PETITIONER: <NAME> AND OTHERS Vs. RESPONDENT: THE STATE OF MADHYA PRADESH AND ANOTHER DATE OF JUDGMENT: 05/04/1968 BENCH: <NAME>, M. (CJ) BENCH: <NAME>, M. (CJ) BACHAWAT, R.S. VAIDYIALINGAM, C.A. HEGDE, K.S. GROVER, A.N. CITATION: 1969 AIR 78 1968 SCR (3) 662 CITATOR INFO : R 1970 SC1298 (9) R 1971 SC 71 (7) RF 1971 SC 530 (233,239,387) R 1971 SC1558 (19) RF 1975 SC2238 (22) E 1977 SC 955 (12,14,16,20,24) R 1978 SC1217 (25) R 1981 SC2016 (8,10) R 1986 SC 794 (8,12,13,14) R 1987 SC2205 (13) RF 1988 SC 752 (10) R 1990 SC 255 (4,5) RF 1991 SC1094 (6) ACT: Madhya Bharat Sales Tax Act (30 of 1950), s. 17-Jurisdiction of civil court barred-Scope of the bar. HEADNOTE: By Notifications issued by <ORG> under s. 5 of the Madhya Bharat Sales Tax Act 1950 sales-tax was imposed and collected from the appellants. They filed suits, for refund of the tax on the ground that it was illegally collected from them being against the constitutional prohibition in Art. 301 and not saved under Art. 304(a).  <CITATION> . (1960) M.P.L.J. 6011, the petitioner therein challenged in a writ petition, the levy of sales tax on the same grounds and <ORG> declared the notifications to be offensive to Art. 301 and held that ,the imposition of tax was illegal. Following that decision, the trial court decreed the suits filed by the appellants. In appeal before <ORG> it was conceded by the <ORG> that the tax could not be imposed in view of Art. 301 , but it was contended that the suits were not maintainable in view of s. 17 of the Act which provides that no assessment made under the Act shall be called in question in any court. <ORG> held that the suits were incompetent. In appeal to this Court, HELD: The suits were maintainable. [684 D] An enquiry into the diverse views expressed in the decisions of this Court shows that an exclusion of the jurisdiction of civil court is not readily to be inferred unless the following conditions apply : (1) Where the statute gives a finality to the orders of the special tribunals the civil court's jurisdiction must be held to be excluded if there is adequate remedy to do what the civil courts would normally do in a suit. Such provision, however, does not exclude those cases where the provisions of the particular Act have not been complied with or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure. [682 A-C; 683 <CITATION>  L.R. 67 I.A. 222; <CITATION> ,  1 S.C.R. 752 and <CITATION> ,  3 S.C.R. 582. In Firm Illuri Subbayya Chetty & Sons' case the assessee conceded that the tax was payable and did not raise the issue before the appellate authorities under the Act. The suit for refund of tax was held not maintainable on those special facts, with reference to the addition of s. 18A excluding the jurisdiction of civil court and the special remedies provided in ss. 12A to 12D in the Madras General Sales Tax Act, 1939. This Court, however, did not think it necessary to pronounce any opinion on <ORG> view in the <ORG> case  L.R. 74 I.A. 50) that even the vires of the provisions could be considered by the <ORG> constituted under the Act. Dealing with <ORG> case, it was pointed out that non- compliance with the provisions of the statute meant non- compliance with such fundamental 663 provisions of the statute as would make the entire proceedings before the appropriate authority illegal and without jurisdiction. [679 G-H; 680 B-D] (2) Where there is an express bar of the jurisdiction of the an examination of the scheme of the particular Act to find the adequacy or the sufficiency of the remedies provided may be relevant but is not decisive to sustain the jurisdiction of the civil court. [682 D] Where there is no express exclusion the examination of the remedies and the scheme of the particular Act to find out the intendment becomes necessary and the result of the inquiry may be decisive. In the latter case, it is necessary to see if the statute creates a special right or a liability and provides for the determination of the right or liability and further lays down that all questions about the said right and liability shall be determined by the tribunals so constituted, and whether remedies normally associated with actions in civil courts are prescribed by the said statute or not. [682 <CITATION> ,  5 S.C.R. 517 it was held that the civil court had jurisdiction because, at the relevant time, (a) the Madras General Sales Tax Act, 1939, did not have s. 18A (which was introduced later barring the jurisdiction of civil court) (b). the Act did not have the elaborate machinery for adequate remedy which was also introduced later, and (c) the tax was illegally collected ignoring the fundamental provisions of the Act. Therefore, the observation in <CITATION> that <NAME>'s case was wrongly decided is open to doubt. [678 D, H] M/s. Kamala Mills Ltd. v. <ORG> of Bombay,  1 S.C.R. 64 was a decision of a Special Bench holding that s. 20 of the Bombay Sales Tax Act 1946 excluded the jurisdiction of the civil court in suits for refund of tax, in cases, where the decision of the authorities under the Act was merely an error in assessment capable of correction by the usual pro- cedure of appeals etc. But the Bench observed, that in such cases, where the jurisdiction of the civil court is barred- by providing an adequate machinery in the Act, it becomes 'pertinent to enquire whether remedies normally associated with actions in civil court are prescribed by the statute or not', and thus expressly left open the question as to how far the bar would operate in cases where the charging provision is ultra vires. [681 A-B, G-. 684 C-D] (3) Challenge to the provisions of the particular Act as ultra vires cannot be brought before <ORG> constituted under that Act. <NAME>,, <ORG> cannot go into that question on a revision or reference from the decision of the <ORG>. [682 <CITATION> ,  2 S.C.R. 229; Deputy Commercial Tax Officer, Madras v.Rayalaseema Constructions, 17 S.T.C. 505; Circo's <CITATION> , 19 S.T.C. 66 (S.C.); <CITATION> . 1045 of 1966. dated 20th July, 1967) and <CITATION> ,  1 S.C.R. 260; A.I.R. 1968 S.C. 271. (4) When a provision is already declared unconstitutional or the constitutionality of any provision is to be challenged, a suit is open. A writ of certiorari may include a direction for refund if the claim is clearly within the time prescribed by the Limitation Act but it is not a compulsory remedy to replace a suit. [682 <CITATION> ,  6 S.C.R. 261 which confirmed the decision in 1960 M.P.L.J. 601 this Court upheld the order of refund by <ORG> in its writ jurisdiction held that in cases where a defence of limitation was open or other facts had to be decided, the order of 664 refund was not proper, and accepted the proposition that a suit lay in' such cases without adverting to, the provisions of the Act to see whether the jurisdiction of civil court was barred either expressly or by necessary implication. Therefore, this case cannot be an authority for holding that the- civil court has jurisdiction to entertain such suits.  (5) Where the particular Act contains no machinery for refund of,, tax collected in excess of constitutional limits or illegally collected a suit lies. [683 <CITATION> ,  3 S.C.R. 499. (6) Questions of the correctness of the assessment apart from its constitutionality are for the decision of the authorities and a civil suit,does not lie if the orders of the authorities are declared to be final or there is an express prohibition in the particular Act. In either case, the scheme of the particular Act must be examined because it is a relevant enquiry. [6 83 B] In the present case, though the Madhya Bharat Sales Tax Act contains ,Provisions for appeal, revision, rectification and reference to the High ,Court, the notifications having been rightly declared void in the earlier -decision of <ORG>, the appellants could take advantage of the fact that tax was levied without a complete charging section. Since the tax authorities could not even proceed to assess the party their jurisdiction was affected and the case fell within categories (3) and (4) above, ,and not in category (2). [684 A-C] JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 260 to 263

-of 1967.

Appeals from the judgment and decree dated January 5, 1965 of <ORG>, Indore Bench in First Ap- peals Nos. 68, 69, 71 and 70 of 1961 respectively. <NAME>, <NAME> and <NAME>, for the appellants (in all the appeals).

<NAME> and <NAME>, for the respondents (in all the appeals).

The Judgment of the Court was delivered by <NAME>, <NAME> These are four appeals by certificate against the common judgment of <ORG> of Madhya Pradesh (<ORG>), 16 December, 1964/5 January, 1965

-dismissing four suits filed by the appellants to recover sales-tax alleged to be realized illegally from them by the State of Madhya, Pradesh, the respondent in these appeals. The suits were earlier decreed by the District Judge, Ujjain. The facts in the suits are common and were as follows:

The appellants are dealers in tobacco and have their places of business at Ujjain. They purchase and sell tobacco used for eating, smoking and for preparing bidis. They get their tobacco locally or import it from extra-state places. The former Madhya Bharat State enacted in 1950 the Madhya Bharat Sales Tax Act (Act 30 of 1950) which came into force on May 1, 1950. Under s. 3 of the Act every dealer whose business in the previous year in respect of sales or supplies of goods exceeded in the case of an, importer and manufacturer Rs. 5,000 and in other cases Rs. 12,000 had to pay tax in respect of sales or supplies of goods effected in Madhya Bharat from 1st May 1950. Under s. 5 , the: tax was a single point tax and it was provided that the <ORG> might by a notification specify the point of the sales at which the tax was payable. The section also fixed the minimum and maximum rates of tax leaving it to <ORG> to notify the actual rate.

