crux of the matter is whether the learned Judge was justified in dismissing the writ petition on the grounds of unjustified delay and laches on the part of the petitioner.

2. The petitioner (appellant) is a merchant conducting trade in bamboos, as well as certain types of works contracts. On 9-3-1954 he was assessed upon a turnover of Rs. 2,89,023-13-3. Of this total turn-over, a part related to certain works contracts and amounted to Rs. 1,12,840-6-0. The rest related to turnover upon transactions of the bamboo trade, in. the usual course, and that is not. in dispute before us. Out of the total sum of Rs. 4560-0-9 payable as tax in respect of the assessment, a sum of Rs. 2277 is, again, not in dispute, being the assessment upon the admittedly taxable part of the turnover. The balance of Rs. 2238-6-0 relates to the tax upon works contracts undertaken by the petitioner (appellant) and, upon the principle of the decision of the Supreme Court in State of Madras v. Gannon Dunkerley and Co. Madras Ltd. : [1959]1SCR379 , this part of the law should be clearly unsustainable in law.

3. As we indicated earlier, the real point is whether the petitioner approached the court with due diligence, or whether he sought redress only after such unjustified delay and such laches on his part, as would entitle the court to decline to exercise the discretion vested in this court under Article 226 in his favour, by the issue of a writ of prohibition or other appropriate writ. The learned Judge (Ramachandra Iyer J. ) has pointed out that the assessee (appellant) was obviously content with the order of assessment, at any rate during the early stages of this matter as he did not avail himself of the opportunity of filing a statutory appeal Under Section 12-A of the Madras General Sales tax Act. This court delivered the judgment in Gannon Dunkerley and Co., Madras Ltd. v. State of Madras, 1955 1 Mad LJ 87 : AIR 1954 Mad 1130 on 5-4-1954. Admittedly, that put the assessed on notice concerning the untenable part of the turnover and assessment, and, normally, he should have sought redress under Article 226 with reasonable diligence after the delivery of this judgment. It is noteworthy that the time for the statutory appeal had expired only by about two days, when the aforesaid judgment in 1955 1 Mad L J. 87 : AIR 1954 Mad 1130 was delivered by this court, But the appellant did not act. On the contrary, he failed to act and took no steps to obtain redress till the year 1958, when he instituted W. D. No. 737 of 1958 before the learned Judge. It is this delay of practically four years which has led the Judge to decline to exercise his jurisdiction in favour of the appellant.

4. On behalf of the appellant, his learned counsel (Sri K. Parasaran) has again urged the same grounds in extenuation or explanation of the delay, which were urged before the learned Judge himself. The first was that with regard to subsequent periods of assessment, upon more or less the same basis, there was correspondence between the assessee and the department, and their appellant was led to believe that the decision of the Supreme Court might govern the matter. The second ground is that the Government have not taken coarcive steps for the collection, or even initiated such steps, till vary recently, and that since the tax is not collected, a writ of prohibition could appropriately issue, which is different from a writ of mandamus directing a refund of collected tax. But, as the learned Judge (Ramachandra Iyer J.) has rightly pointed out, if we may say so with respect, this court cannot be concerned with the particulars of this correspondence between the assessee and the Government for remitting a part of the tax, or for staying the hands of the collecting agency with regard to the tax for subsequent periods. As far as the present assessment is concerned, the appellant had a statutory right of appeal and should have first exhausted it. Even if this were to be condoned he should hare approached this court with due diligence for - relief under Article 226 after the delivery of the judgment by this court on 5th April 1954 in 1955 1 Mad Li 87 : AIR 1954 Mad 1130. Since no limitation is prescribed for the taking of coercive, steps by Government, the delay in initiating such steps will not help the appellant in any manner. In other words, upon the bare and patent, facts of the matter, it is impossible to rebut the inference that the appellant has been guilty both of considerable delay and laches on his part.

5. But there is a further argument based upon the Bench decision of this court in Rayalaseema Construction v. Dy. C. T. Officer, Madras, : AIR1959Mad382 , Rajagopalan and Balakrishna Aiyar JJ. That was also a case of an alleged illegal assessment, and the Bench observed that no degree of failure on the part of the assessee to pursue his statutory remedies under the taxing statute would render the assessment legal, if it was otherwise without jurisdiction. Hence, such an assessment will not become final under the taxing statute itself and when there is thus, a total want of jurisdiction a mere attempt to usurp jurisdiction could be restrained by the issue of an appropriate writ. We may also point out that the Bench reviewed the prior case law, including Raleigh Investment Co. v. Governor General in Council, 1947 2 Mad LJ 16 : AIR 1947 PC 78 and distinguished that case on the ground that it was an authority only for the proposition that a suit would not' lie to set aside or modify art assessment made under the Indian Income tax Act, The learned Additional Government Pleader brings it to our notice that am appeal has been filed from this Bench decision by the State before the Supreme Court, which is pending disposal. The result of that appeal might appreciably affect, the position whether, under such circumstances, of illegal levy, a court could exercise jurisdiction under Article 226 of the Constitution by the issue of an appropriate writ, even though the affected party has not pursued his statutory remedies, the assessment itself has become final, and the affected party has, further, been guilty of laches, and delay in approaching this court for redress. The learned Additional Government Pleader has also referred to Venkataraman and Co. v. State of Madras, : AIR1961Mad322 , but that really relates to the maintainability of a suit in the civil court Under Section 18-A of the Sales tax Act, 1939 when the turnover of works contracts could have been decided under the, provisions of the Act itself by the High Court to proceedings under Section 12-B; the decision therefore may not be of any direct significance or relevance. Learned counsel for the appellant has cited Himatlal v. State of M. P., : [1954]1SCR1122 in support of his proposition that where a levy is made without the authority of law, and in impairment of fundamental rights, relief by way of a writ of mandamus could be granted as the appropriate relief. But it has to be pointed out that this does not really touch the question of ladies and or delay, which is the main issue now before us.

