JUDGMENT <NAME>, J.

1. Upon a direction having been issued by this court by an order dated September 15, 1989, passed on the application of the applicant (assessee) under Section 256(2) of the Income-tax Act, 1961, <ORG>, <ORG>, Jabalpur, has drawn up a statement of the case and referred the following question of law arising out of the order of the said <ORG> :

" Whether, on the facts and in the circumstances of the case, the provisions of Section 161(1) of the Income-tax Act, 1961, were applicable and the assessee could not be assessed as an association of persons ? "

2. The applicant is a private trust which was created by the settlor, <NAME>, vide a registered settlement deed on November 26, 1979. The trust was formed with a capital of Rs. 1,000 for the benefit of seven persons of whom two were major and five were minor children. The relevant clauses of the settlement deed read as follows :

"2. For effecting the settlement, he, the settlor, doth hereby transfer and assign up to the trustees all the said sum of Rs. 1,000 (rupees one thousand only) by cash and his beneficial interest in the said sum and to have and to hold the said sum and the income thereof upon the trust and for the purpose hereinafter declared of and concerning the same.

3. For the consideration aforesaid, the trustees hereby covenant with the settlor, his heirs, executors and administrators that the trustees and other trustees for the time being shall stand and be possessed of the said sum of Rs. 1,000 and all income arising thereof upon the trust and with and subject to the powers and the provisions hereinafter declared of and concerning the same.

4. (a) The date of distribution means the day on which shall expire the period of 20 years after execution of the settlement or such earlier or later day as the trustees may in their absolute discretion at any time after the execution of this settlement by deed, appoint to be the date of distribution.

(b) Subject to the above provisions and other conditions of this deed, the share of each beneficiaries in the annual or other income and the assets of the trust for the time is as follows :

1. Master <NAME> 15 per cent.

2. Master <NAME> 15 per cent.

3. Smt. <NAME> 14 per cent.

4. Miss <NAME> 14 per cent.

5. Smt. <NAME> 14 per cent.

6. Master <NAME> 14 per cent.

7. Master <NAME> 14 per cent.

100 per cent.

3. Provided that in case where any of the beneficiaries dies or retires on becoming major by intimation of his retirement to the trustees before the expiry of determination of the trust, the share of income due to the deceased/retiring beneficiary shall be payable equally to all the surviving beneficiaries.

4. Provided also that in case where the beneficiary No. 4, i.e., Miss <NAME>, gets married before the determination of the trust, her share in the income assets and the trust fund shall cease and that share shall be payable equally to all the surviving beneficiaries.

5. Provided further that where any money is advanced by any beneficiary or his/her guardian on behalf of the beneficiary as a loan for any business of the trust, interest shall be allowed on such money at such rate as may be agreed upon before determining the residue of annual or other income to be divided amongst the beneficiaries and such interest shall be payable to such beneficiary in addition to his/her share in the residue of annual or other incomes.

6. The trustees are under the deed itself <NAME>, and <NAME>."

7. The assessee-trust carried on the business of silver and potato and earned a profit of Rs. 10,417 from the said business. The contention of the assessee in regard to the business was that assessment should be made in the status of association of persons and that since the shares of the beneficiaries have been indicated in the trust deed, the income from the trust has to be assessed in the individual hands of the beneficiaries. This claim was negatived by the Income-tax Officer and the appeal filed by the assessee before the Appellate Assistant Commissioner was also dismissed. The Appellate Assistant Commissioner was of the view that even though shares of the beneficiaries had been specifically mentioned, the same were to be distributed after 20 years from the date of creation of the trust and till that time, there was no question of any distribution, the income belonged to the trust only and not to the beneficiaries. The income was, thus, taxable in the hands of the trust under Section 161(1) of the Act.

8. The trust carried the matter to the <ORG> in second appeal and the <ORG> allowing the appeal in part in relation to the objection of the status of the assessee, directed assessment in the status of an association of persons.

9. We have heard learned counsel for the parties and perused the record.

10. <CITATION>  138 ITR 19, their Lordships of <ORG> have observed (headnote) :

" Body of individuals is a new classification in the fiscal statute. Right from 1939, if not from 1922 onwards, the Income-tax Act had known and recognised the distinct category of taxpayers going by the name of association of individuals or association of persons. Although the expressions were left undefined, courts used to associate this class of persons with certain attributes, chief amongst which was their being associated in a common endeavour for producing taxable income. This at once excluded from the category those who found themselves thrown together by the accident of their birth, by the accident of another's death, by the accident of testamentary dispositions, and so on. To hold, therefore, that 'a body of individuals' must be equated to an 'association of persons' would be to disregard the stage-by-stage evolution of the statutory classification of the different kinds of taxpayers under Section 2(31) of the Income-tax Act, 1961. The difference between an association and a body is too pronounced to be slurred over. While an 'association' might well connote an active element of combining or associating, a 'body' would include even a comparatively inert mass of people or institution. The only essential attributes of a body of individuals are that there should be a plurality of individuals and they must, in the gross, have a nexus to a source of income. This conception at once excludes the crucial characteristics which we associate with an association of persons, such for instance, as a common intention and a common activity to produce taxable income. In other words, persons who do nothing but stand and wait may not be an association of persons ; but, they may yet be a body of individuals, if they stand together, and wait for something to be shared between them. It would be a matter for the income-tax authorities as well as the <ORG> and the courts to consider the facts in each case to find out if any given group of people are to be regarded as a body of individuals or not. The individuals concerned may have something or other in common which brings them together with reference to an income or its source ; it may be common intention ; it may be common holding out ; or it may be a sharing of common spoils. The list is not exhaustive. Nor is it necessary that all these characteristics must be present in every case. Much might depend on the relationship in the gross to the income or to the income-yielding asset in question."

11. In the case in hand, it is clear that in accordance with the terms of the settlement deed, the beneficiaries had no role to play in the business carried on by the trust and the entire income was to remain with the trust till its distribution as expressed in Clause 4(a) of the settlement deed. Thus, the beneficiaries were not required to do anything but to stand and wait for something to fall to their respective shares in accordance with the settlement deed. They were merely, thus, body of individuals and not an association of persons with any intention to carry on a common activity to produce taxable income.