<ORG>, in pursuance of this power, issued a number,. of notifications on April 30, 1950, May 22, 1950, October 24, 1953 and January 21, 1954. All these notifications imposed tax at different rates on tobacco above described on the importer, that is to say at the point of import. The tax was not levied on sale or purchase of tobacco of similar kind in Madhya Bharat. The tax was collected by the authorities in varying amounts from the appellants for different quarters. We are not concerned with the, amounts. The appellants served notices under s. 80 of the Code of Civil Procedure and filed the present suits for refund of the tax on the ground that it was illegally collected from them being against the constitutional prohibition in Art. 301 and not saved under Art. 304(a) of the Constitution. The State of Madhya Pradesh was formed on November, 1, 1955. <CITATION> .(1) <ORG> declared the notifications to be offensive to Art. 301 of the Constitution on the ground that it was illegal to levy a tax on the importer when an equal tax was not levied on similar goods produced in the State. The decision was later confirmed on this point in <CITATION> (2). The appellants did not take, recourse to the provisions of Art. 226 of the Constitution but filed their suits on December 21, 1957.

The suits were opposed by the <ORG> on the main ground that such a suit was barred by the provisions of s. 17 of the Act which provides :

"17. Bar to certain proceedings.-Save as is provided in S. 13 , no assessment made and no order passed under this Act or the rules made thereunder by the assessing authority, appellate authority or the Commissioner shall be called in question in any Court, and save as is provided-in sections 11 and 12 no appeal or application for revision shall lie against any such assessment or order."

The <ORG> also pleaded that as appeals against the assessment were pending before the Sales Tax Appeal Judge the plaintiffs were (1) 1960 M. P. L. J. 601.

(2) [1964] 6 S.C. R. 261.

not entitled to file the suits. The District Judge, following <CITATION> (1) and <CITATION> .(2), held that such a suit lay when a declaration was sought that the provisions of law relating to an assessment were ultra vires, and demand was made for refund of amounts illegally collected under it. On the second point the District Judge held that s. 21 of the Act which allows the Commissioner or the appellate authority to order refund of tax wrongly paid did not apply since no such appeal was proved to have been filed and the tax was not wrongfully paid but wrongfully realised.

On appeal by the <ORG> <ORG> reversed the decision. Before <ORG> it was conceded (as it is conceded even now) that the tax could not be imposed in view of the bar of Art. 301. The short question thus was whether the suit was barred expressly by s. 17 of the Act or any implication arising from the Act. The contention on behalf of the appellants was that if it was a question of the correctness of the imposition within the valid framework of the statute, rules or notifications S. 17 might have operated but not when the imposition was under a void law. In the latter event the assessee was free to challenge the validity of the law in a civil suit and also to claim a refund.

<ORG> considered the matter in the light of the decisions of <ORG> in <CITATION> in Council(3), <CITATION> (4), <CITATION> (5), <CITATION> (6), and others, and came to the conclusion that the suit was incompetent. <ORG> conceded that both aspects of the case were well supported by, authority. It is not necessary to enter into the reasons which weighed with <ORG> because our discussion of the autho- rities in this judgment will clearly expose the rival views and the one preferred in <ORG>.

The question that arises in these appeals has been before this Court in relation to other statutes and has been answered in different ways. These appeals went before <ORG> of this Court but in view of the difficulty presented by the earlier rulings of this Court, they were referred to <ORG> and that is how they are before us. At the very start we may observe that the jurisdiction of <ORG> is all embracing except to the extent it is excluded by an express. provision of law or by clear intendment arising from such law. This is the purport of (1) A. 1. R. 1951 S. C. 23.

(3) [1947] L. R. 74 1, A. 50; A. 1. R. 1947 P. C. 78. (4) [1940] L. R. 67 1. A. 222; A. 1. R. 1940 P. C. 105. (5) [1964] 1 S. C. R. 752; A. 1. R. 1964 S. C. 322. (6) A. 1. R. 1958 Mad. 544 (F. B.).

(2) 1960 M.P.L.J. 601.

s. 9 of the Code of Civil Procedure. How s. 9 operates is perhaps best illustrated by referring to the categories of cases, mentioned by <NAME>, J. in <ORG> v. Hawkesford(1)-They are :

"One is where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law: there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy the party suing has his election to pursue either that or the statutory remedy. The second class of cases is, where the statute gives the right to sue merely, but provides, no particular form of remedy : there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for enforcing it........ The remedy provided by the statute must be followed and it is not competent to the party to pursue the course applicable to cases of the second class."

This view of <NAME>, J. was accepted by <ORG> <NAME> v. <ORG>). To which category do such cases belong in India ? The con- troversy in India has revolved round the principles accepted in <CITATION> (3 ) and in <CITATION> in Council(4). In the first case it was laid down by <ORG> that the ouster of the jurisdiction of <ORG> is not to be lightly inferred and can only be established if there is an express provision of law or is clearly implied. In the second case it was held that where a liability to tax is created by statute which gives special and particular remedies against illegal exactions the remedy contemplated by the statute must be followed and it is not open to the assessee to pursue the ordinary process of Civil Courts. To the latter case we shall refer in some detail presently. Opinion in this Court has, however, wavered as to how far to go with the dicta of <ORG> in the two cases. Before, however, we go into the question we may refer to <CITATION> (5). In that case the notifications were declared ultra vires Article 301 of the Constitution and not saved by Art. 304(a). It was therefore held that the portion of the tax already paid must be refunded by <ORG>. The question then posed was: (1)  6 C. B. (NS) 336.

(2) [1919] A.C. 368.

(2) [1940] 67 I. A. 222.

(4) [1947] 74 I. A. 50.

(5) [1964] 6 S. C. R. 261.

"The question is whether the relief of repayment has to be sought by the 'tax-payer by an action in a civil court or whether such an order can be made by <ORG> in the exercise of its jurisdiction conferred by Art. 226 of the Constitution 2"

This <ORG> after examining the jurisdiction under Art. 226 concluded that the High <ORG> had the power to order refund in proceedings for a writ since complete relief could not be said to be given if only a declaration were given. The <ORG>, however,observed :

"At the same time we cannot lose sight of the fact that the special remedy provided in Article 226 is not intended to supersede completely the modes of obtaining relief by an action in a civil court or to deny defences legitimately open in such actions."

Pointing out that where a defence of limitation could be raised or other issues of fact had to be tried, it was held that the Court should leave the party aggrieved to seek his remedy by the ordinary mode of a civil suit. Therefore in those cases (there were 31 appeals before this Court) where the writ was asked for within three years, this Court upheld the order of refund by <ORG> in its writ jurisdiction, but in those cases in which the parties had gone to <ORG> after a lapse of 3 years, the order of refund was questioned and not approved observing that the petitioners would be at liberty to seek such relief as they might be entitled to in <ORG> if it was not barred by limitation.

It will appear from this analysis of the case that this Court :accepted the proposition that a suit lay. This it did without adverting to the provisions of the Act there considered to see whether the jurisdiction of <ORG> was barred or not, either expressly or by necessary implication. This Court was, of course, "not invited to express its opinion on the matter but only on whether <ORG> in its extraordinary jurisdiction could order refund of tax paid under a mistake. Having held that in some cases <ORG> should not order refund, this Court merely pointed out that the civil suit would be the only other remedy open to the party. The case cannot, therefore, be treated as an authority to hold that <ORG> had jurisdiction to entertain such suits. We may now proceed to consider first the two cases of <ORG> before examining the position under the rulings of this Court. <CITATION> (1) the sole question was the jurisdiction of the civil court to entertain a suit to (1)  L. R. 67 1. A. 222.

recover an excess amount of customs duty collected from <ORG> The suit was filed after an appeal to the Collector of <ORG> and a revision taken to <ORG> under the Land <ORG> Act, 1924 was dismissed. The suit was dis missed by the trial Judge on the preliminary ground that <ORG> had no jurisdiction. An appeal by <ORG> to <ORG> succeeded and there was a remit. The appeal to <ORG> followed. Section 1 .88 of the Land <ORG> Act, 1924 provided inter alia "Every order passed in appeal under this section shall, subject to the power of revision conferred by S. 191 , be final." <ORG> first made a general observation "It is settled law that the exclusion of the jurisdiction of <ORG>s is not to be readily inferred, but that such exclusion must either be explicitly expressed or clearly implied. It is also well settled that even if jurisdiction is so excluded, <ORG>s have jurisdiction to examine into cases where the provisions of the Act have not been complied with, or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure."

