1950 (11) TMI 1 - SC - VAT and Sales Tax

Jurisdiction Of High - Held that - It cannot be held that the order was passed by the High Court in this case in the exercise of either original or appellate jurisdiction. It is not contended that the matter arose in the exercise of the Appellate jurisdiction of the High Court because there was no appeal before it. Nor can the matter properly speaking be said to have arisen in the exercise of the original jurisdiction of the High Court because the proceeding did not commence in the High Court as all original suits and proceedings should commence. But the High Court acquired jurisdiction to deal with the case by virtue of an express provision of the Bihar Sales Tax Act. The crux of the matter therefore is that the jurisdiction of the High Court was only consultative and was neither original nor appellate. In this view the appeal must be dismissed though on hearing the parties it appeared to us that the sales tax authorities including the Commissioner and the Board of Revenue were in error in imposing a penalty upon the appellant under Section 10(5) of the Act which had no application to his case inasmuch as he had been registered as required by Section 7 of the Act.

Summary

Issues:
- Refusal to call upon the Board of Revenue to state a case under Section 21(3) of the Bihar Sales Tax Act, 1944.
- Competency of the appeal to the Supreme Court under Clause 31 of the Letters Patent of the Patna High Court.

Analysis:
The case involved an appeal from an order of the High Court of Judicature at Patna, where the appellant, a dealer under the Bihar Sales Tax Act, was assessed by the Sales Tax Officer for tax and penalty under Section 10(5) of the Act. The appellant had applied for registration as required by the Act but failed to appear before the Sales Tax Officer, leading to the assessment. The appellant appealed to the Commissioner and then to the Board of Revenue, seeking a reference to the High Court. The Board of Revenue refused to state a case, prompting the appellant to apply to the High Court, which also rejected the application. The appellant then sought leave to appeal to the Federal Court, which was granted based on a decision of the Lahore High Court. However, a preliminary objection was raised in the Supreme Court regarding the competency of the appeal.

The Supreme Court analyzed the provisions of Clause 31 of the Letters Patent of the Patna High Court, which allows appeals to the Privy Council in certain cases. The Court emphasized that for an appeal to be competent, the order under appeal must be final and passed in the exercise of the original or appellate jurisdiction of the High Court. In this case, the Court found that the High Court's order was not final as it did not bind the parties directly; instead, it required the Board of Revenue to act based on the judgment. The Court cited precedents to support the view that the High Court's jurisdiction in this matter was consultative and not original or appellate.

Despite finding errors by the sales tax authorities in imposing a penalty on the appellant, the Supreme Court dismissed the appeal due to the lack of competency. The Court noted that the appellant had been registered as required by the Act, rendering the penalty under Section 10(5) inapplicable. Consequently, no costs were awarded in the case.