12. <CITATION>  188 ITR 224, their Lordships of <ORG> have observed (headnote) :

" Trustees who are authorised to carry on business under the terms of a deed of trust are not in the same position as receivers. An association of persons as used in Section 3 of the Income-tax Act means an association in which two or more persons join in a common purpose or common action, and as the words occur in a section which imposes a tax on income, the association must be one the object of which is to produce income, profits or gains. Trustees derive their authority to carry on business, not from the beneficiaries, but from the settlor under the terms of the deed of trust. They do not require the consent of the beneficiaries for exercising their authority under the deed of trust. The authority is conferred on them by the settlor. The beneficiaries are mere recipients of the income earned by the trust. They have not come together for a common purpose. They cannot, therefore, be considered as an association of persons or a body of individuals."

13. The situation in the present case is no different. In the present case, the income accrued to the trust without the beneficiaries having any right to receive it and it was clearly a case where the assessment of the trust on receipt of the said income would be made under Section 161(1) of the Income-tax Act.

14. Accordingly, the reference is answered against the assessee and in favour of the <ORG>.


PETITIONER: <ORG>. Vs. RESPONDENT: STATE OF BOMBAY DATE OF JUDGMENT: 23/04/1965 BENCH: GAJENDRAGADKAR, P.B. (CJ) BENCH: GAJENDRAGADKAR, P.B. (CJ) WANCHOO, K.N. SHAH, J.C. DAYAL, RAGHUBAR SIKRI, S.M. BACHAWAT, R.S. <NAME>, V. CITATION: 1965 AIR 1942 1966 SCR (1) 64 CITATOR INFO : R 1966 SC 893 (18) MV 1966 SC1089 (43,46,47,48,51) R 1966 SC1412 (5,15) R 1966 SC1738 (4,6,7) RF 1967 SC 1 (56) E 1968 SC 271 (12) E 1969 SC 78 (19,21,26,30,32,35) RF 1975 SC2238 (22) R 1977 SC 955 (15,16,23) ACT: Bombay Sales Tax Act, 1946 (5 of 1946), s. 20-Suits to challenge assessments made under Act and rules made thereunder barred-'Outside' sales wrongly assessed as 'inside' sales--Suit to recover tax wrongly charged whether lies,. HEADNOTE: The appellant, a public limited company manufacturing and selling textiles was a 'dealer' under the Bombay Sales Tax Act 1946. For the period 26th January 1950, to 31st March 1951, it was assessed to sales tax oncertain sales which were treated by <ORG> as 'inside'sales but which according to the decision of <ORG> in <CITATION> .  2 S.C.R.603, delivered on 6th September 1955, were 'outside' sales non-taxable under the Act. After the above decision the appellant discovered that it had been illegally subjected to tax in respect of the said 'outside' sales. The period for remedies under the Act having expired, it filed a suit for the recovery of sales-tax illegally collected from it in respect of the 'outside' sales. On behalf of the respondent <ORG> the plea taken in defence was that the suit was barred by s. 20 of the Act. Accepting the plea, the trial court dismissed the suit. <ORG>, in appeal, took the same view, whereupon, with certificate, the appellant came to this Court. The questions, arising out of the arguments on behalf of the appellant, which fell for determination were : (1) whether an assessment in violation of a statutory provision could claim the status of an assessment made under the Act, within the meaning of s. 20; (2) whether the decision by the appropriate authority as to the nature of the transaction was a decision on a collateral fact, the finding on which alone conferred jurisdiction on the authority to levy the tax, or was it a decision on a question of fact which had to be determined by the authority itself as one of the issues before it ? (3) Whether s. 20 was valid if construed as being a complete bar to a suit such as filed by the appellant. HELD :(i) Section 20 protects "assessment made under the Act, or the rules made thereunder" by appropriate authorities. In Firm and Illuri Subbaya Chetty and Sons this Court, interpreting a similar provision in s. 18A of the Madras General Sales Tax Act observed that the ex- pression "any assessment made under this Act" was wide enough to cover all assessments made by the appropriate authorities under the Act whether the said assessments were correct or not. There can be little doubt. that the clause "an assessment made" cannot mean on assessment properly and correctly made. [72 B-D] In its plaint the appellant was undoubtedly calling into question the assessment order made against it and such a challenge was plainly prohibited by s. 20. [72C] 65 <CITATION> ,  1 S.C.R. 752, relied on. (ii)If the relevant provisions which confer jurisdiction on the appropriate authorities to levy assessment on the dealers in respect of transactions to which the charging section applies are examined, it is impossible to escape the conclusion that all questions pertaining to the liability of the dealers to pay assessment in respect of their transactions are expressly left to be decided by the appropriate authorities under the Act as matters falling within their jurisdiction. Whether or not a return is correct; whether or not transactions which are not mentioned in the return, but about which the appropriate authority has knowledge, fan within the mischief of the charging section-, what is the true or real extent of the transactions which are assessable; all these and other allied questions have to be determined by the appropriate authorities themselves, and so it is impossible to accept the argument on behalf of the appellant that the finding of the appropriate authority that a particular transaction is taxable under the provisions of the Act, is a finding on a collateral fact which gives the appropriate authority jurisdiction to take a further step and make the actual order of assessment. The whole activity of assessment beginning with the filing of the return and ending with the order of assessment falls within the jurisdiction of the appropriate authority and no part of it can be said to constitute a collateral activity not specifically and expressly included in the jurisdiction of the appropriate authority as such. [75 D-H] If the appropriate authority while exercising its jurisdiction and powers under the relevant provisions of the Act, holds erroneously that a transaction which is an outside sale is not an outside sale and proceed,-, to levy sales-tax on it cannot be said that the decision of the appropriate authority is without jurisdiction. [78B] <CITATION> , 15 S.T.C. 144 and <CITATION> . 600 of 1964 decided March 26. 1965, distinguished. <CITATION> .  1 S.C.R. 776, relied on. <CITATION> ,  3 S.C.R. 792, Secretary of <ORG>, represented by the <CITATION> . 67 I.A. '222' Raleigh Investment. Co. Ltd. v. Governor-General inCouncil, L.R. 74 I.A. 50 Pyx Granite Co. Ltd. v. Ministryof Housing JUDGMENT:

Yiewsley and West Dryton Urban District Council, [1957] 2 Q.B. 136, referred to.