Then it proceeded to quote s. 188 (as above) and observed "By Ss. 188 and 191 a precise and self-

contained code of appeal is provided in 'regard to obligation which are created by the statute itself, and it enables the appeal to be carried to the supreme head of the executive Government. It is difficult to conceive what further challenge of the order was intended to be excluded other than a challenge in <ORG>........" and came to the conclusion that the jurisdiction of <ORG> was excluded. The decision of <ORG> was reversed and that of the trial Judge restored. The next case is the <CITATION> in Council(1). This was an appeal to <ORG> from a judgment of <ORG> in civil appellate jurisdiction reversing a decree passed by a Special Bench of <ORG> in its original civil jurisdiction. It arose from a suit filed for recovery of a sum paid under protest pursuant to an assessment to income-tax of <ORG> on the ground that the computation was under a provision of the Income Tax Act which was ultra vires <ORG>. One of the defences in the suit was that whether the said provision (1)  L. R. 74 I.A. 50.

was ultra vires or not, <ORG> were excluded from exercising their jurisdiction by S. 226 of the Government of India Act, 1935 and s. 67 of the Indian Income Tax Act. The provision in question was held ultra vires by <ORG> and it further held that neither of the two provisions was a bar to the civil courts' jurisdiction. <ORG> in disagreement held that s. 226 of the Government of India Act, 1935 barred the jurisdiction and that the provision impugned was not ultra vires. The bar of s. 67 of the Income Tax Act was not pressed before <ORG>. When the case reached <ORG>, the case was considered under s. 67 but not under s. 226 . <ORG> was of the opinion that s. 67 barred the jurisdiction. <ORG> had raised the question before the Incometax authorities that Explanation 3 to para 4(1) of the Income-tax Act 1922 was ultra vires. This was not accepted and the assessment was made. <ORG> filed an appeal but did not proceed with it and the assessment was confirmed. The appellate authority also said in its order that the constitutional question could not be raised before it. The suit was then instituted.

Section 67 of the Indian Income-tax Act in specific terms stated "No suit shall be brought in any civil court to set aside or modify any assessment made under the Act. . . " The result of the suit has already been stated. '<ORG> considered this section and observed that the suit in form did not profess to modify the assessment but in substance it did so. The declaration that a certain provision was ultra vires was but a step. According to <ORG> the assessment made under an ultra vires statute was not a nullity and the assessment ought to be taken to proceed on a mistake of law in the course of assessment. Therefore, without going into the question whether the provision impugned was ultra vires or not <ORG> considered the matter. The argument was that the assessment was not one 'under the Act', if effect was given to an ultra vires provision since the provision would be a nullity and non-existent. To discover the force of the prohibition in s. 67 the following tests were applied --

(a) Does the Act contain machinery by which the assessee can raise the question of the vires of the provision before the special authorities ?

(b) This test was not conclusive but one to be considered.

(c) If there was no such machinery and yet the civil courts were barred the vires of S. 67 itself might come in for consideration.

<ORG>, however, came to the conclusion that the Income-tax Act gave the assessee an opportunity to raise the question under the Income-tax Act . The provision for a case stated for the advisory opinion of <ORG> was available and even if the authorities refused to state a case, <ORG> could be directly approached. The decision of <ORG> was also subject to further appeal. Thus there was adequate machinery in the Income-tax Act .

The words of s. 67 'under the Act' were construed as the activity of an assessing officer acting as such. That this activity took into consideration an ultra vires provision did not take the matter out of these words. That phrase meant the provenance of the assessment, and not the accuracy or correctness of the assessment or the machinery of the Income-tax Act or the result of; the activity. There was no difference between an incorrect apprehension of the provisions of the Income-tax Act and the invalidity of a provision. <ORG> explained that if this were not so all questions of the correctness of the assessment under the,; Income-tax Act could be brought before the <ORG> and I the section rendered otiose. The section made no distinction between tin inquiry into the merits of the assessment and jurisdiction to embark on an enquiry at all. The Civil <ORG>s' jurisdiction in either case was invoked as to the correctness of the assessment and the language of the section precluded consideration of jurisdiction in such circumstances. The Income-tax Act having a suitable and adequate machinery, jurisdiction to question the assessment otherwise than by that machinery was, therefore, held barred. <ORG> even doubted whether a provision such as S. 67 was at all necessary in the circumstances.

Both these cases thus appear to be decided on the basis of provisions in the relevant Acts for the correction, modification and setting aside of assessments and the express bar of the jurisdiction of <ORG>. The presence of a section barring the jurisdiction was the main reason and the existence of an adequate machinery for the same relief was the supplementary reason. The provision for a reference of a question to <ORG> was considered adequate to raise the issue of the validity of any provision of law under which the taxing authorities acted. This follows from <ORG>'s case(1). <ORG>'s case (2) was more concerned with the finality to the orders given by the Land Customs Act. Even so in the <ORG>'s case(2) room was left for interference by <ORG> by observing that (1) [1947] L. R. 74 1. A. 50.

(2) [1940] L. R. 67 I. A. 222.

<ORG> had jurisdiction to examine into cases where the provisions of the Act had not been complied with, or the statutory tribunal had not acted in conformity with the fundamental principles of judicial procedures. These observations were accepted by this Court in <CITATION> (1) and in <CITATION> (2). A passage from the latter case might be,quoted here "It is true that even if the jurisdiction of the civil court is excluded, where the provisions of the statute have not been complied with or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure, the civil courts have jurisdiction to examine these cases."

The observations of <ORG> were thus completely accepted.

We may now examine how the matter was further viewed in this Court. In two other cases this Court laid down that the validity of the provisions under which the authorities act is not a matter for those authorities to decide. In <ORG>'s <CITATION> (3) it was contended that s. 40(2) of the Mysore Sales Tax Act 1957 was ultra vires and beyond the competence of <ORG>. This Court observed :

"It is true that a question as to the vires of section 40(2) of the Sales Tax Act was raised, but it is now settled by decisions of this Court that the question as to the vires of a statute which a taxing officer has to ad- minister cannot be raised before him." The same was again reiterated in <CITATION> (4) in the following words :

"...this Court has held, in <CITATION> (60 I.T.R. 112) that the authorities under a taxing statute are not concerned with the validity of the taxing provisions and the questions of ultra vires is foreign to the scope of their jurisdiction. As no such point could be raised before the Income-tax authorities, neither the High Court nor <ORG> can go into these questions in a revision or reference from the decision of those authorities. This case was followed in <CITATION> [1966, 2 S.C.R. 8811; (60 I.T.R. 156)]".

(emphasis supplied) (1) [1964] 1 S. C.R. 752. (2) [1966] 3 S.C.R. 582.

(3) 19 S. T. C. 66.

(4) C. A. 1045 of 1966 decided on 20th July, 1967.

67 3 The party was left to 'appropriate

proceedings' without specifying what they would be. Perhaps a suit was meant. It follows that the question of validity of the taxing laws is always open to <ORG> for it cannot be the implication of any provision to make such a decision final or that even void or invalid laws must be enforced without any remedy. Therefore, in <CITATION> (1), after, quoting the observations of Viscount <NAME> (<ORG> v. <ORG> (1960 A.C. 260 at p. 286):

"It is a principle not by any means to be whittled down that the subject's recourse 'to Her Majesty's Courts for determination of his rights is not to be excluded except by clear words.";

our brother <NAME> added that the extreme proposition in <ORG>'s case (2 ) had not found favour with this Court. Our learned brother observed :

"This Court was not prepared to accept the dictum in the judgment (<ORG>) to the effect that even the constitutional validity of the taxing provi- sions would have to be challenged by adopting the procedure prescribed by the <CITATION> Income-tax Act -See Firm of Illuri Subbayya Chetty and Sons v. State of Andhra Pradesh  1 S.C.R. 752 at 760."

The position was rather strengthened in <CITATION> (3). The question then was whether a suit was not maintainable under S. 18-A of the Madras General Sales Tax Act 1939 (corresponding to s. 67 of the Indian Income-tax Act (1922). The suit followed the decision of this Court in <CITATION> (4) in which 'works contracts' of an indivisible nature were held not to fall within the taxing provisions of the Madras General Sales Tax Act, 1939. Section 18-A was pleaded as a bar. It was held that since the provisions of the Madras General Sales Tax Act, 1939 were declared ultra vires in their application to 'indivisible works contracts' the action of the authorities was outside the said Act and not under the Act for the purposes of s. 18-A . The suit was held not barred. <NAME>, J. (as he then was) speaking for the majority distinguished both <ORG>'s case(5) and the Commissioner of I. T. Punjab, North West Frontier & Delhi Provinces, Lahore v. <ORG> Lahore(") on the ground that no question of the (1) A. I. R. 1968 S.C. 271.

(3) [1966] 2 S. C. R. 229.

