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Kishinchand Chellaram and ors. Vs. Joint Commercial Tax Officer and ors. - Court Judgment

LegalCrystal Citation
SubjectSales Tax ;Excise
CourtChennai High Court
Decided On
Case Number Writ Petition Nos. 2927, 2928, 2934, 2935, 2956 to 2963, 2993 and 2994 of 1966 and 48, 50, 51, 60,
Judge
Reported in[1968]21STC367(Mad)
AppellantKishinchand Chellaram and ors.
RespondentJoint Commercial Tax Officer and ors.
Appellant Advocate V.K. Thiruvenkatachari, ;K.C. Jacob, ;S.K.L. Ratan, ;R. Vedantham, ;P. Viswanathan, ;R. Gopalaswami lyengar and ; D.B. Jagannatha Rao, Advs. ;The Adv.-General and ;the Special Government Pleader
Respondent Advocate S. Govind Swaminathan and ;G. Ramaswamy, Standing Counsel for the Central Government for the Central Government
DispositionPetition allowed
Cases ReferredRamavatar Budhaiprasad v. Assistant Sales Tax Officer
Excerpt:
- - it is also contended that with reference to the various enactments like the additional duties of excise (goods of special importance) act, 1957 (act no. its case is that man-made fibres like nylon, terylene, terene, dacron etc. in van nostrand's scientific encyclopaedia, second edition, 1947, at page 1002, nylon' is described as that which is silky in appearance, relatively insensitive to moisture, and of superior elastic recovery, better than silk. synthetic fibres are classifiable under cellulosic fibres and non-cellulosic fibres and nylon is said to belong to the group called synthetic protein-like fibres. it is therefore argued that the test of artificiality is fully satisfied. this has led to the development of a new type of industry under the general name 'petro-chemicals'.7......orderramaprasada rao, j. 1. in this batch of writ petitions, the main question arising for consideration is whether terylene, terene, dacron, nylon, nylex etc., would come within the expression ' artificial silk ' which occurs as item 4 in the third schedule to the madras general sales tax act, 1959, and therefore exempt from sales tax. main arguments were addressed in w.p. no. 2927 of 1966, and as the point for consideration in all the writ petitions in this batch is the same, we intend considering the respective contentions of the parties as urged before us in w.p. no. 2927 of 1966. it is not in dispute that notices, which were similar to those issued in w.p. no. 2927 of 1966, were issued to the other writ petitioners in this batch of petitions, and therefore we intend passing a common.....
Judgment:
ORDER

Ramaprasada Rao, J.

1. In this batch of writ petitions, the main question arising for consideration is whether Terylene, Terene, Dacron, Nylon, Nylex etc., would come within the expression ' artificial silk ' which occurs as item 4 in the Third Schedule to the Madras General Sales Tax Act, 1959, and therefore exempt from sales tax. Main arguments were addressed in W.P. No. 2927 of 1966, and as the point for consideration in all the writ petitions in this batch is the same, we intend considering the respective contentions of the parties as urged before us in W.P. No. 2927 of 1966. It is not in dispute that notices, which were similar to those issued in W.P. No. 2927 of 1966, were issued to the other writ petitioners in this batch of petitions, and therefore we intend passing a common order considering the contentions of the respective counsel for either side in the main W.P. No. 2927 of 1966.