(iii)If it appears that a statute creates a special right or liability ind provides for the determination of the right or 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 deter- mined 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. Such an enquiry would have relevance in the present case in construing the terms of s. 20 as well as in considering the question of the constitutionality of s. 20. If the court was satisfied that the Act provided no remedy to make a claim for the recovery of illegally collected tax and yet s. 20 prohibited such a claim being made before an ordinary civil court, the court might hesitate to construe s. 20 as creating an absolute bar, or if such a construction was not reasonably possible the court might seriously examine the question about the constitutionality of such express exclusion of the civil court's jurisdiction having regard to the provisions of Arts. 19 and 31 of the Constitution. [82 C-F; 83 <CITATION> lal Saraf,  S.C.R. 1350 and Commissioner for Motor Transport <NAME> & Co. Pty. Ltd. State of New South Wales and Ors. v. <ORG>  3 All E.R. 106, referred to.

(iv)From an examination of the relevant provisions of the Act it was clear that the appellant could have either appealed or applied for revision and prayed for condonation of delay on the ground that the mistake which was responsible for the recovery of the tax illegally levied was discovered on the 6th of September 1955, because such a plea would have been perfectly competent under s. 22B. In other Words if the appellant had pursued a remedy available to it under s. 21 or s. 22 read with s. 22B, its case would have been considered by the appropriate authority and the validity of the grounds set up by it for the refund of the tax in question would have been legally examined. Therefore it could not be said that even for the claim which the appellant sought to make in the present suit, there was no alternative remedy prescribed by the Act. [85 A-C] The above conclusion served a double purpose. It made it easier to construe the wide words used in s. 20 and hold that they constituted an absolute bar against institution of the present suit and it also helped the respondent to repel the plea of the appellant that s. 20 if so widely construed was unconstitutional. The conclusion therefore followed that s. 20 had to be construed in the same manner as s. 18A of the Madras General Sales Tax Act was construed by this Court in <ORG> and <NAME> and Sons and even on this wide construction the section was constitutionally valid. [85 D-E]

(v)Although the suit filed by the appellant in so far as it related to the recovery of tax illegally collected was barred by s. 20, it was not barred in so far as it challenged the validity of s. 20, itself. In terms s. 20 is confined to cases when the validity of assessment orders made under the Act is challenged. It cannot take in a challenge to the validity of the section itself. But this finding could be of no material assistance to the appellant because even if it succeeded on this point it still had to face the plea of the respondent that on merits the suit was barred. [85H] & CIVIL APPELLATE JURISDICTION : Civil Appeal No. 481 of 1963. Appeal from the judgment and order, dated August 7, 1961 of <ORG> in Appeal No. 51 of 1960. <NAME> and 1<NAME>, for the appellant.

<NAME>, Solicitor-General, <NAME> and <NAME>, for the respondent.

<NAME>, for intervener No. 1. <NAME>, for intervener No. 2.

<NAME> and <NAME>, for intervener No. 3.

6 7 <NAME> and <NAME>, for intervener No.4.

<NAME>, Advocate-General, Madras, <NAME> and <NAME>, for intervener No. 5. <NAME>, for intervener No. 6.

<NAME>, Advocate-General, Rajasthan, <NAME> and <NAME>, for intervener No. 7.

<NAME> and <NAME>, for intervener No. 8. B. SEN, <ORG> and <NAME> for <NAME> for intervener No. 9.

<NAME>, Advocate-General, Andhra Pradesh and <NAME>, for intervener No. 10.

The Judgment of the Court was delivered by <NAME>, <NAME> The principal point of law which arises in this appeal is whether <ORG> was right in holding that the suit filed by the appellant, <ORG> against the respondent, the State of Bombay, was incompetent. The appellant is <ORG> and owns a textile mill at Bombay. It carries on business of manufacture and sale of textile cloth. During the period 26th January, 1950 to 31st March, 1951, the appellant was registered as a "Dealer" under the provisions of the Bombay Sales Tax Act, 1946 (No. V of 1946) (hereinafter called 'the Act'). The appellant's case is that during the said period, it sold goods inside and outside the then State of Bombay. The total value of goods sold by the appellant outside the State of Bombay was Rs. 40,20,623-12-0 and Rs. 1,08,946-14-0. On the said sales of Rs. 40,20,623-12-0 General Sales Tax of Rs. 61,885-12-0 was levied, where on the sales of Rs. 1,08,946-14-0 Special Sales Tax of Rs. 3,301-8-0 was levied. The total Sales Tax thus levied against the appellant in respect of the outside sales during the relevant period was Rs. 65,187-4-0.

On December 20, 1956, the appellant instituted the present suit (No. 402 of 1956) on the Original Side of <ORG>, and claimed to recover the said amount from the respondent on the ground that it had been illegally levied against it. According to the appellant, the illegality of the impugned assessment, levy, imposition and collection was discovered by it soon after this Court pronounced its judgment in <CITATION> , (1) on the 6th September, (1) 2 S.C.R. 603.

1955. The appellant's case further was that s. 20 of the Act did not bar the institution of the present suit; and, in the alternative, if it was held that it created a bar, the said section was ultra vires the Constitution of India and void.

The claim thus made by the appellant was resisted by the respondent on several grounds. One of the pleas raised by the respondent was that the <ORG> had no jurisdiction to entertain the suit. It was urged by the respondent that s. 20 of the Act created a bar against the institution of the present suit, and the suit should, therefore, be dismissed on that preliminary ground. The respondent also contended that the plea raised by the appellant that the said section was ultra vires the Constitution was without any substance. On the merits, the respondent pleaded that the appellant was not justified in claiming a refund of the amount of tax recovered from it for the sale transactions in question. On these pleadings, the learned trial Judge framed nine issues. Issue No. 2 was in regard to the jurisdiction of the <ORG> to entertain the suit. This issue was tried by the learned trial Judge as 3a preliminary issue. He held that s. 20 of the Act was a bar to the institution of the present suit, and on that view, he upheld the Plea raised by the respondent. In the result, the appellant's suit was dismissed.

