9911796707
TMI Blog1952 (6) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... ber, 1950, demanding payment of Rs. 9,401-10-6. It was upon this that Messrs. Shree Ganesh Jute Mills Ltd. made its application praying for (1) a writ of mandamus or in the nature of mandamus on the res- pondents to cancel and/or recall and/or forbear from acting or giving effect to the demand of Rs. 9,401-10-6; (2) a writ of prohibition or in the nature of prohibition prohibiting the respondent from taking any steps in connection with levying or demanding any sales tax in respect of these goods; (3) a writ of certiorari or in the nature of certiorari calling upon the respondents to produce the records and proceedings in the alleged demand and quashing the same. Sinha, J., granted a Rule nisi on the respondents to show cause why an order in the nature of prohibition, as asked for, should not be issued. The case of Messrs. Shree Ganesh Jute Mills Ltd. was that under the provisions of the Bengal Finance (Sales Tax) Act the sale of these goods must be excluded in calculating the taxable turnover. If this con- tention be correct, it is clear that the Commercial Tax Officer acted illegally in making the demand for sales tax. Bose, J., who heard the Rule came to the conclusion that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivision Court pursuant to Section 108 of the Government of India Act, and that notwithstanding anything hereinbefore provided an appeal shall lie to the said High Court from a judgment of one judge of the said High Court or one judge of any Division Court, pursuant to Section 108 of the Government of India Act made (on or after the first day of February 1929) in the exercise of appellate jurisdiction in respect of a decree or order made in the exercise of appellate jurisdiction by a Court subject to the superintendence of the said High Court, where the judge who passed the judg- ment declares that the case is a fit one for appeal ; but that the right of appeal from other judgments of judges of the said High Court or of such Division Court shall be to Us, Our Heirs or Successors in Our or Their Privy Council, as hereinafter provided." Admittedly, there is in this case a " judgment " within the meaning of Clause 15. It has recently been held in Belait v. The State of West Bengal(1) that the exercise of the powers under Article 226 of the Constitution is the exercise of Original jurisdiction. If, therefore, the words " pursuant to Section 108 of the Government of India Act " had not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... justice of each High Court shall determine what judge in each case is to sit alone and what judges of the Court, whether with or without the Chief justice, are to constitute the several Division Courts." On the principle laid down in the case of Secretary of State for India v. Hindusthan Co-operative Insurance Society(1), these words must be held to Continue in Clause 15 of the Letters Patent even though the Government of India Act has been repealed. If, therefore, a single judge is exercising jurisdiction vested in the High Court on the strength of some rule made in accordance with the provision (1) above and according to the determination by the Chief justice of the High Court under the terms of the provision (2) mentioned above, an appeal will lie from his judgment to the High Court. The rule and the determination under which Bose, J., exercised jurisdiction in this case purports to have been made, as already mentioned, under Article 225 of the Constitution of India. It is important to remem- ber that the powers under Section 108 of the Government of India Act as regards the making of rules and the determination of the Chief justice as to what judge shall sit alone and what j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dia Act' within the meaning of Clause 15 of the Letters Patent. In this view of the matter, although the judgment of McNair, J., was passed in exercise of jurisdic- tion vested in the High Court ......... it ...... does not come within the pur- view of Clause 15 and no right of appeal against the same can be claimed under that clause." It is abundantly clear thus that both Gentle and Das, JJ., based their decision that no appeal lay to the High Court on the fact that the rules under which a single judge sat to exercise jurisdiction vested in the High Court were admittedly under Rule 77 of the Trade Marks Act. It was not really necessary for them to decide whether exercise of such jurisdiction as did not exist when Section 108 was enacted can be said to (1) (1947) 51 C.W.N. 42. be "pursuant to Section 108." What their Lordships have said on this later question must therefore be considered to be obiter dicta and though entitled to very great respect as indicating the views of such eminent Judges are not binding on us. The view of Gentle, J., on this question appears at page 50 in the following passage: " The authority given by Section 108 (1) of the 1915 Statute to make rules for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a plain reading of the section that the right to make rules was not limited to the exercise of the jurisdiction which existed at the commencement of the Act. It is interesting to note that though the words "at the com- mencement of the Act" had been used in Section 106(1) of the Govern- ment of India Act, these words are conspicuous by their absence in Sec- tion 108. This fact itself justifies the conclusion that in enacting Section 108 the Parliament had the intention that the rule-making power in Section 108 is not to be limited to the exercise of jurisdiction that