2. The petitioner in this case has made the assessing officer as the 1st respondent, the State of Madras as the 2nd respondent, the Union of India as the 3rd respondent, the Central Board of Revenue as the 4th respondent, and the Collector of Central Excise as the 5th respondent. The petitioner's case is that on or about September, 1966, he was served with notices by the 1st respondent calling upon him to furnish particulars of sales turnover in Terylene cloths for the years 1961-62, 1962-63, 1963-64, 1964-65 and 1965-66. The notice recited that such particulars were required for purposes of revision of assessment for those years, as the turnover in Terylene cloths is taxable under the Madras General Sales Tax Act, 1959. The second notice is more telling in that it has included the reasons why the 1st respondent was issuing the said notice. In the second notice, the 1st respondent would have it that Terylene and Nylon fabrics are made from synthetic fabrics produced from chemicals and not from common natural bases, and therefore they do not come under any of the classes of goods specified in item 4 of the Third Schedule to the Madras General Sales Tax Act, 1959, which are exempt from tax under the Act. As the normal conclusion to be deduced from the above notices issued by the 1st respondent is that the 1st respondent as the assessing authority has already made up his mind to revise a closed assessment and impose a fresh impost on Terylene and other classes of goods on the foot that they are not exempt from taxation under the Madras General Sales Tax Act, the petitioner has come up with this writ petition under Article 226 of the Constitution of India for the issue of a writ of prohibition interdicting the 1st respondent from proceeding with the action proposed by him in the two notices as above. The petitioner contends that the goods in question are artificial silk, classifiable as artificial silk, and have been deemed and understood to be so in the trade, by Government and even by experts, and that, therefore, the decision unilaterally taken by the 1st respondent as if the goods are not covered by the expression 'artificial silk' is highly arbitrary. It is also contended that with reference to the various enactments like the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (Act No. 58 of 1957), the Central Excises and Salt Act, 1944, and the Central Sales Tax Act, 1956, these goods have been considered, understood and treated as artificial silk, and therefore the 1st respondent's attempt to bring such goods into the net of taxation, in spite of the exemption granted by the Act, is illegal. Reference was also made in particular to the stand of the Union Government which has consistently held that Terylene, Terene, Dacron, Nylon, Nylex etc., are artificial silk fabrics for purposes of excise duty. The petitioner urged that it is imperative on the part of respondents 1 and 2 to follow a uniform practice on a par with the Union Government and that they are obliged under Article 261 of the Constitution of India to provide full faith and credit for public acts done by the Union of India in the instant case. The petitioner's further case is that the scope of serial No. 4 of the Third Schedule to the Madras Act regarding the varieties and forms of textile is the same as the scope of the three items in the Central Excise enactments and referred to by him in his affidavit. The petitioner also states that if the State of Madras is allowed to levy sales tax on these goods, it would mean a levy of tax which the State had no authority to levy. To this the 1st respondent has filed a counter. His contention is that the goods in question are liable to tax under the provisions of the Madras General Sales Tax Act. He states that these goods do not come under the nomenclature of artificial silk. His main contention is that Terylene etc., belong to a class of synthetic man-made fibre which is neither cellulosic or non-cellulosic filament yarn. According to him, they belong to a class of polyamide or polyester group whose basic material is a petro-chemical and not a natural product. The 1st respondent therefore contends that the goods are not artificial silk. He also states that as the question involves a finding of a jurisdictional fact, which has to be determined only by the assessing authority, the petitioner cannot invoke the jurisdiction of this Court under Article 226 of the Constitution to find the same. He states that it is primary for the assessing authority to decide whether a particular transaction involves sale of artificial silk and that the onus is upon the petitioner to establish that the goods do come within the expression, ' artificial silk'.

3. The 2nd respondent, the State of Madras, in its affidavit supporting the 1st respondent, states that the State Government is not subjecting to tax any items of goods which are declared to be subject to the provisions of the Additional Duties of Excise (Goods of Special Importance) Act, 1957. It is submitted that the goods which are the subject-matter of these writ petitions are not artificial silk. The State Government also adds that the levy of additional excise duty on these types of goods would not invalidate the levy of sales tax by the State Government. It is open to the State Government in the event of the Union Government not agreeing on the interpretation to be placed on the entry in question, to forego a proportionate levy in respect of, the actual excise duty on the goods in question.

4. The 5th respondent, the Union of India, completely supports the petitioner. Its case is that man-made fibres like Nylon, Terylene, Terene, Dacron etc., are all considered as artificial silk and factually and technically the above products are textiles coming under the category of artificial silk. It categorically says that by virtue of the agreement between the State and the Central Government, the Centre is collecting the additional excise duty on these fabrics and distributing a portion of the same out of the Consolidated Funds to the State and that in respect of these fabrics the State cannot levy sales tax. It is on such pleadings the parties have addressed arguments. We should at the outset confess that the learned Advocate-General representing respondents 1 and 2 could only make cryptic arguments in answer to the detailed submissions by Mr. Thiruvenkata-chariar, learned counsel for the petitioners. Mr. Govind Swaminathan appearing for the Union of India supported the petitioner's case and contended that the products in question are classifiable as artificial silk and are assessable only as such.

