1968 (1) TMI 25 - SC - Income Tax

Whether assessee should have been given the exemption under section 12 of the Madras Act in view of article 14 of the Constitution? Held that - The order of the Division Bench in appeal is clearly a speaking order dealing with the merits of the petition where only one point under article 14 was raised. In our opinion it bars the making of the present petition under article 32 on the same facts for the same relief based on the same article of the Constitution. The petitioner did not appeal from the order of the Division Bench. The High Court made a speaking order dealing with the merits of of the case and the fact that no notice was issued to the other side before such an order was passed is immaterial in the circumstances. We, therefore, uphold the preliminary objection. Appeal dismissed.

Summary

Issues:
1. Interpretation of section 12 of the Madras Electricity (Taxation on Consumption) Act, 1962 in relation to the Industries (Development and Regulation) Act, 1951.
2. Applicability of article 14 of the Constitution in granting exemptions under the Madras Act.
3. Preliminary objection regarding the maintainability of the petition under article 32 of the Constitution.

Detailed Analysis:
1. The petitioner, a public limited company, sought exemption from electricity tax under section 12 of the Madras Electricity (Taxation on Consumption) Act, 1962, claiming that despite not being licensed under the Industries (Development and Regulation) Act, 1951, it was governed by the Central Act. The Madras Government rejected the request, leading to a writ petition challenging section 12 of the Madras Act under article 14 of the Constitution. The High Court dismissed the petition, stating that the exemption was not a matter of right. The Division Bench upheld this decision, emphasizing that the petitioner could not claim exemption as per section 12 and that article 14 did not apply in this context.

2. The petitioner then filed a petition before the Supreme Court under article 32, arguing that it should have been granted exemption under section 12 of the Madras Act based on article 14 of the Constitution. However, a preliminary objection was raised by the State of Madras, contending that since the petitioner did not appeal the Division Bench's decision, the current petition was not maintainable. Referring to the precedent set in Daryao v. State of U. P., the Court held that the dismissal of a writ petition without notice does not create a bar of res judicata unless it is decided on merits. The Court concluded that the Division Bench's order was a speaking order on the merits, rejecting the article 14 argument, thus barring the petitioner from filing the current petition under article 32.

3. The Court further clarified that the nature of the order dismissing a writ petition without notice determines if it constitutes a bar of res judicata. In this case, the Division Bench's comprehensive order dealt with the article 14 argument extensively, concluding that there was no discrimination or unreasonable classification. As the High Court's order was a speaking order on the merits, the Court upheld the preliminary objection, dismissing the petition. Additionally, the Court indicated that even if it were to review the case, it would align with the Division Bench's interpretation of article 14, supporting the denial of exemption under section 12 of the Madras Act.

In conclusion, the Supreme Court dismissed the petition, upholding the preliminary objection and emphasizing the importance of the nature of orders in determining the applicability of res judicata in subsequent petitions. The Court concurred with the Division Bench's decision regarding the interpretation of article 14 in relation to the exemption provision of the Madras Act.