1961 (4) TMI 4 - SC - VAT and Sales Tax

Whether the petitioner is entitled to claim a deduction on account of sale of mustard seed to the extent of ₹ 1,00,513-11-9 to Messrs. Panna Lal Binjraj as sales made to a registered dealer under the Schedule to Bihar Finance Act (11 of 1949) read with the Bihar Sales Tax Act (XIX of 1947)? Held that - In these appeals we have reached the conclusion, for reasons already stated, that the appellant is not entitled to ask us to exercise our power under article 136. There are no special circumstances justifying the exercise of such power ; on the contrary the circumstances are such that it would be wrong both on principle and authority to allow the appellant to bypass the High Court by ignoring its orders. In our view, special leave was not properly given in these cases and we, would accordingly dismiss the appeals with costs, without going into merits

Issues Involved:
1. Whether the despatch of jute outside the State of Bihar was a sale within the meaning of the Bihar Sales Tax Act, 1947.
2. Whether the purchases made on behalf of two jute mills outside Bihar were liable to tax.
3. Whether the appellant was entitled to claim a deduction on account of the sale of mustard seed to Messrs. Panna Lal Binjraj.
4. Whether the appellant is entitled to be heard on merits in the appeals when special leave was neither asked for nor granted in respect of the subsequent orders of the High Court.

Issue-wise Detailed Analysis:

1. Despatch of Jute Outside Bihar as a Sale:
The appellant firm, Messrs. Durga Dutt Chandi Prasad, claimed deductions for despatches of jute made to its own firm in Calcutta, arguing that these were not "sales" within the meaning of the Bihar Sales Tax Act, 1947. The Sales Tax Officer disallowed these claims, and subsequent appeals and revisions to the Deputy Commissioner of Commercial Taxes and the Board of Revenue were dismissed. The Board of Revenue concluded that the despatches were sales, and this finding was upheld by the High Court, which refused to state a case for the appellant on this issue.

2. Purchases on Behalf of Jute Mills Outside Bihar:
The appellant also claimed deductions for purchases made on behalf of Raigarh Jute Mills and Bengal Jute Mills, asserting these were not liable to tax. Similar to the first issue, the Sales Tax Officer disallowed the claims, and the appellant's appeals and revisions were dismissed by higher authorities. The Board of Revenue and the High Court found that these purchases were taxable, and the High Court refused to state a case on this issue as well.

3. Deduction for Sale of Mustard Seed:
For the third assessment period, the appellant claimed a deduction for the sale of mustard seed to Messrs. Panna Lal Binjraj. The High Court directed the Board of Revenue to state a case on whether the appellant was entitled to this deduction under the Bihar Finance Act and the Bihar Sales Tax Act. The High Court concluded that the appellant was not entitled to the deduction because the registration certificate of Messrs. Panna Lal Binjraj did not mention that mustard seed could be sold for manufacturing purposes free of tax. This finding was adverse to the appellant.

4. Entitlement to be Heard on Merits:
The central question was whether the appellant could be heard on merits in the Supreme Court when special leave was neither asked for nor granted in respect of the High Court's subsequent orders. The Supreme Court emphasized that the appellant sought to bypass the High Court, which had already made final and binding decisions. The Court highlighted the practice and limitations under Article 136 of the Constitution, stating that special leave should be exercised sparingly and only in exceptional cases. The Court found no exceptional circumstances justifying the exercise of its power under Article 136 in this case. The appellant's attempt to bypass the High Court was deemed improper, and the appeals were dismissed with costs.

Conclusion:
The Supreme Court dismissed the appeals, emphasizing that the appellant could not bypass the High Court's final decisions by seeking special leave directly from the Supreme Court. The Court reiterated the importance of adhering to established practices and limitations under Article 136, ensuring that special leave is granted only in exceptional and extraordinary circumstances.

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