5. Sri V. K. Thiruvenkatachariar took us meticulously through the views held by many authors, including that entertained by the trade, the Government, as also experts, who would uniformly opine that the products under consideration are ordinarily understood to be textiles and come within the descriptional nomenclature of 'artificial silk'. The primordial consideration in such circumstances to find the meaning of the words under review is what is the popular understanding of such words. If, according to this test and other standards as applied by the industry, by Governmental authorities and by the populace, the words in question cannot be taken out of the expression, 'artificial silk', then they have to be understood as such. Bearing in mind also the principle laid down by the Supreme Court in Commissioner of Sales Tax, Madhya Pradesh, Indore v. Jaswant Singh Charan Singh Civil Appeal No. 2011 of 1966, that the construction of words in a statute is to be adopted to the fitness of the matter of the statute, we shall now consider the materials placed before us which form the source of authority to find whether Terylene, Terene, Dacron, Nylon, Nylex etc., do come within the umbrage of artificial silk.

6. 'Artificial silk', according to the Oxford Concise Dictionary, Third Edition, 1934, means silk drawn by various processes out of viscid matter. In the Fifth Edition of the same dictionary of 1964, 'artificial silk' is explained as 'now known as rayon' and means thread or yarn made from cellulose. 'Silken' is explained as equivalent to soft, lustrous as silk. In the Shorter Oxford Dictionary, Third Edition, 1944, the meaning of 'Nylon' is given as 'proprietary name ; a synthetic fibre, similar to rayon'. Even so, 'Terylene' has been explained as meaning trade-name of a dress fabric derived from a linear polyester of terephthalic acid and ethylene glycol. In Van Nostrand's Scientific Encyclopaedia, Second Edition, 1947, at page 1002, 'Nylon' is described as that which is silky in appearance, relatively insensitive to moisture, and of superior elastic recovery, better than silk. In the Encyclopaedia Britannica, 1961 Edition, Volume 21, under the heading 'Synthetic fabric', we find that rayon is said to be one such man-made fibre or filament from cellulose (wood-pulp) which has some vegetable origin. Synthetic fibres are classifiable under cellulosic fibres and non-cellulosic fibres and Nylon is said to belong to the group called synthetic protein-like fibres. The name 'Nylon' which has been given to this group is defined as a generic term for any long chain, synthetic, polymeric amide which has recurring amide groups as an integral part of the main polymer chain, and which is capable of being formed into a filament in which the structural elements are oriented in the direction of the axis. The other fabrics with which we are concerned are also wholly synthetic. It is therefore argued that the test of artificiality is fully satisfied. Learned Advocate-General however contends that the basic constituent of the products under consideration is 'mineral oil' and not cellulosic or non-cellulosic material. This distinction and classification appears to us to be a distinction without a difference in so far as this case is concerned. 'Artificial silk' is now commonly understood as a generic term for man-made fibre or filament yarn. It would not very much matter, therefore, whether the textile under consideration has as its base a chemical or a natural product. The learned Advocate-General invited our attention to an article by Sri Humayun Kabir, the then Minister for Petroleum and Chemicals, Government of India, under the caption 'Petrochemicals'. Petro-Chemical industry, according to the learned exponent, is essentially a Second World War phenomenon. He adds:

Till the beginning of the Second World War, coal was the main basis for chemical industries. Since then, oil is gradually replacing coal, as raw materials obtained from oil resources are cheaper and more abundant. This has led to the development of a new type of industry under the general name 'Petro-Chemicals'.

7. The article continues :

All synthetic fibres begin with the preparation of a polymer which consists of extremely long chain-like molecules...