The appellant challenged the correctness of the said decision by preferring an appeal before <ORG> of the said <ORG> under Clause 15 of the Letters Patent. <ORG> agreed with the view taken by the learned trial Judge and dismissed the appeal preferred by the appellant. The appellant then applied for and obtained a certificate from the said <ORG> and it is with the said certificate that it has come to this Court in appeal. When this appeal was argued before <ORG> of this Court on March 23, 1964, Mr. <NAME> for the appellant contended that in addition to the point which had been decided by the <ORG>, he wanted to urge that s. 20 of the Act was invalid. The case which was thus presented by Mr. <NAME> was that on a fair and reasonable construction, it should be held that s. 20 does not create a bar against the institution of the present suit. If, however, it was construed to create a bar, it was constitu- tionally invalid. It appears that though this alternative plea bad been taken by the appellant in its plaint, no issue was framed in respect of it and naturally, the point has not been considered either by the learned trial. Judge_ or by <ORG> which heard the Letters Patent Appeal. Even so, <ORG> of this Court which heard the appeal, allowed Mr. <NAME> to raise his alternative contention, and so, the appeal was ordered to be placed before <ORG>. The appeal then came on for hearing before <ORG> on April 10, 1964. After it was argued for sonic time the Court decided to issue notices to the Advocates-General of different States, because it was felt that the question about the constitutionality of s. 20 of the Act which the appellant wanted to raise was of considerable importance and different States may be interested in presenting their case before this Court, for a provision similar to that of the impugned section would be found in Sales Tax statutes passed by many State legislatures. That is why this Court directed that notices should be served on the Advocates-General of all States and the matter should be placed for hearing before <ORG>. That is how this matter has been placed before <ORG> for final disposal. For the appellant, Mr. <NAME> has urged two points before us. He argues that on a fair construction of s. 20, it should' be held that the present suit is outside the mischief of the said section. In the alternative, he contends that if s. 20 creates a statutory bar against the institution of a suit like the Present, it should be held ultra vires the Constitution.

Before dealing with the points raised in this appeal, it would be necessary to refer to one fact which is not in dispute. The Act was passed in 1946 and it came into force on March 8, 1946. At that time, the word as defined by s. 2(g) of the Act would have taken in all sales whether they were inside sales or outside sales. After the Constitution was adopted on January 26, 1950, Art. 286 came into force and it protected certain sales specified by it from the purview of State taxation. It may theoretically be true, that as soon as Art. 286 became effective, the expression "sale" as defined by the Act was automatically constitutionally controlled by the limitations prescribed by it. To make this position clear, however, Bombay Ordinance If of 1952 was passed and by s. 3, it added s. 30 to the Act. In effect, s. 30 introduced in the Act the relevant provisions prescribed by Art. 286 of the Constitution, so as to bring the operation of the Act expressly in conformity with the said constitutional provision. Section 3 further made it clear that the addition made by it by introducing s. 30 in the Act shall be made and shall always be deemed to have been made in the said Act as so continued in force, with effect from the 26th January, 1950.

It is well-known that the controversy in regard to the interpretation of Art. 286 began with the decision of this <ORG> in the <CITATION> (1), and ended with the subsequent decision, of this <ORG> in the case of <ORG>) In order to alleviate the economic crisis which was likely to result in view of the subsequent decision of this <ORG>, the President promulgated the Sales Tax Validation Ordinance, 1956 on January 30, 1956, the provisions of which were later incorporated in the Sales Tax Validation Act , 1956. This Act validated sales tax collected by different <ORG> from 1st April, 1951 to 6th September, 1955 in accordance with the principles laid down by this <ORG> in <ORG> case. The sales-tax similarly collected between 26th January 1950 to 31st March, 1951 was also sought to be validated by the Sales Tax Continuance Order, 1950. If we had reached the stage of considering the merits about the validity of the recovery of tax in the present case, it would have become necessary for us to consider the effect of this Continuance Order. Mr. <NAME> contends that notwithstanding the Continuance Order, the recovery of the tax is illegal and that is the main foundation .of his argument before us. The present dispute between the parties, according to Mr. <NAME>, is thus essentially similar to other disputes between assessees and the respective <ORG> where through mistake, tax was collected or paid in regard to transactions which were relates to the construction of s. 20 . Let us read the said section :

We will now revert to the main points of law raised before us for our decision. The first question which must be considered relates to the construction of s. 20 . Let us read the said section "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".

Mr. <NAME> contends that s. 20 can have no application to the present suit, because the order of assessment which the appellant seeks to challenge in the present proceedings has been made by the relevant Sales-tax authorities without jurisdiction. He concedes that even though an order of assessment made under the Act may be passed on a wrong conclusion of fact, it cannot be challenged by a suit having regard to the provisions of s. 20 . In other words, an erroneous order of assessment made under the Act would be (1)  S.C.R. 1069.

(2) [1955] 2 S.C.R. 693.

entitled to the protection of S. 20 ; but the said protection cannot be claimed by an order which is passed without jurisdiction. According to Mr. <NAME>, the impugned assessment contravenes the provisions of Art. 286 and as such, is invalid. What the assessment order purported to tax was an outside sale and it was beyond the competence of the authority to make the said order. Indeed, it was beyond the competence of <ORG> to levy a tax in respect of an outside sale; and so, on the ultimate analysis, the impugned assessment is without jurisdiction and it cannot, therefore, be said to be an assessment made under the Act within the meaning of S. 20 .

Mr. <NAME> did not dispute the fact that the argument thus presented by him would be equally applicable to cases of assessment made erroneously in respect of transactions which are otherwise statutorily exempted from the operation of the Act. If a <ORG> statute exempts certain transactions from the purview of its charging section, and the appropriate authority makes an order of assessment in respect of such an exempted transaction,, the assessment would be beyond its jurisdiction and can be impeached by a suit; s. 20 will not protect such an assessment. No doubt, Mr. <NAME> emphasised the fact that the constitutional pro- hibition against an assessment in respect of outside sales stood on a much higher pedestal than the prohibition by a statutory provision in a <ORG> Act . The first prohibition is a constitutional prohibition and its breach would entitle a citizen to claim the protection of Art. 265 and Art. 31(1); but, on principle, according to Mr. <NAME>, a transaction which is exempted from assessment either by virtue of Art. 286 or by virtue of any specific statutory provision, cannot be validly assessed, and an assessment made in respect of it cannot claim the status of an assessment made under the Act within the meaning of s. 20 . A suit would, therefore, be competent to challenge such an invalid assessment. That, in brief, is Mr. <NAME>'s argument on the construction of s. 20 .