(5) [1947] L. R. 74 1. A. 50.

(2) [1947] L. R.74 T. A. 50.

(4) [1059] S. C. R. 379.

(6) [1947] L. R. 74 1. A. 306.

vires of the law was raised in them. <CITATION> . (1) and <CITATION> (3), <NAME> pointed out that the suit was held maintainable in the latter and there was nothing in the former to support the contention that the question of ultra vires of a statutory provision could be canvassed only through the machinery provided under the statute. Referring next to the case of <ORG> and Sons' case(3). the learned Judge said that the question whether s. 18-A of the Madras General Sales Tax Act, 1939 could apply where, a particular provision of the Sales Tax Act was ultra vires was left open (see, p. 243). The learned Judge next quoted the opinion of the majority in <CITATION> (4) to the following effect :

"But, with respect, we find it difficult to appreciate how taking into account an ultra vires provision which in law must be regarded as not being a part of the Act at all, will make -the assessment as one 'under the Act'. No doubt the power to make an assessment was conferred by the Act and, therefore, making an assessment would be, within the jurisdiction of the assessing authoririty. But the jurisdiction can be exercised only according, as well as with reference, to the valid provisions of the Act. When, however, the authority travels beyond the valid provisions it must be regarded as acting in excess of its jurisdiction. To give too wide a construction to the expression 'under the Act' may lead to the serious consequence of attributing to tile legislature which owes its existence itself to the Constitution, the intention of affording, protection to unconstitutional activities by limiting challenge to them only by resort to the special machinery provided by it in place of the normal remedies available under the Code of Civil Procedure, that is, to a machinery which cannot be as efficacious as the one provided by the general law. Such a construction might necessitate the consideration of the very constitutionality of the provision which contains this expression. This aspect of the matter does not appear to have been considered in <ORG>'s case."

The learned Judge next considered whether these observations, although obiter, were departed from in <CITATION> (5) and came to the conclusion that that decision did not touch upon the question whether a suit would lie in (1) F. C. R. 130. (2)  S. C. R. 1. (3)  1 S. C. R. 752. (4)  3 S. C, R. 499.

(5) [1966] 1 S. C. R. 64.

<NAME>

a, case where the assessment was made on the basis of a provision which was ultra vires the Constitution (see p.

Having considered these rulings the learned Judge examined the remedies provided by the Indian Income-tax Act and found that all authorities were creatures of the statute and functioned under it and could not ignore its provisions since the said Act conferred no such 'right' on them. Whether the provisions were good or bad was not their concern. Pointing out that the reference to <ORG> under the Indian Income-tax Act was confined to questions arising from the order of <ORG>, the learned Judge observed that 'the question of ultra vires is foreign to the scope of the <ORG>' jurisdiction' and that if such a question were raised the <ORG> could only reject it on the ground that it had no jurisdiction to decide it, and <ORG> and <ORG> would be equally incompetent on appeal to go into the question. The learned Judge next considered the decisions of <ORG>s into which it is not necessary to go here and on the strength of some observations which supported his view, stated his view in the following words "The legal position that emerges from the discussion may be summarized thus : If a statute imposes a liability and creates an effective machinery for deciding questions of law or fact arising in regard to that liability, it may, by necessary implication, bar the maintainability of a civil suit in respect of the said liability. A statute may also confer exclusive jurisdiction on the authorities constituting the said machinery to. decide finally a jurisdictional fact thereby excluding by necessary implication the jurisdiction of a civil court in that regard. But an authority created by a statute cannot question the vires of that statute or any of the provisions thereof where-, under it functions. It must act under the Act and not outside it. If it acts on the basis of a provision of the statute, which is ultra vires, to that extent it would be acting outside the Act. In that event, a suit to question the validity of such an order made outside the Act would certainly lie in a civil court."

As the head-note correctly states the effect of the decision was that the foundation laid by <ORG> in <ORG>'s case(1) for construing the expression 'under the Act' had no legal basis. It may be mentioned that in <NAME> (2) case also it was held that there was no machinery provided in the Central Provinces and Berar -Municipal Act for refund of tax assessed (1) (1947) L.R.741.A.50. (2) [1965] 3S.C.R.499.

and recovered in excess of constitutional limits and that the remedy: furnished by that Act was inadequate for enabling the assessee to challenge effectively the constitutionality or legality of assessment or levy of tax by a municipality or to recover from it what was realised under an invalid law. (see the judgment of <NAME>, J. also in Pabbojan case(1) at page 276). In Bharat Kala Bhan case (2) it was pointed out that :

".......... one of the corollaries flowing from the principle that the Constitution is the fundamental law of the land is that the normal remedy of a suit will be available for obtaining redress against the violation of a constitutional provision. The <ORG> must, therefore, lean in favour of construing a law in such a way as not to take away this right and render illusory the protection afforded by the Constitution."

Again in Deputy Commercial Tax Officer, Madras v. Raya- laseema Constructions(") the problem was the same as was dealt with in <NAME>'s Co. Ltd. case (4) . The earlier case was followed and it was held that the sales tax authorities having given effect to an ultra vires provision section 18-A of the Madras General Sales Tax Act, 1939 was no bar to the maintainability of the suit to recover tax paid under such an assessment since the authorities must be taken to have acted outside and not under the Madras General Sales Tax Act.

This brings us to the case of <CITATION> (5). There too three suits were filed alleging that the goods had passed to extra state points while they were still in the possession and ownership of the seller. Since the property in the goods remained in the seller till the goods had entered into other provinces, the sales could not be subjected to a tax in Madras Presidency. Section 11 (4) of the Madras General Sales Tax Act, 1939 made orders of the taxing authorities final but the Act applied only to sales within the Presidency of Madras and not outside it. There was at that time no provision to oust the jurisdiction of the civil courts.

Section 18-A of which we have spoken earlier and on which most of the cases turned, was added much later. Many of the remedies such as were considered in <ORG>'s case(6) and <NAME>'s case (4) were also added at the same time as s. 18-A . The question thus had to be decided without an express provision ousting the jurisdiction of <ORG> and (1) A. 1. R. 1968 S. C. 271.

(3) 17 S. T. C. 505.

(5) [1964] 5 S. C. R. 5 1 7.

(2) [1965] 3 S. C. R. 499.

(4) [1966] 2 S. C. R. 229.

(6) [1947] L. R. 74 I. A. 50.

without the existence of ail adequate machinery for raising such an issue before the authorities. The only provision which had to be considered was S. 11(4) which provided 'every order passed in appeal under this section, shall,, subject to the powers of revision conferred by S. 12 , be final.' The fundamental provisions of the Madras General Sales Tax Act, 1939 (as it then stood) were that the sales must be within the Presidency of Madras. The authorities ignoring these provisions held that 'outside sales' were taxable. Relying upon the dictum of <ORG> in <NAME> & Co.'s case(1), as applied in Firm of Illuri Subbayya Chetty's case(2), this <ORG> held that the suits were competent. In the case of this <ORG> last cited the following observation was made:

"It is necessary to add that these observations, though made in somewhat wide terms, do not justify the assumption that if a decision has been made by a taxing authority under the provisions of the relevant taxing statute, ,its validity can be challenged by a suit on the ground that it is incorrect on the merits and as such, it can be claimed that the provisions of the said statute have not been complied with. Non-compliance with the provi- sions of the statute to which reference is made by <ORG> must, we think, be non-compliance with such fundamental provisions of the statute as would make the entire proceedings before the appropriate authority illegal and without jurisdiction. Similarly, if an appropriate authority has acted in violation of the fundamental principles of judicial procedure, that may also tend to make the proceedings illegal and void and this infirmity may affect the validity of the order passed by the authority in question."

The Divisional Bench relying upon this observation pointed out "It was thus held that the civil court's jurisdiction may not be taken away by making the decision of a tribunal final, because the civil court's jurisdiction to examine the order, with reference to fundamental pro- visions of the statute, non-compliance with which would make the proceedings illegal and without jurisdiction, still remains, unless the statute goes further and states either expressly or by necessary implication that the civil court's jurisdiction is completely taken away.

Applying these tests, it is clear that without a provision like S. 18A in the Act, the jurisdiction of the civil court would not be taken away at least where the action (1) (1940) L. R. 67 1. A. 222.

(2) [1964] 1 S.C. R.

752. of the authorities is wholly outside the law and is not a mere error in the exercise of jurisdiction. Mr. <NAME> says that we must interpret the Act in the same way as if s. 18A was implicit in it and that s. 18A was added to make explicit what was already implied. We cannot agree. The finality that statute conferred upon orders, of assessment, subject, however, to appeal and revision, was a finality for the purposes of the Act. It did not make valid an action which was not warranted by the Act, as for example, the levy of tax on a commodity which was not taxed at all or was exempt. In the present case, the taxing of sales which did not take place within the State was a matter wholly outside the jurisdiction of the taxing authorities and in respect of such illegal action the jurisdiction of the civil court continued to subsist. In our judgment the suits were competent."