Synthetic fibres have been divided into several classes such as polyamides, polyesters, polyacrylics and polyvinylics according to their chemical nature...

Polyester fibre is useful in blending with wool and cotton. Its durability, its retention of crease and its blending properties make it extremely useful for textiles of various types.

8. In our opinion, this article cannot support the revenue at all. In fact, this supports the view that notwithstanding the base being mineral oil or a petro-chemical, yet synthetic fibres obtained by such adaptation are classified inter alia as polyester fibre, to which class Terylene belongs, even according to the Oxford Dictionary. Learned Advocate-General then invited our attention to another article under the caption 'Survey of Man-made Fibre Industry' by Dr. A. N. Kapur, Executive Director, National Research Development Corporation of India. The following excerpts therein are useful in the instant case :

Man-made fibres are classified in three major categories-cellulosic, non-cellulosic and mineral fibres.

Cellulosic fibres are viscose rayon and staple, acetate rayon and staple and cuprammonium rayon. Viscose rayon is the first man-made fibre and in terms of production and consumption is now the world's second fibre, cotton being the first. Nylon is the first organic synthetic fibre to be commercially produced... Terylene, Dacron etc... are the same chemically and the chemical base is polyethylene.

9. Even this learned author classifies mineral fibres also as synthetic fibres. Excepting that mineral fibre is one species of a genus, there appears to be no distinction whatsoever made between synthetic fibres belonging to one class or the other, having different bases for their manufacture. Thus, mineral fibre is as much a man-made synthetic fibre as any other man-made fibre.

10. We shall now consider the problem posed with reference to the several notifications issued by the Government officers and tribunals who are undoubtedly conversant with the subject-matter.

11. The Central Board of Revenue is of the opinion that nylon is artificial silk, and nylon fabrics will be assessable to duty as artificial silk fabrics. Vide Board's letter No. 5/1/56-CX. MI dated 1st February, 1956, printed in C.B.R's Bulletin for the period of January to March, 1956, at page 39. Even so, the Board will say that Terylene or Dacron fabrics are to be classified as artificial silk. Vide Board's letter No. 38/1/62 CX. II dated 24th January, 1962, printed on page 39 of the C.B.R's Bulletin for the period January to March, 1962. The Textile Commissioner, Bombay, as an officer of the Ministry of Commerce, Government of India, has clearly stated, apparently on enquiry, that 'Terylene, Terene and Dacron fabrics are manufactured from polyester synthetic fibres or filament yarn. Terylene, Terene and Dacron are the trade-marks of polyester fibre/filament yarn, and according to common parlance 'artificial silk' includes Terylene, Terene and Dacron fabrics and they do fall under the category of man-made non-cellulosic fibre/filament yarn'. Vide Government of India, Ministry of Commerce, Office of the Textile Commissioner, letter No. 1/64/ ASB/G/Vol. III/2799, dated 20th/21st December, 1966. Again, another Government official on an enquiry by the trade, says as follows: 'I am directed to inform you that Terylene, Terene and Dacron fabrics are manufactured from polyester non-cellulosic filament/art silk iabrics as per the Art Silk Textiles (Production and Distribution) Control Order, 1962.' Vide Government of Indiaf Ministry of Commerce, Textile Commissioner's letter No. 1/64/ASB/G/Vol. III/2, dated 3rd January, 1967. The Inspector of Central Excise, Gwalior Range, Gwalior, in his letter No. 22/67 dated 16th February, 1967, addressed to the manufacturers would say that Terylene, Nylon, etc., fabrics are assessed under Tariff item 22 of the Central Excises and Salt Act, 1944, under description, 'art silk fabrics'.

12. The contention of the 1st respondent that since Terylene, Terene, Dacron and Nylon belong to the class of synthetic man-made fibre which is neither cellulosic nor non-cellulosic, but belong to the class of polyamides and polyesters and since their basic material is petro-chemical or oil, it should be classified not under artificial silk, is something which cannot be countenanced in view of the classifications and categorisation made by expert Government officials who are expected to consider the nature of these products from time to time. Even otherwise, industrial journals to which we have made reference already, do hold a contrary view. In fact, the Deputy Director acting for the Textile Commissioner, Bombay, would say that these products are polyester non-cellulosic art silk fabrics.