existed at the commencement of the Government of India Act, 1935. It is unreasonable to think that the Parliament would make no provision for making rules as regards the exercise by some of the Judges of the High Court of the jurisdiction vested in the High Court after the commencement of the Act. The Parliament could not be unaware that new jurisdiction could be vested after the 1915 Act. Could it be their intention that if and when such jurisdiction is vested by a later Act, the entire High Court should have to sit to exercise such jurisdiction unless the Legislature made some special provision ? It is absurd to thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifferent clauses and such other sales as may be pres- cribed. Clause (iii) of these clauses is in these words: "Sales to the Indian Stores Department, the Supply Department of the Government of India and any railway or water transport administration." The effect of this is that sales to the Indian Supply Department of the Government of India will be deducted from a dealer's turnover for determining the taxable turnover on which tax has to be paid. Admittedly, there was in existence at the time this Act came into force a department of the Government of India with the designation "Supply Department." This department continued its separate existence up to the 6th January, 1946. By a resolution which was published in the Gazette of India on the 5th of January, 1946, the Governor-General in Council created a new department in place of the former Department of Supply and the former Department of Industries and Civil Supplies. The resolution is in these words: "1. The Governor-General in Council is pleased to announce the creation with effect from the 7th January, 1946, of the Department of Industries and Supplies in place of the existing Departments of Supply and of Industries and Civi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trued strictly and that if there is any ambiguity or scope for doubt, the benefit of that doubt would go to the subject. In interpreting provisions for exemptions from the general rules, it is well to remember what was pointed out by Lord Halsbury in Inland Revenue v. Forrest(1) that all exemptions from taxation increase the burden on other members of the community. The argument for strict interpreta- tion in favour of the subject is not as forcible in the case of provisions for exemptions as in the case of provisions imposing burdens. Besides, we have to remember always the important principle that the Court cannot in interpreting Statutes import its own views as to what would have been fair. It might perhaps seem unfair that though a sale to the Government of India was entitled to certain privilege so long as it was to one department of the Government of India, an exactly similar sale to another department would not be so entitled. But that is a question of legislative policy with which the court has nothing to do. The Legislature might have, if it thought fit, used in the relevant clause the (1) (1890) 15 App. Cas. 334; 3 Tax Cas. 117. words "sales to the Government of India" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forbidding the appellants from giving effect to the same, should be set aside. There are two respondents in this appeal, namely, the seller company, Messrs. Shree Ganesh Jute Mills Ltd. and the purchaser, the Union of India, to whom the sales in question were made and who, under the terms of the relevant contract of sale, would be liable to pay the sales tax, if any be ultimately found payable in law. The two respondents jointly resist the appellants' claim and they question the maintainability of the present appeal by raising a preliminary objection and they support also the decision of Bose, J., on the merits. I shall first consider the pre- liminary objection and then I shall advert to the merits of the case. It is well settled that "the right of appeal is a creature of Statute" and that "an appeal does not exist in the nature of things": (Vide Sandback Charity Trustees v. Northstraffordshire Ry.Co.(1), Meenakshi Naidoo v. Subramania Sastri(2) and Rangoon Botatoung Co., Ltd. v. The Collector, Rangoon(3)). It is not also disputed that the present appeal cannot be maintained except under Clause 15 of the Letters Patent of this Court, the relevant part whereof runs as follows: "... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be appealable under the said clause. To decide the preliminary objection, therefore, we have to determine only the true construction and the scope and effect of the words "pursuant to Section 108 of the Government of India Act", as used in Clause 15 of the Letters Patent, in the present context of things, keeping in mind that there has been no amendment made in the said clause following the con- stitutional changes, referred to above. Some aspects of the matter have been fully dealt with by my learned brother in his judgment, just pronounced, and, as repetition is unnecessary, I shall endeavour to confine myself as far as possible, to the other aspects from which the question of maintainability of the present appeal may be considered and to these aspects I at once advert. The Government of India Act, referred to in Clause 15 of the Letters Patent was, as stated above, obviously the Act of 1915 which was replaced by the Government of India Act, 1935, so far as it is relevant for our present purposes, with effect from 1st April, 1937. Section 223 of this latter Act replaced the old Section 108 of the repealed Statute of the year 1915 and preserved and continued its provisions. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Marks(3), per Das J., as he then was), which lay down that "where a statute is incorporated by reference into a second statute the repeal of the first statute does not affect the second" and that "despite the death of the parent Act its offspring survives in the Incorporation Act" and, fur- ther, that "when a statute is repealed and re-enacted the reference to a section of the repealed Act is to be read as a reference to the, section of the new Act which reproduces it." The real question, therefore, is whether the "judgment" of Bose, J., is a "judgment" pursuant to Article 225 of the Constitution and the true answer to this question will decide the fate of the respondents' preliminary objection. Article 225 of the Constitution in its relevant part runs as follows: "Subject to the provisions of this Constitution and to the provisions of any law of the appropriate Legislature made by virtue of powers con- ferred on that Legislature by this Constitution, the jurisdiction of, and the law administered in, any existing High Court, and the respective powers of the judges thereof in relation to the administration of justice in the Court, including any power to make rules of Court and to r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , were in two parts which read as follows: "(1) Each High Court may by its own rules provide as it thinks fit for the exercise, by one or more Judges, or by Division Courts constituted by two or more Judges of the High Court, of the Original and Appellate Jurisdiction vested in the Court" and "(2) The Chief Justice of each High Court shall determine what Judge in each case is to sit alone and what Judges of the Court, whether with or without the Chief Justice, are to constitute the several Division Courts." The language used is quite general. It is wide enough to embrace the exercise of all the various jurisdictions vested in the High Court. The terms "Original" and "Appellate", occurring in sub-section (1), appear to have been used in contradistinction to each other but comprehending between themselves all the different jurisdictions possessed by the High Court (See in this connection the observations of Das, J., as he then was, in the case of India Electric Works Ltd. v. The Registrar of Trade Marks(1)). There is also nothing in the words employed to restrict them to the exercise of these jurisdictions over particular subjects or subject matters or to restrict them to the exten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the construction, there suggested. I say "suggested", because it appears to me that the observations made in the (1) (1947) 51 C.W.N. 42, at p. 65. case cited, on the question, now before us, were obiter dicta, as its ultimate decision, in the judgments of both the learned Judges, turned upon the Trade Marks Act and the Rules made thereunder, under which, according to both the learned judges, the other learned Judge (McNair, J.) who heard the "appeal" under Section 76(1) of the Act, exercised in that case the jurisdiction of this Court. With the utmost respect, however, to the learned Judges (Gentle and Das, JJ.) who decided the India Electric Co.'s case(1), I would say that, for reasons sufficiently indicated above, I am unable to agree with them in their construction of the relevant phrase in Clause 15 of the Letters Patent, quoted above, and the Bombay view, expressed on this point by Chagla, C.J., and Bhagwati, J., in the recent case of James Chadwick Bros Ltd. v. The National Sewing Thread Co. Ltd.(2), seems to me to be preferable. I should not, however, be understood to express any opinion as to which of the above two cases is correct so far as the actual decision, name ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of Calcutta, Bombay and Madras, which had, before the Constitution undeniable powers- though limited-to issue these writs (Vide Annie Besant v. Advocate General of Madras(3) and the other two Privy Council cases reported in Ryots of Garabandha v. Zamindar of Parlakimedi(4) and Maulvi Hamid Hassan Nomani v. Banwarilal Roy(5)) always acted in such matters as Courts of Original jurisdiction: (See in this connection the two Madras and the two Bombay cases reported respectively in Chief Commissioner of Income-tax v. North Anantapur Gold Mines Ltd.(6) and Penugonda Venkataratnam v. Secretary of State for India in Council(7) and Dinshaw Darabshaw Shroff v. Commissioner of Income-tax, Central(8) and Raghu- nath Keshav Khadikar v. Poona Municipality(9)). In the two recent cases on these writs which went lip to the Privy Council the judgments of their Lordships of the Judicial Committee contain ample indication that these writs are original writs and the issue of such writs is a matter of original jurisdiction: (Vide Ryots of Garabandha v. The Zamindar of Parlakimedi and Maulvi Hamid Hassan Nomani v. Banwarilal Roy(5)) and in the latter of these two cases the Board further held that in is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... involve exercise of the original civil jurisdiction of this Court as in the case of the corresponding high prerogative writs and Bose, J., in dealing with the respondents' application was exercising such original civil jurisdiction. It may be that the jurisdiction, so exercised, would not be "Extraordinary Original Civil jurisdiction" within the meaning of the Letters Patent (Vide Hamid Hassan's case(1)) but it may safely be said that it is original civil jurisdiction of this Court: (Vide in this connection Ramayya v. The State of Madras(2)). Once this conclusion is reached, it is clear that the "judgment" of Bose, J., does not fall