In dealing with this question, it is necessary to remember that the normal rule prescribed by S. 9 of the Code of Civil Procedure is that the courts shall (subject to the provisions herein contained) have jurisdiction to try all suits of a civil nature excepting suits of which their cognizance is either expressly or impliedly barred. There is no doubt that a claim for the refund of sales tax allegation to have been paid by the appellants through mistake is a claim of a civil nature and normally it should be triable by the ordinary courts of competent jurisdiction as provided by S. 9 of the Code; but this section itself lays down that the jurisdiction of the civil courts to try suits of a civil nature can be excluded either expressly or impliedly; and so, the point raised for our decision in the present appeal is whether on a fair and reasonable construction of s. 20 , It can be said that the Jurisdiction of the civil court is barred either expressly or impliedly.

Section 20 protects "assessment made under the Act or the rules made thereunder" by appropriate authorities. There can be little doubt that the clause "an assessment made" cannot mean the assessment properly or correctly made. The said clause takes in all assessments made or purported to have been made under the Act. In its plaint, the appellant is undoubtedly calling into question the assessment order made against it, and such a challenge to the assessment order is plainly prohibited by s. 20 . An order of assessment, though erroneous, and though based on an incorrect finding of fact, is, nevertheless, an order of assessment within the meaning of s. 20 ; and s. 20 , in terms, provides that it will not be called in question in any civil court.

This question has been recently considered by this Court in <CITATION> (1). Dealing with s. 18A of the Madras General Sales Tax Act (Act 9 of 1939), which corresponds to s. 20 with which we are concerned in the present appeal, this Court observed that the expression "any assessment made under this Act" is wide enough to cover all assessments made by the appropriate authorities under this Act whether the said assessments are correct or not. It is the activity of the assessing officer acting as such officer which is intended to be protected and as soon as it is shown that exercising his jurisdiction and authority under this Act, an assessing officer has made an order of assessment, that clearly falls within the scope of s. 18A . It was also observed that whether or not an assessment has been made under this Act, will not depend on the correctness or accuracy of the order passed by the assessing authority. This position is not seriously disputed by Mr. <NAME> before us. He, however, contends that if the impugned order has been passed without jurisdiction, it cannot fall within the purview of s. 20 of the Act. In other words, the contention is that when the appropriate authority purported to levy the tax on the appellant in respect of the transactions in question, it was attempting to assess outside sale,; and since the said assessment contravened Art. 286 , it was invalid and the order was without jurisdiction and as such, a nullity. How can an order passed by the appropriate (1)  1 S.C .R. 752.

authority without jurisdiction claim the protection of s. 20 , asks Mr. <NAME>.

In deciding the validity of this contention, it is necessary to examine the scope of the jurisdiction conferred on the appropriate authorities by the relevant provisions of the Act. Jurisdiction is either territorial, or pecuniary, or in respect of the subject matter. There is no difficulty about the assessing authorities' territorial and pecuniary jurisdiction in the present case. What is the nature of the Jurisdiction conferred on the appropriate authority in respect of the subject-matter of sales tax ? Has the appropriate authority been given power to examine the nature of the transaction and decide whether it is liable to tax or not ? Or, can the appropriate authority proceed to exercise its power of imposing a tax only in cases where the transaction in question is assessable to such tax ? In other words, is the decision about the character of the transaction the decision on a collateral fact, the finding on which alone confers jurisdiction on the tribunal to levy the tax, or is it the decision on a question of fact which is left to be determined by the appropriate authority itself ? If the jurisdiction conferred on the appropriate authority falls under the first category, then its finding that a particular transaction is taxable under the relevant provi- sions of the Act, would be a finding on a collateral question of fact' and it may be permissible to a party aggrieved by the said finding to contend that the tax levied on the basis of an erroneous decision about the nature of the transaction is without jurisdiction. If, however, the appropriate authority has been given jurisdiction to determine the nature of the transaction and proceed to levy a tax in accordance with its decision on the first issue, then the decision on the first issue cannot be said to be a decision on a collateral issue, and even if the said issue is erroneously determined by the appropriate authority, the tax levied by it in accordance with its decision cannot be said to be without jurisdiction.

It is observed in Halsbury(1) : "The jurisdiction of an inferior tribunal may depend upon the fulfilment of some condition Precedent or upon the existence of some particular fact. Such a fact is collateral to the actual matter which the inferior tribunal has to try, and the determination whether it exists or not is logically and temporally prior to the determination of tile actual question which the inferior tribunal has to try. The inferior tribunal must itself decide as to the collateral fact : when, at the inception of an inquiry by a tribunal of limited jurisdiction, a challenge is made to its jurisdiction, the tribunal has to make up its mind whether it will (1) <ORG> Laws of England, 3rd Edn. Vol. 11, p. 59. 7 4 act or not, and for that purpose to arrive at some decision on whether it has jurisdiction or not. There may be tribunals which, by virtue of legislation constituting them, have the power to determine finally the preliminary facts on which the further exercise of their jurisdiction depends; but, subject to that, an inferior tribunal cannot, by a wrong decision with regard to a collateral fact, give itself a jurisdiction which it would not otherwise possess". It would be noticed that Mr. <NAME>'s argument that the impugned order of assessment is without jurisdiction and as such, does not fall within S. 20 , proceeds on the assumption that the finding of the appropriate authority that the transactions in question were taxable under the relevant provisions of the Act, is a finding on a fact which is collateral. The question is : is this assumption well- founded ? In our opinion, the answer to this question must be in the negative.