13. Having thus considered the views of the various and prominent Government officials, it is also necessary for us to advert to the popular understanding of these words, particularly in the commercial field. Several letters have been produced before us by the learned counsel for the petitioner to the effect that the product under consideration is the brand name of polyester fibre and that it is included under the caption of art silk fabrics. As many as 12 letters have been produced from various commercial firms of repute in Calcutta, Bangalore, Bombay and Madras. It is unnecessary for us to consider in detail each one of these letters. The main purport and purpose of the production of such letters is to impress upon us that popularly these textiles are understood as man-made non-cellulosic fibres or filaments and that each manufacturer adopts a trade-name for the goods manufactured by him. It is conceded that these products are polyester fibres ; but nevertheless they are classifiable as art silk fabrics and they have been understood for years in the trade as such. It appears, therefore, that notwithstanding the fact that the basis of the products under consideration is oil, petroleum or mineral in nature, that would not be sufficient by itself to take it out of the category of man-made fibres.

14. At this stage it would be convenient to refer to the various statutes, particularly the taxing statutes which for a considerable length of time have been grouping these goods, Terylene, Terene, Dacron, Nylon, under the category and caption of 'rayon' or 'artificial silk.

15. In the Indian Tariff Act, 1934 (32 of 1934), the words 'art silk yarn' appear. By this was meant rayon or such other man-made fibre is clear from the dictionary meaning of the term. Under the Central Excises and Salt Act, 1944, 'artificial silk' is correlated to rayon and is meant to include all varieties of fabrics manufactured either wholly or partly from rayon or artificial silk-vide item 22 of Schedule I to the Central Excises and Salt Act, 1944. Section 14 of the Central Sales Tax Act, 1956, adopts the above definition for rayon or artificial silk and declared it as one of the goods of special importance in inter-State trade and commerce. Even so, the Additional Duties of Excise (Goods of Special Importance) Act, 1957, adopts the same meaning for artificial silk as equivalent to rayon. That rayon is man-made and thus synthetic fibre is not in dispute. Thus the above Acts of Parliament always treated the products in question in pan materia with rayon and levied duties on them as artificial silk. The revenue however presses into service the definition of 'artificial silk' in Art Silk Textiles (Production and Distribution) Control Order, 1962. The definition reads thus:-

(a) 'art silk yarn' means yarn manufactured from cellulosic and non-cellulosic materials and includes (a) man-made cellulosic spun fibre yarn, (b) man-made non-cellulosic spun fibre yarn, (c) man-made cellulosic filament yarn, and (d) man-made non-cellulosic filament yarn.

(b) 'art silk cloth' means any fabric made wholly from art silk yarn or partly from art silk yarn and partly from any other yarn provided such fabric contains not less than 60 per cent, of art silk yarn.

16. The observations of the Supreme Court in State of Gujarat v. Sakarwala Brothers [1967] 19 S.T.C. 24 that where a statute gives a definition, the common meaning has to be ruled out, are relied upon. In Art Silk Textiles (Production and Distribution) Control Order, the main aspect involved is one of control of production of particular varieties of art silk cloth. The enumeration therein is illustrative but not exhaustive of man-made fibres and cannot be availed of to interpret the normal meaning of artificial silk appearing in the Schedule to the Madras General Sales Tax Act. Even otherwise, being a specific definition it cannot control the meaning of art silk used in legislation from 1934 onwards.

