1964 (10) TMI 43 - SC - VAT and Sales Tax

Whether the principle of constructive res judicata can be invoked against a writ petition filed by the appellant, Devilal Modi, who is the proprietor of M/s. Daluram Pannalal Modi, under Article 226 of the Constitution? Held that - Appeal dismissed. We are, satisfied that the second writ petition filed by the appellant in the present case is barred by constructive res judicata

Issues Involved:
1. Applicability of the principle of constructive res judicata to writ petitions under Article 226.
2. Validity of the order of assessment and penalty imposed on the appellant for the year 1957-58.
3. The appellant's right to challenge the same order of assessment through successive writ petitions.

Issue-wise Detailed Analysis:

1. Applicability of the principle of constructive res judicata to writ petitions under Article 226:

The core issue in this appeal is whether the principle of constructive res judicata can be invoked against a writ petition filed under Article 226 of the Constitution. The appellant, having already challenged the validity of the assessment order through a writ petition which was dismissed by the High Court and subsequently by the Supreme Court, filed another writ petition challenging the same order on additional grounds. The Court emphasized that the doctrine of res judicata is based on public policy considerations, which include the finality of decisions pronounced by competent courts and the prevention of repetitive litigation. The Court referenced the case of Daryao and Others v. The State of U.P. and Others [1962] 1 S.C.R. 574, to underline that decisions should be final unless modified or reversed by appellate authorities, and no one should face the same litigation twice over.

2. Validity of the order of assessment and penalty imposed on the appellant for the year 1957-58:

The appellant was assessed to sales tax for the year 1957-58 under the Madhya Bharat Sales Tax Act, 1950, which was later repealed by the Madhya Pradesh General Sales Tax Act, 1958. A notice was issued to the appellant on 31st December 1960, under the 1958 Act, stating that the appellant's sales for the year 1957-58 had escaped assessment, leading to a fresh assessment and the imposition of additional tax and penalty. The appellant's first writ petition raised two main contentions: improper delegation of duties by the Commissioner and the invalidity of reassessment under the subsequent Act. Both contentions were rejected by the Supreme Court, affirming the validity of the assessment order.

3. The appellant's right to challenge the same order of assessment through successive writ petitions:

The appellant's second writ petition raised two additional grounds that were not permitted to be raised during the appeal of the first writ petition. These grounds were: (a) reassessment under section 19(1) of the 1958 Act was invalid as the sales were not chargeable under that Act, and (b) the penalty imposed under the repealed 1950 Act was illegal. The High Court examined and rejected these grounds on merits. The Supreme Court held that allowing successive writ petitions to challenge the same order would undermine the finality of its judgments and violate public policy considerations. The Court referenced Amalgamated Coalfields Ltd. and Another v. The Janapada Sabha, Chhindwara [1963] Supp. 1 S.C.R. 172, to distinguish cases involving assessments for different years, where the cause of action might differ, from cases involving the same period, where res judicata would apply.

The Court concluded that the appellant's second writ petition was barred by constructive res judicata, as it sought to challenge the same order of assessment and penalty on new grounds that could have been raised earlier. The appeal was dismissed, reinforcing the principle that judgments of the Supreme Court are final and binding between the parties on matters directly covered by them.

Conclusion:

The appeal was dismissed on the grounds that the second writ petition was barred by constructive res judicata. The Court emphasized the importance of finality in judicial decisions and the prevention of repetitive litigation, aligning with public policy considerations.

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