In this connection, the relevant scheme of the Act by which necessary powers have been conferred on the appropriate authorities, falls to be considered. Section 3(1) provides that for carrying out the purposes of this Act, <ORG> may appoint any person to be Commissioner of Sales Tax, and such other persons to assist him as <ORG> thinks fit. Section 3(2) then lays down that persons appointed under sub-s. (1) shall exercise such powers as may be conferred and perform such duties as may be imposed on them by or under this Act. Section 4 deals with the appointment of a <ORG> and provides for its constitution. Section 5 is the charging section. Section 8 requires the registration of dealers, the expression "dealer" having been defined by S. 2(c) . Section 10 imposes an obligation on the dealers to make returns. Section 11 deals with the assessment of tax, sub- s. (1) (a) provides that the amount of tax due from a registered dealer shall, in the case of first assessment, be assessed in respect of such period not exceeding twelve months as the Commissioner may determine. Sub-sections (2), (3) and (4) of S. 11 contain provisions in regard to the procedure which has to be followed by the Commissioner in determining the question about the liability of a dealer to pay assessment. The Commissioner has to take evidence, has to bear the dealer, can require further evidence to be led by the dealer on specific points and then reach his conclusion on the question as to whether the dealer is liable to be assessed, and if yes, to what extent ? In passing his order of assessment, the Commissioner acts on the evidence led before him. Sub-s. (5) empowers the Commissioner to levy assessment to the best of his judgment in cases failing under it. It also authorises him to impose a penalty as therein specified. Section 11A deals with turnover which has escaped assessment, and it confers authority on the Commissioner to pass an appropriate order of assessment in respect of the said category of cases. When the Commissioner makes an order of assessment in exercise of the powers conferred on him, a right is given to the assessee to prefer an appeal and a revision under sections 21 and 22 respectively.

It would thus be seen that the appropriate authorities have been given power in express terms to examine the returns submitted by the dealers and to deal with the questions as to whether the transactions entered into by the dealers are liable to be assessed under the relevant provisions of the Act or not. In our opinion, it is plain that the very object of constituting appropriate authorities under the Act is to create a hierarchy of special tribunals to deal with the problem of levying assessment of sales tax as contemplated by the Act. If we examine the relevant provisions which confer jurisdiction on the appropriate authorities to levy assessment on the dealers in respect of transactions to which the charging section applies, it is impossible to escape the conclusion that all questions pertaining to the liability of the dealers to pay assessment in respect of their transactions are expressly left to be decided by the appropriate authorities under the Act as matters falling within their jurisdiction. Whether or not a return is correct; whether or not transactions which are not mentioned in the return, but about which the appropriate authority has knowledge, fall within the mischief of the charging section; what is the true and real extent of the transactions which are assessable; all these and other allied questions have to be- determined by the appropriate authorities themselves; and so, we find it impossible to accept Mr. <NAME>'s argument that the finding of the appropriate authority that a particular transaction is taxable under the provisions of the Act', is a finding on a collateral fact which gives the appropriate authority jurisdiction to take a further step and make the actual order of assessment. The whole activity of assessment beginning with the filing of the return and ending with an order of assessment, falls within the jurisdiction of the appropriate authority and no part of it can be said to constitute a collateral activity not specifically and expressly included in the jurisdiction of the appropriate authority as such. We are, therefore, satisfied that Mr. <NAME> is not right when he contends that the finding of the appropriate authority that a particular transaction is taxable under the charging section of the Act, is a finding on a collateral fact and CI/65-6 7 6 it is only if the said finding is correct that the appropriate authority can validly exercise its jurisdiction to levy a sales tax in respect of the transactions in question. In fact, what we have said about the jurisdiction of the appropriate authorities exercising their powers under the Act, would be equally true about the appropriate authorities functioning either under Sale-,-tax Acts. or under the Income-tax Act .

This question was incidentally considered by a Special Bench of this Court in <CITATION> (1). In that case, the petitioner, <NAME>, challenged the validity of -the sales tax levied on her on the ground that the notification issued on December 14, 1957, had exempted 'bides', like those which the petitioner's firm produced, from payment of sales tax. According to the petitioner, the appropriate authority had plainly misconstrued the notification when it held that the bidis produced ,by the petitioner's firm were not entitled to claim the protection of the said notification. The petitioner had moved this Court under Art. 32 of the Constitution. Broadly stated, the majority decision was that though the notification may have been misconstrued by the appropriate authority when it rejected the petitioner's contention that the said bidis fell within the purview of the notification, and so, were exempt from payment of tax, no relief could be granted to the petitioner under Art. 32 on the sole ground that the impugned order of assessment was based on a misconstruction of the notification in question. The Act under which the notification was issued was valid; the validity of the ,notification itself was not impeached; and so, the narrow ground .which the Court had to consider was if the appropriate authority misconstrued the notification and imposed a tax on a commodity .Which in fact fell within its protection, could the validity of suck ,an order be impeached under Art. 32 of the Constitution on the ground that it contravened the fundamental right of the petitioner under Art. 19(1) (g) ? The two answers given in accordance with the majority opinion were against the petitioner; and so, the majority decision can be said to have rejected the petitioner's argument that a question of jurisdiction was involved in the misconstruction of the notification in question. It would thus appear that according to the majority view, the question about the tax- ability of a particular transaction falls within the jurisdiction of the appropriate authorities exercising their powers under the taxing Act, and their decision in. respect of it cannot be treated as a decision on a collateral fact the finding on which determines the jurisdiction of the said authorities.

(1) [1963]1 S.C.R. 778.

It is true that the separate concurring judgments delivered by learned Judges who spoke for the majority view indicate that their approach to the several problems posed by the two questions referred to the, <ORG>, was not uniform and they emphasised different aspects in somewhat different ways; but in regard to that aspect of the matter with which we are concerned in the present appeal there appears to be unanimity amongst them. Indeed, even the minority judgment which radically dissented from the majority view in regard to the scope and effect of the powers of this <ORG> tinder Art. 32 and the extent of the fundamental right conferred on the citizen to move this <ORG> by the said Article, does not appear to have differed from the majority view on this point.

Whilst we are referring to the decision of this Court in <NAME> case, we would hasten to add that we are not dealing with the scope and effect of our powers under Art. 32 , or with the powers of <ORG> under Art. 226. Our object in referring to the majority decision in <NAME> case is merely to show that the tenor of the opinion expressed by the learned Judges in the said case is in support of the view that a finding recorded by a taxing authority as to the taxability of any given transaction cannot be said to be a finding on a collateral fact, but is a finding on a fact the decision of which is entrusted to the jurisdiction of such authority.

Mr. <NAME> has no doubt referred us to the subsequent decision of this <ORG> in <CITATION> (2) in which it appears to have been held that the taxing officer cannot give himself jurisdiction to tax an interState sale by erroneously determining the character of the sale transaction. The decision on the question about the character of he sale transaction seems to have been treated as a decision on a Collateral fact. With respect, we may point out that the majority decision in <NAME> case on which this conclusion is founded does not support that view . We ought, however, to add that in the case of <ORG> (2 as in the earlier case of <NAME>), this <ORG> was dealing with a petition filed under Art. 32; and as we have already indicated, we are not called upon to consider the extent of our jurisdiction under Art. 32 when such questions are brought before us by citizens for relief on the ground that their fundamental rights have been contravened by assessment orders. At this stage, we are only dealing with the question as to whether Mr. <NAME> is right (1)  1 S.C. R. 778.