17. The revenue hesitantly urged that in these writ petitions, a jurisdic-tional fact, the finding of which is exclusively within the competence of the revenue, is being sought to be found by this Court, which is ordinarily not expected to assess facts which are within the competence and purview of the assessing authority. It has to be remembered that courts are to foster justice and right a wrong. The assessing authority in this case has made up its mind and it appears from the record that it has already exercised its jurisdiction, having assimilated the facts attendant thereto and has indeed decided to reopen the assessments for the earlier years and impose sales tax on the textiles in question, on the foot of there being no exemption available to the petitioner under item 4 of the Third Schedule to the Madras General Sales Tax Act, 1959. Such a predetermination of the alleged jurisdictional facts infringes certain vested rights in the petitioner. No doubt, a jurisdictional fact is one, on the finding of which, the jurisdiction of the concerned tribunal depends. But it is now well-settled that the court's powers to determine the correctness of such facts are still preserved, even though the initial authority has adverted to it, acted upon it and come to the one or the other decision or conclusion. It is not to be forgotten that by such assessment of the jurisdictional fact, rightly or wrongly, the assessing authority sets the law into motion. The latter relative motion of law has to be interdicted in a deserving case by courts exercising extraordinary jurisdiction under Article 226 of the Constitution, if on a prima facie review of the relative and relevant facts, it is found that the jurisdictional fact has been erroneously found by the concerned tribunal. In other words, if the assessing authority is not right in having assumed jurisdiction in it to levy sales tax on its own self-serving finding that Terylene, Terene, Dacron etc., are not artificial silk, then a writ of prohibition can issue in order to avert the application and commandment of law, resulting from such an erroneous assumption of jurisdiction. We are therefore unable to agree with the learned Advocate-General that these writs are not maintainable.

18. After having thus gathered the necessary material to find out the true import, content and meaning of the expression ' artificial silk ' and from the interpretation given to it by the trade, experts, Governmental departments, as also statutory references thereto ever since 1934, it is very difficult to accept the contention of the revenue that artificial silk cannot mean and include the products under consideration. No doubt, departmental rulings by themselves cannot be a guide to courts to find out the true meaning of words. But that meaning which the trade, Government officials and statutes attribute to the words 'artificial silk' must be taken to be the ordinary and popular meaning of the same. It cannot be denied that the above group of personnel are persons conversant with the subject-matter and therefore the meaning they have given to the expression 'artificial silk' should be taken to be the meaning which should be attributed to it. From the opinion expressed in well-known journals and by experts, it is clear that though Terylene, Terene, Dacron or Nylon has petro-chemical as its base, it is nevertheless a polyester fabric which is certainly synthetic fibre and therefore is classifiable as artificial silk. We have recently held in Kannappa Mudaliar v. State of Madras T. C. No. 230 of 1964 that the popular understanding test prevails over others whilst appreciating the real purport and intent of words used in popular parlance and engaged in a taxing statute. We have also observed that:

Care should be taken in interpreting the word for legal purposes, and particularly under the subject of taxation and while vivifying that word, the popular understanding of it should be rather pressed into service rather than its botanical, scientific or technological signification.

19. In the Madras General Sales Tax Act, 1959, or even in the earlier enactments thereto, and not even in the Central Sales Tax Act, 1956, the import and content of the words Terylene, Terene, Dacron etc., have been defined. In the absence of such definition, Courts are bound to have recourse to the meaning attributable to such words by persons who are dealing in such goods and utilising such goods. In other words, the extreme, peculiar and scientific meaning of the words which might sometimes deviate from the popular meaning cannot prevail. Ordinarily, courts when called upon to interpret the meaning of such words, mainly rely upon the popular or ordinary meaning given to them. As pointed out by the Supreme Court of India in Ramavatar Budhaiprasad v. Assistant Sales Tax Officer [1961] 12 S.T.C. 286 these words, being words of everyday use, will be construed in their popular sense meaning ' that sense which people conversant with the subject-matter with which the statute is dealing would attribute to them.

