1. The plaintiff who has lost in both the courts below, has preferred this second appeal in so far as he could not get a declaration or injunction that the Central Excise Authority had wrongly levied duty on him and further that he was not liable for any duty. He is a tobacco merchant dealing in unmanufactured tobacco for which he holds licence issued under the Central Excises and Salt Act, 1944, briefly referred to herein as the Act. The said licence does not prohibit him in dealing with manufactured products like tobacco packets, pani tobacco etc. He was also dealing in manufactured tobacco viz. pani tobacco, etc. for which no licence or accounts is required under the law of Central Excise that he is not a manufacturer of such pani tobacco. On or about 15th July, 1966, the Central Excise authorities inspected his premises and cheeked the bill books maintained by him for the sale of pani tobacco for the period from 5th August, 1964 to 9th July, 1966. It was found, 10642 kgs. of pant tobacco had been sold by him. This quantity was not manufactured, but, was purchased from outside for sale. On this, it was concluded that the, said quantity of pani tobacco was manufactured by him and on that basis, it was calculated that the quantity of raw tobacco as 3547 kgs. for the manufacture of pani tobacco. On these materials, a show cause notice came to be issued by the Assistant Collector of Central Excise (Sivakasi, 3rd defendant) on 30th December, 1966, calling upon the plaintiff to show cause why he should not be assessed and penalty levied for having brought into his duty paid premises the non-duty paid tobacco without valid permit. That notice was duly replied. Not being satisfied with the explanation, the Assistant Collector passed an order raising a demand for a sum of Rs. 5,296.05, as central excise duty on 2675 kgs. of chewing tobacco under Rule 40 of the Central Excise Rules, 1944. An appeal was preferred to the Collector of Central Excise (second defendant) to modify and reduce the quantity to 2230 kgs. as non-duty paid tobacco. The revision to Government of India was also dismissed. Hence the present suit.
2. The basis of the suit is that the conclusion of the Central Excise authorities is illegal and erroneous and lacks evidence. The arrival at the quantum was arbitrary. There was no reasonable opportunity to peruse the records.
3. The defendants contesting the suit, stated that the suit had been filed with a view to escape the liability for the unlawful act of storing non-duty paid tobacco and manufacturing pani tobacco. When the premises of the plaintiff was inspected on 11th July, 1966, he had 425 kgs. of non-duty paid tobacco. The plaintiff confessed his guilt and paid a penalty of Rs. 100. Then again, on 15th July, 1966, 2105 kgs. of non-duty paid tobacco was also found and penalty was imposed. In addition to the forfeiture of that quantity, the bill books seized from the plaintiff on 15th July, 1966 showed a sale of 10642 kgs. of pani tobacco between the period from 5th August, 1974 to 9th July, 1976. There was no record to show that he has purchased the said quantity from other manufacturers. Therefore, it has been concluded that the said quantity had been clandestinely manufactured from out of the non-duty paid tobacco. Accordingly, the demand was raised and the assessment has been properly made. The other allegations that there is lack of evidence and that he having not been given proper opportunity to peruse the records, are denied.
4. The learned trial Munsif on a consideration of the facts of the case before him, found that the plaintiff did manufacture the pani tobacco and the assessment order was correct and therefore, dismissed the suit. On appeal, the learned Additional Subordinate Judge in A.S. No. 36 of 1974, confirmed this finding. Hence, the present second appeal.
5. Mr. Chengalvarayan, learned counsel for the Central Excise Depart-met, seeks the leave of the court to raise an objection about the maintainability of the suit. According to him, though this point had not been taken in the written statement, should the court be inclined to accept his contention, the second appeal can be disposed of on the short ground, more so when it relates to the jurisdiction of a civil court to try the suit. Accordingly, I permitted him notwithstanding the objection by the learned counsel for the appellant. It is the submission of Mr. Chengalvarayan that in effect and substance, what is questioned is the correctness or the legality of the assessment order which had been subject to an appeal and a further revision to the Government of India. Having regard to the finality as contemplated under Section 35(2), the jurisdiction of civil court must be held to be barred. In support of this statement, reliance is placed on Dhulabhai v. State of Madhya Pradesh and Anr., : 3SCR662 .