(2) [1963] 3.S.C.R. 792.

in contending that an erroneous conclusion of the appropriate authority on the question about the character of the sale transactions on which the appellant has been taxed, can be said to be without jurisdiction. In other words, if the appropriate authority, while exercising its jurisdiction and powers under the relevant provisions of the Act, holds erroneously that a transaction,. which is an outside sale, is not an outside sale and proceeds to levy sales-tax on it, can it be said that the decision of the appropriate authority is without jurisdiction? In our opinion, this question cannot be answered in favour of Mr. <NAME>'s contention. Whether or not such a conclusion can be challenged under Art. 226 or under Art. 32 of the Constitution, and if yes, under what circumstances, are matters with which we are not concerned in the present proceedings. For the purpose of construing s. 20 , we are not prepared to hold that an assessment based on an erroneous finding about the character of the transaction, is an assessment without jurisdiction and as such, is outside the purview of s. 20 of the- Act. We would like to repeat that it is only this narrow question we are considering in the present appeal.

Reverting then to s. 20 , it seems to us plain that the words used in this section are so wide that even erroneous orders of assessment made would be entitled to claim its protection against the institution of a civil suit. Several decisions have been cited before us where similar questions have been considered. We may usefully refer to some of them. In Secretariat- of <ORG>, represented by the <CITATION> (1) <ORG> had occasion to consider the effect of the provision contained in s. 188 of the Sea Customs Act (VIII of 1878). The said provision was that every. order passed in appeal under the said section shall, subject to the power of revision conferred by s. 19 1, be final. <ORG> had instituted a suit in which it sought to recover duty collected from it under protest on the around that it was illegally recovered. <ORG> had rejected the claim on the ground that the suit was barred under s. 188 . On appeal, <ORG> took a different view and held that the suit was competent. <ORG> reversed. the conclusion of <ORG> and confirmed the view, taken by the trial Judge. It would be noticed that the relevant words on which the controversy between the parties as to the competency of the suit in that case had to be resolved, were no as emphatic as they are in s. 20 , and yet, <ORG> upheld the plea that the suit was barred. It is true that in the course (1)67 I.A. 222.

of the discussion, <ORG> has observed that "it is settled law that the exclusion of the jurisdiction of the civil courts 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, the civil courts 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" (p. 236). In the present case, we are not called upon to consider the merits of these observations or their scope and effect.

<CITATION> in Council(1), section 67 of the Indian Income-Tax Act (XI of 1922) which barred a suit, fell to be considered. <ORG> held that the said provision barred a suit where the plaintiff sought to challenge an assessment order made by the appropriate tax authorities under the provisions of the said Act. In construing the effect of the words "no suit shall be brought in any civil court to set aside or modify any assessment made under this Act", <ORG> thought it necessary to enquire whether the Act contained machinery which enabled an assessee effectively to raise in the courts the question whether a particular provision of the Income Tax Act bearing on the assessment made is or is not ultra vires. "The presence of such machinery", observed <ORG>, "though by no means conclusive, marches with a construction of the section which denies an alternative jurisdiction to enquire into the same subject- matter. The absence of such machinery would greatly assist the appellant on the question of construction and, indeed, it may be added that, if there were no such machinery, and if the section affected to preclude <ORG> in its ordinary civil jurisdiction from considering a point of ultra vires, there would be a serious question whether the opening part of the section, so far as it debarred the question of ultra vires being debated, fell within the competence of the legislature". In other words, these observations indicate that <ORG> took the view that where an appropriate authority is exercising its jurisdiction to levy a tax in respect of any transaction, it would be competent to such an authority to consider the validity of the taxing provisions themselves. We do not think it is necessary for us to examine this aspect of the matter in the present appeal, because the validity of the charging section is not impeached in the present proceed- ings. It is true that Mr. <NAME> has challenged the validity of S. 20 , but the said section has no bearing on the assessment made, and (1)74 LA.. 50, at pp. 62-63.

so, that plea has no relevance to the point which <ORG> was considering in the observation. to which we have just referred.

On the question of construction, Mr. <NAME> has relied on two decisions of this <ORG> to which it is necessary to refer before we part with this topic. <CITATION> (1), it was held by this <ORG> that the finality attached to orders passed in appeal by s. II (4) of the Madras General Sales Tax Act (IX of 1939) was a finality for the purposes of the said Act and 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. We ought to add that this decision was based on the fact that the said Act at the relevant time did not contain s. 18A which came into force on May 15, 1951; ind it was s. 18A which was construed by this <ORG> in Firm and <NAME> Mr. <NAME> has also referred to the majority decision in the case of <CITATION> (3). In that case, according to the majority decision, s. 84 (3) of the Central Provinces Municipalities Act, 1922 which deals with "bar of other proceedings did not make incompetent the suit with which the <ORG> was dealing. The said section provides that :

"No objection shall be taken to any valuation, assessment, levy, nor shall the liability of any person to be assessed or taxed be questioned, in any other manner or by any other authority than is provided in this Act".

According to the majority view, the bar created by this provision did not amount to the exclusion of the jurisdiction of the civil court to entertain a claim for refund of the tax alleged to be illegally recovered, because there were no words in the said provision which could be construed as excluding civil court's jurisdiction either expressly or impliedly. The minority view, however, held that a suit for refund was barred.

We do not think Mr. <NAME> can successfully advance his case before us by relying on these two decisions. After-all, as <ORG> observed in the case of <ORG>), the determination of the question as to whether S. 20 bars the present suit, must rest on the terms of s. 20 themselves, because that is the provision (1) 15 S.T.C. 144.

(3) C. A. No. 600 of 1964. Decided March 26, 1965 (2) [1964] 1 S.C.R. 752.

(4) 67 I. A. 222.

under consideration "and decisions on other statutory provisions are not of material assistance, except in so far as general principles of construction are laid down" (p.

