1960 (10) TMI 85

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..... lving taxable sales was ultra vires the legislature and that there was therefore no valid legislative sanction for taxing the turnover of such works contracts with reference to buildings. That was confirmed by the Supreme Court in State of Madras v. Gannon Dunkerley and Co.[1958] 9 S.T.C. 353. After the declaration of the law on the validity of the legislative provision to tax works contracts by this Court, the plaintiffs instituted the suit, out of which this appeal arises, for recovery of the amounts paid by them for the assessment years we have referred to above. That claim was resisted by the State. The learned trial Judge upheld the pleas of the defendant State. The learned Judge upheld the claim that section 72 of the Indian Contrac .....

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..... ould be considered and decided. As pointed out by the Privy Council in Raleigh Investment and Co. v. Governor-General in Council[1947] 15 I.T.R. 332; A.I.R. 1947 P.C. 78., though it might not be a conclusive factor it helped to a considerable extent in defining the scope of the ban imposed by a statutory provision like section 67 of the Income-tax Act, or what we have to consider now, section 18-A of the Madras General Sales Tax Act. Learned counsel for the appellants contended that in the absence of a valid legislative sanction for the levy of sales tax on the turnover of works contracts the assessments should be treated as nullities, and that section 18-A of the Sales Tax Act did not cover such cases. It was precisely such a contention .....

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..... ned counsel for the appellants referred to Bhailal Bhai v. State of Madhya Pradesh[1960] 11 S.T.C. 511. , and particularly to the observations of the learned Judges at page 522. The learned Judges referred to Raleigh Investment and Co. v. Governor-General in Council[1947] 15 I.T.R. 332; A.I.R. 1947 P.C. 78., as explained by the Supreme Court in the State of Tripura v. Province of East Bengal[1951] S.C.R. 1. Their Lordships of the Supreme Court affirmed the correctness of the principle laid down in Raleigh Investment and Co. v. Governor-General in Council(2), but pointed out that that would not apply to a case, where preventive action was sought by way of an injunction to levy assessment under an illegal statutory provision. With all respect .....

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