20. In the instant case, we are confronted with the expression ' artificial silk ' which has a special connotation of its own. It satisfies the popular understanding test in that it is understood as ordinary mill textiles and which is a man-made fabric, may the base be either viscose or mineral oil. Such overwhelming authority is available that it would not be safe to take out artificial silk appearing as item 4 in the Third Schedule to the Madras General Sales Tax Act, 1959, totally out of the popular context and meaning attributed to it and accept the contention of the revenue that the articles under review are not artificial silk. The Central Government which has been made a party to these writ petitions categorically avers that Nylon, Terylene, Terene, Decron, Nylex etc., are considered as artificial silk being man-made fibres and that this view has been prevalent throughout India about the classification of these fibres and adds that even factually and technically, the products are textiles coming under the category of artificial silk. These goods are subject to the additional duty of excise under the Additional Duties of Excise (Goods of Special Importance) Act, 1957, and there has not been any controversy about the character of the goods at any time. They are of the view that by virtue of the agreement between the State and the Central Government, the Centre is collecting the additional excise duty on these fabrics and distributing a portion of the same out of the Consolidated Fund to the State, and that in respect of these fabrics the State cannot levy sales tax. It is a fundamental canon of law that whilst it is possible for both the Centre and the State to interpret upon and explain certain words or expressions used in taxing statutes amongst others, a certain uniformity should prevail in order to avert inconvenience and harassment resulting to the persons affected by such an interpretation or ruling. Article 261 of the Constitution of India is a pointer to this effect and provides that full faith and credit shall be given throughout the territory of India to public acts of the Union and of every State. It cannot be disputed seriously that the opinions and the decisions taken by the Government of India under the Indian Tariff Act and the Excise Acts are such public acts. It is also significant to note that the Additional Duties of Excise (Goods of Special Importance) Act was passed after a deep consideration of the mutual interests and benefits the Centre and the States should and ought to derive by such an imposition. This is seen from the Finance Commission's Report preceding the passing of the Additional Duties of Excise (Goods of Special Importance) Act and this is also referred to in the counter-affidavit filed on behalf of the Central Government. Such being the essence of the bargain between the Centre and the States, when the additional excise duty was imposed on artificial silk, it is not ordinarily open to the State, who did not at any time choose to impose a levy on the products under consideration ever since the passing of the Madras General Sales Tax Act, 1959, to take up a view contrary to that practice and understanding and arbitrarily decide to levy sales tax on the goods in question on the foot that they are not artificial silk. The notices issued by the 1st respondent calling upon the petitioner to submit his accounts from 1961 for purposes of revision of concluded assessment and also the notices issued to the petitioner for the year 1965-66 calling upon him to furnish details of the turnover in the products under consideration stating that they are liable to assessment at different rates are certainly notices issued by the 1st respondent without jurisdiction and in any event is a public act done by him derogatory to the accepted practice and in particular violative of Article 261 of the Constitution. In our view, no distinct, independent and telling circumstances have been brought to our notice which compel the revenue to reopen the assessments of the petitioner from 1961 in order to impose a new levy on Terylene, Terene, Decron etc., on the only ground that they cannot be considered or deemed to be artificial silk. Such a bare, arbitrary and subjective satisfaction on the part of the 1st respondent cannot be allowed to run its course. When a Tribunal has assumed in itself jurisdiction when it has none and is threatening in pursuance of such assumed jurisdiction to do an act which is violative of the vested rights of a citizen, then the Courts can and ought to interfere under Article 226 of the Constitution of India and issue a writ of prohibition to interdict such authority from exercising such illegal jurisdiction. We are, therefore, satisfied, in the circumstances of this case, that the purported exercise of jurisdiction by the 1st respondent to levy the impost on Terylene, Terene, Decron, Nylon etc., and the impugned notices issued by him are totally violative of the rights of free trade and is obviously in the exercise of jurisdiction when he has none. The rule nisi issued, therefore, is made absolute and W.P. No. 2927 of 1966 is allowed with costs.

21. The other writ petitions were also heard along with the above. No fresh arguments were addressed either for or against the petitioners in the remaining cases. Following the reasoning as above, W.P. Nos. 2928, 2934, 2935, 2956 to 2963, 2993 and 2994 of 1966 and 48, 50, 51, 60, 101 to 103, 129, 135 to 139, 156, 214, 215, 216, 237, 238, 254 to 257, 370, 380, 433, 434, 440, 551 to 554 and 642 to 645 of 1967 are allowed with costs, one set. Counsel's fee Rs. 250.


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