This case was, therefore, stronger than any so far noticed because of the absence of s. 18-A and the elaborate machinery for adequate remedy was introduced later and the tax was illegal1y collected ignoring the fundamental provisions of the Madras General Sales Tax Act, 1939. However, in <CITATION> (1) (although it was not pointed out what express provision or clear intendment in the Madras General Sales Tax Act, 1939 as it then stood, barred a civil suit) <NAME>'s(2) case was declared to be wrongly decided. In that very case the learned Judges considered a. rule which gave exemption but held that it did not give protection because it was enacted after the account period. What if it had been enacted before ? The observations in <NAME>'s case(1) that if a commodity was not taxable at all or was exempt the civil Court would have jurisdiction were, however, not accepted. It was sufficient to have said in <NAME> case(2) that exemption or no exemption that was for the authorities to decide and not a matter for <ORG>. The argument of exemption was rejected by observing :

"There was in the Travancore-Cochin General Sales Tax Act at the material time no express provision which obliged the taxing authority to exclude from the computation of taxable turnover the amount of salestax collected by the dealers." (emphasis supplied) This reasoning shows that if it had been, the suit might have been held competent. It is not necessary for us to pursue this matter further than to say that the observation that <NAME>'s case was wrongly decided is open to serious doubt.

(1) [1966] 3 S. C. R. 582.

(2) [1964] 5 S. C. R. 517, This leaves for consideration only the cases <CITATION> (1) and <CITATION> (2). The case of Firm of Illuri Subayya Chetty(1) arose under the Madras General Sales Tax Act, 1939, and s. 18-A was pleaded to make the suit incompetent. The transactions in respect of which tax was recovered were said to be of sales and not purchases and the latter only were to, be taxed. It was held that s. 18-A barred the suit because the attempt was to set aside or modify an assessment made under the said Act. It was pointed out that any challenge to the correctness of the assessment must be made before the appellate or revisional forums under the same Act since the character of the transaction was a matter into which the appellate and revisional authorities could go. A litigant who accepted the assessment when he could call it in question by other proceedings under the same Act could not begin a suit. The expression 'under the Act' was sufficient to cover even an incorrect assessment. The assessee firm succeeded in the suit but <ORG> held it barred under s. 18-A and also held against the assessee firm on the nature of the transaction.

This Court first held that there was no provision in the said Act for bringing a civil suit to question the assessment. Therefore the matter must fall in s. 18-A . This Court analysed the provisions of the said Act which provided by s. 12-A , 12-B , 12-C and 12-D for special appeals, including an appeal to <ORG>, the highest <ORG> in the State, laying down further that the appeal should be heard by <ORG>. In the light of this elaborate machinery the question, of alternative remedy was approached. It was also pointed out that the assessee firm had itself included these transactions in its returns. Having conceded that the tax was payable and not having raised the issue before the appellate authorities constituted under the said Act, it was held that the firm could not be allowed to raise the issue in a suit. This was enough to dispose of the appeal to this Court. <ORG>, however, went on to examine the rulings of <ORG> in <ORG>'s(3) and <ORG>'s(4) cases. Dealing with the former case, this Court pointed out that non-compliance with the provisions of the statute meant non-compliance with such fundamental provisions of the statute as would make the entire proceedings before the appropriate authority illegal and without jurisdiction. I The defect of procedure must also be fundamental. In either case the defect must make the order invalid in law and void. The Court went on to observe :

(1) [1964] 1 S. C. R. 752.

(3) (1940) L. R. 67 I. A. 222.

(2) [1966] 1 S. C. R. 64.

(4) (1947) L. R. 74 I. A. 50.

.lm15 "...... In what cases such a plea would succeed it is unnecessary for us to decide in the present appeal because we have-no doubt that the contention of the appellant that on the merits, -the decision of the assessing authority was wrong, cannot be the subject-matter of a suit because s. 18- A clearly bars such a claim in the civil courts." Referring next to <ORG>'s case(1) this Court pointed out that under the scheme of the Income-tax Act , <ORG> thought that a question of vires of the provisions could also be considered, but this Court did not think it necessary to pronounce any opinion whether this assumption was well-founded or not. This point was later considered in <NAME>'s case(2) by <NAME>, J. (as he then was) and we have sufficiently analysed the views of this Court. The case of Firm of Illuri Subbayya (3 ) may be said to be decided on special facts with additional reference to the addition of s. 18-A excluding the jurisdiction of civil court and the special remedies provi- ded in ss. 12-A to 12-D by which the matter could be taken to the highest civil court in the State.

This brings us to the last case on the subject. That is the <ORG> case(4). That case was heard by a special Bench of 7 Judges and is of more binding value than the others. <ORG> Ltd. was assessed to certain sales effected between 26 January 1950 and 31 March 1951 which the taxing authorities treated as 'inside sales' and the Company claimed to be 'outside sales' as determined under the <CITATION> (5). The judgment in the last cited case was delivered on September 6, 1955. The period for invoking remedies under the Bombay Sales Tax Act, 1946 under which the assessment was made had expired. A suit was, therefore, filed to claim refund. The Bombay Act contained s. 20 which read "20. Save as is provided in s. 23 , no assessment made and no order passed under this Act or the rules made thereunder by the Commissioner or any person appointed under s. 3 to assist him shall be called into question in <ORG>, and save as it provided in sections 21 and 22 , no appeal or application for revision shall lie against any such assessment or order."

The suit was dismissed on the preliminary point arising from this bar. A Letter Patent appeal in <ORG> also (1) [1947] I.L.R 74 1. A. 50.

(3) [1964] 1 S. C. R. 752 (2) [1966] 2 S. C. R. 229.

(4) [1966] 1 S. C. R. 64.

(5) [1955] 2 S. C. R. 603.

failed. The case came before this Court on a certificate. It was referred to a Special Bench because S. 20 was challenged as unconstitutional because it barred a suit even where the assessment was unconstitutional. This Court held that as there was adequate remedy to raise the question before the authorities by asking for rectification of the assessment, the section could not be said to deprive him of remedy in such a way as to render the section itself unconstitutional as was hinted in <ORG>'s case(1) about S. 67 of the Indian Income-tax Act. We are not concerned with that question.

The next question which was considered was whether the jurisdiction conferred on the taxing authorities included the jurisdiction to determine the nature of the transaction or was the decision about the character of the transaction, a decision on a collateral fact ? This Court held that it was the former and not the latter. Therefore the decision was held to be merely an error in assessment which was capable of correction by the usual procedure of appeals etc. The bar of s. 20 was, therefore, held to apply. During the course of the arguments <ORG> considered <NAME>'s case (2 ) and distinguished it from the Firm of <NAME> case(3) on the ground that the former was not barred by S. 18-A as it did not exist. The, <ORG>, however, made an observation to the following effect :

"In cases where the exclusion of the civil courts' jurisdiction is expressly provided for, the, consideration as to the scheme of the statute in question and the adequacy or the sufficiency of the remedies provided for by it may be relevant but cannot be decisive. But where exclusion is pleaded as a matter of necessary implication, such consideration

-would be very important, and in conceivable circumstances, 1-night even become decisive. If it appears that a statute creates a special right or a liability and provides for the determination of the right and liability to be dealt with by tribunals specially constituted in that behalf, and it further lays down that all questions about the said right and liability shall be determined by the tribunals so constituted, it becomes pertinent to enquire whether remedies normally associated with actions in civil courts are prescribed by the said statute or not."

<ORG> refrained from either accepting the dictum of <NAME> & Co.'s case(4) or rejecting it, to the effect that even if jurisdiction is excluded by a provision making the decision of the authorities final, <ORG> have jurisdiction to examine into (1) [1947] L.R. 741. A.50.

(3) [1964] 1 S. C. R. 5 72.

(2) [1964] 5 S. C. R. 517.

(4) [1940] L. R. 67 1. A. 222.

cases where the provisions of the particular Act are not complied with.

Neither of the two cases of Firm of <NAME>) or <NAME>) can be said to run counter to the series of cases earlier noticed. The result of this inquiry into the diverse views expressed in this Court may be stated as follows :-

(1) Where the statute gives a finality to the orders of the special tribunals <ORG> jurisdiction must be held to be excluded if there is adequate remedy to do what <ORG> would normally do in a suit. Such provision, however, does not exclude those cases where the provisions of the particular Act have not been complied with or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure.

(2) Where there is an express bar of the jurisdiction of the court, an examination of the scheme of the particular Act to find the adequacy or the sufficiency of the remedies provided may be relevant but is not decisive to sustain the jurisdiction of the civil court.