5a. Our attention has also been drawn to three unreported decisions of learned single Judges of this Court all of them having some relevance in this context. Of these, we might first refer to the judgment of Veeraswami J. in W. P. Nos. 291, 458, 459 etc. of 1961 (Mad), before the learned Judge, a large batch of proceedings dealt with by means of a common judgment In these cases, the question did arise with regard to delay and laches, and the extent to which a party would be thereby disentitled to relief under Article 226 of the Constitution. The learned Judge thought that, upon the facts of that particular case, the delay was not so material. He observed that Section 18-A of the Madras General Sales Tax Act, 1939 barred a suit, and that the State could not, with propriety, claim that a suit did not lie, and at the same time plead that the remedy of the assesses roust be held to have been barred by limitation. The learned Judge added

'I am not prepared to deny relief to the petitioners merely on the ground that they have come to this court somewhat belatedly'.

To the extent to which it goes, this judgment is in favour of the petitioner (appellant).

6. The other two unreported decisions are definitely against the appellant. In W. P. Nos. 972 to 974 of 1960 (Mad), Srinivasan J. had occasion to deal with a very similar case relating to turnover upon works contract, and the right to claim a refund upon an alleged illegal levy. The learned Judge cited and set forth a passage from the judgment of Ramachandra Iyer, J. now under appeal before us, and also referred to another petition for the issue of a writ of mandamus. Finally, the learned Judge thought, that the petitioner

'failed to take the obvious steps open to him and he has been guilty of considerable delay in resorting to this court.'

The learned Judge declined to exercise jurisdiction under Article 226 of the Constitution in favour of the petitioner. In W. P. No. 966 of I960 (Mad) Veeraswami J. had again occasion to consider a very similar situation for the issue of a writ of mandamus directing a refund, and the same judgment now under appeal has been referred to, and the passage therefrom cited and set forth. Finally, the learned Judge concluded that the facts were almost ad idem with the present case, and that the considerable delay and laches disentitled the petitioner to the exercise of discretion in his favour.

7. We have very carefully considered this matter, and, in particular, the arguments of learned counsel for the appellant (Sri K. Parasaran) attempting to extenate the delay and laches upon special grounds. These arguments are not convincing and we have to reject them for the very same reasons as those furnished by the learned Judge (Ramachandra Iyer, J.), It is a well settled proposition of law, laid down in precedents too numerous for citation and analysis, here that a party seeking; the exercise of jurisdiction under Article 226 in his favour,. must exhibit due diligence, must not delay in any unconscionable manner, and must not be, guilty of laches. If he is so guilty, this court may decline to exercise the jurisdiction in his favour, though it may be that, from] the strictly legal point of view, a good case existed for the exercise of such jurisdiction, had the party been dillgent. The situation in our view is not really affected.; by the question whether the party did or did not exhaust his departmental remedies, as provided for under the Madras General Sales Tax Act. Quite apart from the failure to prefer a statutory appeal, the delay in this case has been considerable!, and not extenuated by any factor that! could be pleaded in favour of the appellant. Again, we are not now really concerned with the propriety of the dicta laid down in the Bench decision in : AIR1959Mad382 , said to be pending in appeal before the Supreme Court. It is not necessary for us to discuss the principles laid down therein, relating to the levy an initio illegal, and the extent to which it could or could not be affected by the assessment becoming final as far as the taxing statute was concerned, or the failure of the aggrieved party to pursue a departmental remedy. . All this apart, no party has a right to approach this court; and to demand the exercise of jurisdiction under Article 226 in his favour, whatever the merits of his case, unless he has exhibited due diligence, or, if there has been undue delay, he is able to explain or account for it in a convincing manner. We do not think it necessary to make any comment upon what would happen even if the decision in : AIR1959Mad382 ,. foe reversed or modified in appeal; it may or may not be that, by virtue of such result, the; appellant might or might not be in a position to claim a refund in our course, if the tax be collected by coercive process or otherwise. The question of the situation them being affected by res judicator, by virtues of our present decision, is obviously on upon which we can express no immediate view, nor is any such view called for. Finally, we may point out that when a learned Judge of this court has been convinced, after a scrutiny of the particular facts, that a petitioner who seeks to obtain relief under Article 226 of the Constitution at the hands of this court has done so in such belated manner, and being guilty of such laches, as would disentitle him to that relief, a different view would be taken in appeal only where the facts; rely and abundantly establish the justification for the delay, or the necessity for condo nation of the laches; that is for the simple reason that the exercise of writ jurisdiction is a discretionary power; and a petitioner does not approach the court as a matter of a vested right, irrespective of his own conduct. With these observations,. we entirely concur in the view of the learned judge (Ramachandra Iyer J.) and dismiss the writ appeal There will be no order as to costs.


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