6. In meeting this submission, learned counsel for the plaintiffs-appellants, would state that this is a case in which a non-excisable commodity had been wrongly taxed and therefore it must be held that the levy is without jurisdiction. In such a case, the ruling reported in the Provincial Govt. of Madras v. Dasappa, : 5SCR517 , must be held to be applicable. Therefore, according to him, the suit is perfectly maintainable.
7. It is a general principle of law that the ouster of jurisdiction of civil court should not be readily inferred. Such ouster is commonly found in all taxing statutes. Accordingly, Section 35(2) of the Act states :--
'Every order passed in appeal under this section shall, subject to the power to revision conferred by Section 36, be final'.
What exactly is meant by the finality is, obviously the jurisdiction of the civil court is excluded if the matter relates to the correctness or the validity of the assessment. In other words, so long as there is jurisdiction to assess, such an assesment may be right or wrong. That rightness or wrongness can be questioned only by taking up the matter in appeal or revision as provided under the Act. However wrong the assessment may be, that cannot form the subject matter of the civil suit. As a matter of fact, dealing with the jurisdiction of the civil court in matters relating to assessment, it was held in Dhula-bhai v. State of Madhya Pradesh, AIR S.C. 78, thus: --
'(1) Where the statute gives a finality to the orders of the special tribunals the civil court's jurisdiction must be held to be excluded if there is adequate remedy to do what the civil courts would normally do in a suit. Such provision, however, does not exclude those cases where the provisions of the particular Act have not been complied with or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure.
(2) Where there is an express bar of the jurisdiction of the court, an examination of the scheme of the particular Act to find the adequacy or the sufficiency of the remedies provided may be relevant but is not decisive to sustain the jurisdiction of the civil court. Where there is no express exclusion, the examination of the remedies and the scheme of the particular Act to find out the intendment becomes necessary and the result of the inquiry may be decisive. In the latter case, it is necessary to see if the statute creates a special right or a liability and provides for the determination of the right or liability and further lays down that all questions about the said right and liability shall be determined by the triburnals so constituted, arid whether remedies normally associated with actions in civil courts are prescribed by the said statute or not.
(3) Challenge to the provisions of the particular Act as ultra vires cannot be brought before Tribunals constituted under that Act. Even the High Court cannot go into the question on a revision or reference from the decision of the Tribunals.
(4) When a provision is already declared unconstitutional or the constitutionality of any provision is to be challenged, a suit is open. A writ of certiorari may include a direction for refund if the claim is clearly within the time prescribed by the Limitation Act but it is not a compulsory remedy to replace a suit.
(5) Where the particular Act contains no machinery for refund of tax collected in excess of constitutional limits or illegally collected, a suit lies.
(6) Questions of the correctness of the assessment apart from its constitutionality are for the decision of the authorities and a civil suit does not lie if the orders of the authorities are declared to be final or there is an express prohibition in the particular Act. In either case, the scheme of the particular Act must be examined because it is a relevant enquiry.
(7) An exclusion of the jurisdiction of the civil court is not readily to be inferred unless the conditions above set down apply.'
8. In this case, as seen from the narration of the facts, what is sought to be raised in the civil suit is not the lack of jurisdiction, but, only an improper assessment. Therefore, the jurisdiction of the civil court is undoubtedly excluded. In this view the decision in Provincial Govt of Madras v. Dasappa, : 5SCR517 does not afford any assistance to the appellant. In the result, the second appeal fails and is hereby dismissed, holding that the suit is not maintainable in a civil court. Therefore, in this view, I see no necessity to go into the merits relating to this second appeal. There will be no order as to costs.