Where there is no express exclusion the examination of the remedies and the scheme of the particular Act to find out the intendment becomes necessary and the result of the inquiry may be decisive. In the latter case it is necessary to see if the statute creates a special right or a liability and provides for the determination of the right or liability and further lays down that all ques- tions about the said right and liability shall be determined by the tribunals so constituted, and whether remedies normally associated with actions in Civil Courts are prescribed by the said statute or not.

(3) Challenge to the provisions of the particular Act as ultra vires cannot be brought before <ORG> constituted under that Act. Even the High Court cannot go into that question on a revision or reference from the decision of the <ORG>.

(4) When a provision is already declared unconstitutional. or the constitutionality of any provision is to be challenged, a suit is open. A writ of certiorari may include a direction for refund if the claim is clearly within the time prescribed by the Limitation Act but it is not a compulsory remedy to replace a suit.

(1) [1964] 1 S. C. R. 752.

(2) [1966] 1 S. C. R. 64.

(5) Where the particular Act contains no machinery for refund' of tax collected in excess of constitutional limits or illegally collected a suit lies.

(6) Questions of the correctness of the assessment apart from its constitutionality are for. the decision of the authorities and a civil suit does not lie if the orders of the authorities are declared to be final or there is an express prohibition in the particular Act. In either case the scheme of the particular Act must be examined because it is a relevant enquiry.

(7) An exclusion of the jurisdiction of <ORG> is not readily to be inferred unless the conditions above set down apply.

In the light of these conclusions we have to see how the present case stands. Section 3 was the charging section. It spoke of the incidence of the tax. In consisted of several sub-sections. These sub-sections laid the tax on dealers according to their tax able turnover and in the case of a dealer who imported goods into Madhya Bharat the taxable turnover was Rs. 5000/-. Section 4 made certain exclusions and exemptions, and section 5 prescribed the rate of tax. That section read "5(1) The tax payable by a dealer under this Act shall be at a single point and shall not be less than Rs. 1-9-0 per cent. or more than 6 1/4 per cent of the tax able turnover, as notified from time to time by the <ORG> by publication in the official gazette.

Provided that Government may in respect of special class of goods charge tax up to 12 1/2per cent. on the tax able turnover.

(2) The Government while notifying the tax payable by a dealer may also notify the goods and the point of their sale at which the tax is payable."

In notifying the rate provision was made for rates in respect of importers, the point of time being the import. As the import itself postulated movement of goods, the matter fell within Article 301 and as trade and commerce is declared to be free throughout the territory of India, it became unfree by reason of the tax. The tax would therefore have ex facie offended Article 301. This could however be avoided if the tax was saved by Article 304(a). That required that similar goods manufactured or produced in Madhya Bharat had to bear an equal tax. Such equal tax was not imposed hence the notifications were struck down as making discrimination and rendering trade and commerce unfree. This was the effect of <NAME>'s case(1). No -doubt the Madhya Bharat Sales-tax Act contained provi- sions for appeal, revision, rectification and reference to <ORG>, the notifications being declared void the party could take advantage of the fact that tax was levied without a complete charging section. This affected the jurisdiction of the tax authorities because they could not even proceed to assess the party. The question was one falling in category Nos. 3 and 4 rather than in category No. 2 above. It was directly covered by the decision of this Court in <NAME>'s case ( 2 ) read with <ORG>'s <ORG>) and <NAME> case(2) already referred to We would have considered this matter again if <NAME>'s case (2 ) had been doubted before but it seems to have been followed in the last mentioned case and <ORG> case(5). If <ORG> case(6) had not expressly left the question open we would have applied the earlier case of <ORG> but as it is we are bound not by <ORG> decision but by <NAME>'s case(2). We must therefore allow these appeals with costs. The judgment of <ORG> is set aside and suits are decreed. The order for costs shall be as in the suit. The costs in <ORG> shall be borne as incurred.

V.P.S. Appeal allowed., (1) [1964] 6 S. C. R. 261.

(2) [1966] 2 S. C. R. 229.

(3) 19 S. T. C. 66 (S. C.).

(4) C. A. 1045 of 1966, dated 20-7-1967.

(5) A. 1. R. 1968 S.C. 271.

(6) [1966] 1 S. C. R. 64.


PETITIONER: <NAME> Vs. RESPONDENT: THE ADMINISTRATOR-GENERAL OFWEST BENGAL. DATE OF JUDGMENT: 20/04/1960 BENCH: <NAME>, K.C. DAS BENCH: <NAME>, K.C. DAS GAJENDRAGADKAR, P.B. <NAME>, K.N. CITATION: 1960 AIR 936 1960 SCR (3) 578 CITATOR INFO : F 1960 SC 941 (5,22) RF 1980 SC 214 (20) F 1982 SC1302 (14) D 1989 SC1834 (16) R 1990 SC 261 (18) RF 1990 SC 981 (17) RF 1991 SC1893 (18) ACT: Thika Tenancy-Decree for Possession against tenant-Applica- tion for relief by tenant- Amendment of Act with retrospective operation-Effect-Interpretation of Statute- Principles of construction-Thika Tenancy Act (W.B. 2 of 1949), S. 28-Thika Tenancy Amendment Act (W.B. 6 of 1953), s. 1(2) . HEADNOTE: With a view to give protection to Thika tenants against eviction and in certain other matters, <ORG> enacted the Calcutta Thika Tenancy Act, 1949. That Act was amended by the Calcutta Thika Tenancy Amendment Act, 1953, which omitted s. 28 of the Act. The question for decision in the appeal was whether the appellant against whom proceedings for execution of a decree for ejectment was pending, who had applied for relief under s. 28 when that section was in force, was entitled to have his application disposed of in accordance with the provisions of s. 28 , which had ceased to exist retrospectively though it remained undisposed of on the date the Amendment Act came into force: Held, that s. 1 , sub-s. (2) of the Calcutta Thika Tenancy Act 1953, clearly intended that no relief under s. 28 of the original 579 Act should be given in cases pending for disposal on the date the amendment became effective and s. 28 ceased to exist retrospectively. The principles applicable to interpretation of statutes are four-fold in nature,- (1)such statutory provisions as create or take away substantive rights are ordinarily prospective ; they can be retrospective if made so expressly or by necessary implication and the retrospective operation must be limited only to the extent to which it has been so made either expressly or by necessary implication, (2)the intention of the legislature has to be gathered from the words used by it, giving them their plain, normal, grammatical meaning, (3)if any provision of a legislation the purpose of which is to benefit a particular class of persons is ambiguous so that it is capable of two meanings the meaning which preserves the benefit should be adopted., (4)If the strict grammatical interpretation gives rise to an absurdity or inconsistency, such interpretation should be discarded and an interpretation which will give effect to the purpose will be put on the words, if necessary, even by modification of the language used: Held, also, that judicial decorum ought never to be ignored. Where one <ORG> or a judge of <ORG> is unable to distinguish a previous decision of another <ORG> or another Single judge and holds the view that the earlier decision was wrong, the matter should be referred to a larger Bench to avoid utter confusion. <NAME> v. <NAME>,  58 C.W.N. 64, overruled. JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 303 of 1956. Appeal from the judgment and decree dated February 7, 1955, of <ORG> in Appeal from Appellate Order No. 102 of 1953, arising out of the judgment and decree dated August 6, 1953, of the Subordinate Judge, <ORG> <NAME>, in Misc. Appeal No. 231 of 1953. G., <NAME>, <NAME> and <NAME>,for the appellant.