within any of the excepted or excluded categories of jurisdictions, mentioned in Clause 15 of the Letters Patent, and would thus be appealable there under if the other conditions are satisfied. One of the writs, invoked and granted in this case, is a writ in the nature of certiorari and the Notification demanding sales tax from the respondent company has been cancelled in exercise of the power to issue such writ. It may be said, therefore, that Bose, J., exercised in reality or in substance, a power of revision and thus acted in the exercise of the rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e other conditions are satisfied, and this view is well supported by the decisions, cited above. The remaining matter under this head involves consideration of the larger question as to whether in exercising the power under Article 226 of the Constitution the High Court acts as a Special Court or Tribunal or as a Court or Tribunal of special jurisdiction to whose decisions the ordinary incidents of the rules and procedure of the High Court, including the general right of appeal from its decisions, would not attach. The question involved is undoubtedly one of extreme difficulty but it seems to me that, on principle and authority, it should be answered in the negative. A matter comes to the High Court under Article 226 of the Constitution when a legal right is in dispute and the High Court becomes seised of such dispute as one of the ordinary courts of this country. Clearly, therefore, from its decision an appeal would lie in the ordinary way: (1) (1952) A.I.R. 1952 Mad. 300. (2) (1945) A.I.R. 1945 Bom. 7. (Vide Adaikappa Chettiar v. Chandrasekhara Thevar(1)). It is true that there is no express provision conferring specifically a right of appeal from decisions under Article 226 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ., the Calcutta Municipal Act, and involved different considerations. If, however, the above distinction be not sufficient, I would, with respect, differ from the said decisions in view of the later pronouncement of the Judicial (1) (1943) L.R. 74 I.A. 264; 52 C.W.N. 275 (P.C.). (4) (1936) L.R. 63 I.A. 180. (2) (1947) 51 C.W.N. 716 (P.C.). (5) (1941) 45 C.W.N. 181. (3) [1913] A.C. 546. (6) (1945) 49 C.W.N. 10. Committee in the case of Adaikappa Chettiar v. Chandrasekhara Thevar(1) on this branch of the law. In the result, therefore, I agree in overruling the respondents' pre- liminary objection to the maintainability of the present appeal. Proceeding now to the merits of the appeal it seems to me that this appeal ought to succeed. I give below my reasons for this view. The respondents claim that the sales in question are exempt from sales tax by reason of Section 5(2)(a)(iii) of the Bengal Finance (Sales Tax) Act, 1941 (Bengal Act VI of 1941). The material portion of this section runs as follows: "........ (the) expression 'taxable turnover' means that part of a dealer's gross turnover during any period which remains after deducting therefrom ....................................... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be known as the "Ministry of industry and Supply" and continued to exercise the powers and perform or discharge the func- tions of the old Department of Industries and Supplies, including, inter alia, some of the powers and functions of the pre-existing Supply Depart- ment, as stated above. At the relevant time, therefore, namely, between August and November, 1948, when the sales, with which we are concerned, took place, the position was that there was no Supply Department of the Government of India but there was the bigger department known as the "Ministry of Industry and Supply", which was performing, amongst others, some of the functions of the old Supply Department and the ques- tion arises whether this new department, namely, "Ministry of Industry and Supply" was entitled, on the dates of the respective sales, namely, between August and November, 1948, to get the benefit of Section 5(2)(a) (iii) of the Bengal Finance (Sales Tax) Act. In my opinion, the question posed has to be answered in the negative. If we examine the language used in the statute, it becomes pretty clear that the exemption was available to "sales to the Indian Stores Depart- ment, the Supply Department of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption would no longer remain available. The disputed sales in the present case were not sales to the Supply Department of the Government of India to which the exemption attached under the statute but were sales to the "Ministry of Industry and Supply" which as a re-designation of the former Department of Industries and Supplies was really the bigger department, formed on amalgamation of the preexisting Supply Department and Industries and Civil Supplies Department etc. of the Government of India, and, thus, in the light of what I have said above, the disputed sales would not be entitled to protection. This appeal, therefore, ought to succeed on the merits too. It is true that the statute in question, being a taxing or fiscal statute, should be strictly construed against the taxing authority but it seems to me that the construction which I have put above on the relevant statu- tory provision is the only possible and reasonable construction in the true context of things and does not offend against that rule of strict construc- tion. In the circumstances, the appellants' claim ought to prevail. I agree, therefore, that this appeal should be allowed with costs. Appeal allowed. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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