<NAME>, <NAME> and <NAME>, for the respondent. 1960. April 20. The Judgment of the <ORG> was delivered by <NAME>, J.-In Calcutta and its suburb Howrah there have existed for many years precarious tenancies popularly known as <NAME> tenancies, the characteristic feature of which is that the tenant takes lease of the land only and erects structures thereon at his own expense; where there is already a structure on the land the tenant acquires these structures by purchase or gift but takes the land on which the structure stood in tenancy. With the influx of population into these areas that followed the partition of India the position of these <NAME> tenants became even more insecure than before. With the sharply rising demand for accommodation the landlords found it possible and profitable to put pressure on these <NAME> tenants to increase their rents or to evict them so that other tenants who would give more rents and high premiums might be brought in. With a view to give some protection to these <NAME> tenants against eviction and in certain other matters, <ORG> enacted in 1949 an Act called the Calcutta <NAME> Tenancy Act (hereinafter referred to as " the Act "). Some features of the protection afforded by this legislation which deserve mention are that ejectment could be had only on one or more of the six grounds specified in s. 3 of the Act; special provisions as regards notice for ejectment were made in s. 4 ; in the same section provision was also made about payment of compensation as a necessary pre-requisite for ejectment in certain cases. Section 6 provides that no orders for ejectment on the grounds of arrears of rent shall be executed if the amount of arrears together with costs of proceedings and damages that may be allowed were deposited within 30 days from the date of the order. Not content with giving such protection only in suits and proceedings for eviction that might be instituted by the landlord in future the <ORG> in the 29th section of this Act provided that even in suits and proceedings which had already been instituted and were pending for disposal on the, date when the new law came into force, this now law will be applicable, except the provisions as regards notice in s. 4 . In the 28th section of the Act the <ORG> went further and provided that even where the decree or order for recovery of possession had been obtained by the landlord against a <NAME> tenant but possession had not been actually recovered, courts will have the power to re-open the matter and if the decree or order is not in conformity with the beneficent provisions of the Act either to rescind the decree or order altogether or to vary it to bring it into such conformity. Section 28 with which we are specially concerned in this appeal is in these words:-- " Where any decree or order for the recovery of possession of any holding from a <NAME> tenant has been made before the date of commencement of this Act but the possession of such holding has not been recovered from the <NAME> tenant by the execution of such decree or order, the court by which the decree or order was made may, if it is of opinion that the decree or order is not in conformity with any provision of this Act other than sub-section (1) of section 5 or section 27 , rescind or vary the decree or order in such manner as the <ORG> may think fit for the purpose of giving effect to such provision and a decree or order so varied by any <ORG> shall be transferred to such <ORG> to the Controller for execution under this Act as if it were an order made under and in accordance with the provisions of this Act." The new law however failed to achieve its object for some years as the <ORG> interpreted the definition of <NAME> tenant in the Act in such a manner that speaking generally no tenant was able to establish its requirement. To remedy this the Governor of West Bengal enacted on October 21, 1952, an Ordinance by which the definition of <NAME> tenant was revised and a few other amendments of the Act were made. The special protection given under ss. 28 and 29 of the Act to tenants against whom decrees or orders had been obtained or against whom cases were pending was however kept intact. The Ordinance by its s. 5 extended such special protection also to tenants whose cases were pending before a court on the date of the commencement of the Ordinance and those against whom decrees or orders had been made after the date of the Act and before the date of the Ordinance but possession had not been obtained. In 1953 <ORG> enacted the Calcutta <NAME> Tenancy Amendment Act, 1953, revising permanently the definition of <NAME> tenant and making some, other  and 29 of the Original Act were omitted. The principal question before us in this appeal is whether the provisions of s. 28 could be applied by a <ORG> in a case where an application had been made by a tenant for relief under that section and such application was pending for disposal on the date the omission became effective, by reason of the Amend- ment Act coming into force.

The decree for possession with which we are concerned in this case was made as far back as August 8, 1941, by a <NAME> in <NAME>. The tenant's appeal was dismissed on April 9, 1943. On February 28, 1949, on which date the Calcutta Thika Tenancy Act of 1949 came into force, proceedings for the execution of the decree of ejectment were pending in the <NAME>'s Court. On March 19, 1952, when these proceedings were still pending the tenant made an application to the Court which had passed the decree praying that the decree may be rescinded or varied in accordance with the provisions of s. 28 of the Act. This application came up for hearing before the <NAME> on July 7, 1953. In the meantime the Amendment Act of 1953 had come into force and the omission of s. 28 of the Act had become effective. The learned <NAME> held that s. 28 of the Act being no longer in force he had no power to give the tenant any relief in accordance with the provisions thereof. In that view he dismissed the application. The tenant's appeal to the District Judge, <NAME>, having been rejected, he preferred a second appeal to <ORG>. The learned judges of <ORG> who heard the appeal agreed with the courts below on a construction of s. 1(2) of the Amendment Act that s. 28 was not applicable to the proceedings commenced by the tenant by his application for relief and dismissed the Against that decision the tenant has filed the present appeal before us on a certificate of fitness granted by <ORG>.

The decision of the question raised in this appeal, viz., whether this tenant who had applied for relief under s. 28 when that section was in force is entitled to have his application disposed of in accordance with the provisions of that section though it remained undisposed of on the date the Amendment Act came into force, depends on the interpretation of s. 1 , sub-s. (2) of the Amendment Act . This section is in these words:

"It shall come into force immediately on the Calcutta Thika Tenancy (Amendment) Ordinance, 1952, ceasing to operate: Provided that the provisions of the Calcutta Thika Tenancy Act, 1949, as amended by this Act, shall, subject to the provisions of s. 9 , also apply and be deemed to have always applied to all suits, appeals and proceedings pending-

(a) before any Court, or

(b) before the Controller or

(c) before a person deciding an appeal under section 27 of the said Act, on the date of the commencement of the Calcutta Thika Tenancy (Amendment) Ordinance, 1952."

It is obvious and indeed undisputed that but for any difficulty that may be placed in the tenant's way by these provisions the tenant would in view of the provisions of s. 8 of the Bengal General Clauses Act be entitled to have his application for relief under s. 28 of the original Act disposed of as if s. 28 still continued. If however a contrary intention has been expressed by the <ORG> in its amending Act the contrary intention would prevail. What we have to decide is whether in s. 1 , sub-s. (2), the <ORG> has clearly expressed an intention that no relief under s. 28 of the original Act shall be given in cases like these.

The principles that have to be applied for interpretation of statutory provisions of this nature are well-established. The first of these is that statutory pro. visions creating substantive rights or taking away substantive rights are ordinarily prospective; they are retrospective only if by express words or by necessary implication the <ORG> has made them retrospective; and the retrospective operation will be limited only to the extent to which it has been so made by express words, or by necessary implication. The second rule is that the intention of the <ORG> has always to be gathered from the words used by it, giving to ,the words their plain, normal, grammatical meaning. The third rule is that if in any legislation, the general object of which is to benefit a particular class of persons, any provision is ambiguous so that it is capable of two meanings, one which would preserve the benefit and another which would take it away, the meaning which preserves it should be adopted. The fourth rule is that if the strict grammatical interpretation gives rise to an absurdity or inconsistency such interpretation should be discarded and an interpretation which will give effect to the purpose the <ORG> may reasonably be considered to have had will be put on the words, if necessary, even by modification of the language used. In applying these principles to the interpretation of S. 1(2) , it is necessary first to consider a contention that has been raised by Mr. <NAME> on behalf of the appellant that the phrase " as amended by this Act " qualifies the word " provisions ". If this be correct, the meaning of the proviso will be that only those provisions of the Act which have been amended by the Act shall apply and be deemed to have applied always to pending proceedings. This will become meaningless, the argument continues, if the word " amended " is interpreted to include omissions. For it makes no sense to say that a provision which has been omitted shall apply. So, it is argued, the word " amended " should be interpreted to mean only amendment by additions or alterations and not an amendment by omissions. The result of the proviso, the appellant's counsel contends, is to make applicable to pendinn proceedings the altered provisions in place of old provisions but to say nothing as regards such provisions which have been omitted.

We are unable to see how it is possible, unless rules of grammar are totally disregarded to read the words as amended by this Act " as to qualify the word provisions." If ordinary grammatical rules are applied there is no escape from the conclusion that the adjectival phrase " as amended by this Act " qualifies the proximate substantive, viz., the Calcutta, Thika Tenancy Act, 1949. There is no escape from the conclusion therefore that what the <ORG> was saying by this was nothing more or less than that the provisions of the amended Thika Tenancy Act shall apply.

Mr. <NAME> argued that if that was what the <ORG> wanted to say, it was reasonable to expect it to use the words " The Thika Tenancy Act, 1949, as amended by this Act," in the proviso; and there was no reason for the use of the words " the provisions of the Thika Tenancy Act ". We are not impressed by this argument. The <ORG> might certainly have used the language as suggested by the learned counsel, and as be says, that would have meant an economy of words. But where there are two ways of saying the same thing it is useless to speculate why one way was adopted in preference to the other. It is not unusual to find draftsmen using the words " provisions of the Act " in many statutes where the words " the Act " would have been adequate; and it would be unreason. able to try to read too much in the use of the words " the provisions of the Thika Tenancy Act " instead of " The Thika Tenancy Act " in the proviso.

Even so the learned counsel contends, there is no reason to read " amendments "' so as to include omissions. The word " amendment ", he has submitted is sometimes used in the restricted sense of "addition" or " a alteration" as distinct from omission; and he asks us to read the word " amended " in the proviso, to mean only alterations or additions in the statute, and as not including omissions. It is unnecessary for us in the present case to express any opinion on the general question whether in certain context the word " amended " should be interpreted so as to exclude omissions. What is clear however is that the present is not one of such cases. The amendment Act itself was being called the Calcutta Thika Tenancy (Amendment) Act, 1953. The preamble says " whereas it is expedient to amend the Calcutta Thika Tenancy Act, 1949 ". Section 2 of this amendment Act substitutes a new clause for the old el. (5) of s. 2 ; s. 3 adds some words to el. (1) and s. 3(b) omits some words in cl. (4) and again adds some words to cl. (5) of s. 3 of the Act. Section 4 omits certain words of sub-s. (1) of s. 5 . Section 5 substitutes some new words in place of certain words in the original sub-ss. (1) and (2) of s. 10 of the Act. Section 6 omits one section of the original Act, viz., s. 1  1 ; s. 7 inserts some words in the original s. 27 ; section 8 omits two sections, viz., ss. 28 and 29 ; the last section, s. 9 provides for the continuance of proceedings under s. 5 , sub-s. (2) of the Amendment Ordinance if sub-ss. (2), (3) and (4) thereof were in force.

Reading the Amendment Act as a whole there can be no doubt that the <ORG> in. using the word " amended " in the proviso to sub-s. (2) of s. 1 sought to make no distinction between amendment by additions, alterations or omissions. It is clear when certain words or sections have been added, altered or omitted by the Amendment Act , the Calcutta Thika Tenancy Act, 1949, took on a new shape with some added features, some altered features and minus those features which have been omitted. What the proviso says is that the Calcutta Thika Tenancy Act in its new shape shall apply and shall be always deemed to have applied to proceedings pending before a <ORG>, a Controller or an appellate authority under s. 27 on the date of the commencement of the Thika Tenancy Amendment Ordinance, 1952. As the application which the appellant had made for relief under s. 28 of the Tenancy Act was pending for disposal before the <NAME>'s court on October 21, 1952, the date of the commencement of the Calcutta Thika Tenancy (Amendment) Ordinance, 1952, the position which cannot be escaped is that the Thika Tenancy Act of 1949 without the provisions as regards relief to tenants against whom decrees had been obtained on the date of the commencement of the original Act but possession had not been actually recovered would be applied to pending applications. In other words, though the application originally was for relief under s. 28 no such relief could be granted, the section having ceased to exist retrospectively.

It is helpful to remember in this connection the fact that while s. 28 of the original Act was giving certain tenants a right to relief which they would have had if the beneficent provisions of the new Act were available to them during the disposal of the suits the manner in which the right is given is by conferring on courts a power to rescind or vary decrees or orders to bring them into conformity with the provisions of the, Act. As soon as s. 28 was omitted the courts ceased to have any such power. The effect of the proviso in its strict grammatical meaning is that the courts shall be deemed never to have had this power in respect of applications which were still pending. The inevitable result is that the <ORG> having been deprived of the power to give relief even in respect of applications made at a time when the power could have been exercised, was bound to dismiss the applications.

There can be no doubt that this is an unfortunate result. It may very well be true that if as a result of the Amendment Act , many tenants are deprived of the benefit of s. 28 , this will be mainly because of the <ORG>'s inability to dispose of the applications before the Amendment Act came into force and not for any default on their part. Mr. <NAME> has repeatedly stressed this and has asked us to construe s. 1 (2) in a way that would retain the benefits of s. 28 to tenants whose applications remained to be disposed of on the crucial date. He has in this connection emphasized the fact that the Amendment Act itself is a piece of beneficent legislation and that the amendments made by ss. 2 , 3 , 5 and 9 all extend to tenants benefits to which they would not have been entitled under the original Act. This extension of further benefits to tenants, he says, is a guiding principle of the amending legislation. He points out also that except as regards such pending applications under s. 28 the effect of s. 1(2) of the amending Act will be to give the extended benefits to tenants in pending, proceedings. It will be incongruous, he argued, that while all tenants stand to benefit by the amending legislation only those whose applications under s. 28 have, for no fault of theirs, remained pending would be deprived of the benefit they would have had but for the omission in the amending Act, of s. 28 . It is difficult not to feel sympathy for these tenants. As we have already mentioned it is a sound rule of interpretation of beneficent legislation that in cases of ambiguity the construction which advances the beneficent purpose should be accepted in preference to the one which defeats that purpose. In their anxiety to advance the beneficent purpose of legislation courts must not however yield to the temptation of seeking ambiguity when there is none. On a careful consideration of the language used by the <ORG> in s. 1(2) we are unable to see that there is any such ambiguity. The language used here has one meaning only and that is that the Act in its new shape with the added benevolent provisions, and minus the former benevolent provisions in s. 28 has to be applied to all pending proceedings, including execution proceedings and the proceedings pending under s. 28 of the original Act on October 21, 1952. There is therefore no scope for applying in this case the principles of interpretation which are applicable in cases of ambiguity.

Nor is it possible to agree with Mr. <NAME>'s last contention that the strict grammatical interpretation would result in an absurdity or inconsistency. It is urged that it is unthinkable that the <ORG> when undertaking a legislation to help tenants would do anything to deprive them of the existing benefits under s. 28 . It is in our opinion useless to speculate as to why the <ORG> thought it right to take away the benefit. One-reason that suggests itself is that the <ORG> might have thought that where landlords had already been deprived of the fruits of the decrees they had obtained for a long period from the date when the original Act came into force up to the time when the Amendment Act came into force, it would not be right to continue that deprivation. But whatever the reasons may be the fact remains that the <ORG> has used words which in their normal grammatical meaning show that they intentionally deprived this class of tenants, viz., those whose applications under s. 28 of the Act were undisposed of on the date the Ordinance came into force, and remained undisposed of, even when the Amendment Act came into force.

We have therefore come to the conclusion that the view taken by <ORG> in this case that the effect of s. 1(2) of the Calcutta Thika Tenancy (Amendment) Act, 1953, is that all pending applications under s. 28 of the original Act must be dismissed is correct. The contrary view taken by the same <ORG> in <CITATION> (1) and other cases is not correct. Before we part with this appeal, however, it is our duty to refer to one incidental matter. We have noticed with some regret that when the earlier decision of two judges of the same <ORG> in <NAME>'s Case was cited before the learned judges who heard the present appeal they took on themselves to say that the previous decision was wrong, instead of following the usual procedure in case of difference of opinion with an earlier decision, of referring the question to a larger Bench. Judicial decorum no less than legal propriety forms the basis of judicial procedure. If one thing is more necessary in law than any other thing, it is the quality of certainty. That quality would totally disappear if judges of co-ordinate jurisdiction in a <ORG> start overruling one another's decisions. If one <ORG> of a <ORG> is unable to distinguish a previous decision of another <ORG>, and holding the view that the earlier decision is wrong, itself gives effect to that view the result would be utter confusion. The position would be equally bad where a Judge sitting singly in <ORG> is of opinion that the previous decision of another single Judge on a question of law is wrong and gives effect to that view instead of referring the matter to a larger Bench. In such a case lawyers would not know how to advise their clients and all courts subordinate to <ORG> would find themselves in an embarrassing position of having to choose between dissentient judgments of their own <ORG>.

As far as we are aware it is the uniform practice in all the <ORG> in India that if one Division Bench differs from an earlier view on a question of law of another Division Bench, a reference is made to a larger Bench. In <ORG> a rule to this effect has been in existence since 1867. It is unfortunate (1) (1953) 58 C.W.N. 64.

that the attention of the learned judges was not drawn in the present case to that rule. But quite apart from any rule, considerations of judicial propriety and decorum ought never to be ignored by courts in such matters. On the merits, as we have found that the view of law taken by <ORG> in this case is correct, the appeal is dismissed.

In view however of the uncertainty that was in the law as regards the applicability of s. 28 to proceedings pending on the commencement of the Thika Tenancy Ordinance, 1952, we order that the parties will bear their own costs. Appeal dismissed.


JUDGMENT

1. This application is one for revision of a decree made by <ORG> dismissing the plaintiffs' suit on the ground of limitation. The suit was brought upon a bond dated the 19th day of November 1909. The money was re-payable within three years from the date of the bond and the interest was payable monthly but the bond contained a further stipulation that if default was made in payment of interest, the interest should be added to the principal and further interest charged. On default of payment of interest the holder of the bond was entitled, at his option, either to sue forthwith to recover the amount or to await the stipulated period. The <ORG> below seems to have decided the case on the authority of the ruling in <CITATION> 28 Ind. Cas. 910 ; 13 A.L.J. 510 37 A. 400. That case was decided as being a case to which Article 132 of the Schedule to the Limitation Act applies. That Article provides that the period of limitation for the enforcement of payment of money charged upon immoveable property shall be the period of 12 years from the date upon which the money sued for became due." The <ORG> in that case had to consider when the money sued for had become due within the meaning of the expression in the Article. In the present case the instrument sued upon was a single bond which specified a day for payment, namely, three years from the date of the bond. We think this is the date which must regulate the priod of limitation. The Article which applies is Article 66 , The particular provision in this bond which provided that the creditor had the option of suing at once or waiting until the prescribed period is immaterial for the purpose of computing the period for limitation. The creditor must be presumed to have exercised the option which was clearly given to him by the terms of the bond. We allow the application, set aside the decree of the <ORG> below and remand the case to that <ORG> with directions to re-admit the suit in its original number and to proceed to hear and determine the same according to law. The costs of this application will be costs in the cause.