237). Besides, in regard to these two decisions, we may, with respect, point out that they do not purport to lay down a general rule that the jurisdiction of a civil court cannot be excluded unless it is specifically provided that a suit in a civil court would not lie. In fact, as the decision of <ORG> in the case of <NAME> & Co.(1 shows, the jurisdiction of a civil court can be excluded even without such an express provision. In every case, the question about the exclusion of the jurisdiction of civil courts either expressly or by necessary implication must be considered in the light of the words used in the statutory provision on which the plea is rested, the scheme of the relevant provisions, their object and their purpose. We would also like to make it clear that we do not think it is necessary in the present case to consider whether the majority opinion in the case of <ORG>) was justified in casting a doubt on certain observations made by <ORG> in <ORG>) case, or on the validity or the propriety of the conclusion in respect of the effect of s. 67 of the Income-tax Act. Mr. <NAME> has also invited our attention to the decision of <ORG> in <ORG> v. <ORG>). In that case, <ORG> repelled the preliminary objection raised by the respondents that the court had no jurisdiction to grant the declarations asked for, since by the combined effect of sections 15 and 17 of the Town and Country Planning Act, 1947, the decision of the Minister on an application to determine whether permission was required was made final and the only method of determining such a question was that provided by S. 17(1) ; and that the wide discretion conferred by s. 14 on the Minister to impose conditions disentitled the company from coming to the court for a declaration that the conditions were invalid. In coming to the conclusion that the jurisdiction of the civil court was not excluded, <ORG>,, noticed that there was nothing in s. 17 or in the Act which excluded the jurisdiction of the court to grant declarations; s. 17 merely provided an alternative method of having the question determined by the Minister. "It is a principle no,, by any means to be whittled down", said Viscount <NAME>, "that the subject's recourse to Her Majesty's courts for the determination of his rights is not to be excluded except by clear words. That is, as <NAME>

(1) 67 I.A. 222.

(2) C.A. No. 600 of 1964. Decided March 26,1965. (3) 74 I.A. 50.

(4) [1960] A.C. 260 at p. 286.

called it in <NAME> v. <NAME> and <ORG>), a 'fundamental rule' from which I would not for my part sanction any departure". Approaching the task of construing s. 17 from this point of view, his Lordship came to the conclusion that there was nothing in s. 17 which excluded the jurisdiction of the civil court to entertain the claim in question. We do not see how this decision can afford any assistance to the appellant. There is one more aspect of the matter which must be con- sidered before we finally determine the question as to whether s. 20 excludes the jurisdiction of the civil court in entertaining the present suit. Whenever it is urged before a civil court that its jurisdiction is excluded either expressly or by necessary implication to entertain claims of a civil nature, the <ORG> naturally feels inclined to consider whether the remedy afforded by an alternative provision prescribed by a special statute is sufficient or adequate. 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 considerations would be very important, and in conceivable circumstances, might 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 tribunal-, so constituted, it becomes pertinent to enquire whether remedies normally associated with actions in civil courts are prescribed by the said statute or not. The relevance of this enquiry was accepted by <ORG> in dealing with s. 67 of the Income Tax Act in <ORG>'s(2) case and that is the test which is usually applied by all civil courts.

In the present case, the appellant wants relief of refund of tax which is alleged to have been illegally recovered from it by the respondent, and the ground on which the said relief is claimed is that at the time when the tax was recovered, the appellant was under a mistake of fact and law. According to the appellant, even the respondent might have been laboring under the same mistake of fact, and law, because the true constitutional and legal position in regard to the jurisdiction and authority of different States to (1) [1957] 2 Q.B. 136, 148.

(2) 74 I.A. 50.

recover sales tax in respect of outside sales was not correctly appreciated until this Court pronounced its decision in <ORG>) case. That being so, can it be said that the Act provides an appropriate remedy for recovering a tax alleged to have been illegally levied and collected, where the party asking- for the said relief pleads a mistake of fact and law? It would be noticed that this inquiry may have some relevance in construing the terms of S. 20 , and it would be both relevant and material in considering the question of the constitutionality of s. 20 . That is the two-fold purpose which such an inquiry would serve in the present case. If we are satisfied that the Act provides for no remedy to make a claim for the recovery of illegally collected tax and yet s. 20 prohibits such a claim being made before an ordinary civil court, the Court may hesitate to construe S. 20 as creating an absolute bar, or if such a construction is not reasonably possible, the Court may seriously examine the question about the constitutionality of such express exclusion of the civil court's jurisdiction having regard to the provisions of Arts. 19 and 31 of the Constitution. It is with this two-fold object that this aspect of the matter must now be examined.

Before proceeding to examine this matter, we ought to refer to the decision of this Court in the <CITATION> . ( 2 ) In that case, this Court has held that the term "mistake" in s. 72 of the Indian Contract Act comprises within its scope a mistake of law as well as a mistake of fact and that, tinder that section a party is entitled to recover money paid by mistake or under coercion, and if it is established that the payment, even though it be of a tax, has been made by the party labouring under a mistake of law, the Party receiving the money is bound to repay or return it though it might have been paid voluntarily, subject, however, to questions of estopped, waiver, limitation or the like. Basin- himself on this decision, Mr. <NAME> contends that since the Act does not provide for adequate remedy to recover illegally collected tax from the respondent, we should either put a narrow construction on s. 20 so as to permit institution of a suit like the present, or, in the alternative, should strike it down as constitutionally invalid. If a citizen is deprived of his property illegally by recovering from him unauthorisedly an amount of tax where no such tax is recoverable from him, he ought to have a proper and appropriate remedy to ventilate his grievance against the <ORG>. Normally, such a remedy (1)  2 S.C.R. 603.

(2) [1959] S.C.R. 1350.

would be in the form of a suit brought before an ordinary civil court; it may even be a proceeding before a specially appointed tribunal tinder the provisions of a tax statute; and it can also be an appropriate proceeding either under Art. 226 , or under Art. 32 of the Constitution. In support of this contention, Mr. <NAME> has referred to the decision of <ORG> in Commissioner for Motor Transport v. <ORG> Ltd. State of New South wales and Other v. <ORG>). In that case, s. 3 of the State Transport Co-ordination (Barring of Claim and Remedies) Act, 1954 had provided, inter- alia, that every cause of action against Her Majesty or the State of New South Wales for the recovery of any sums collected in relation to the operation of any public motor vehicle in the course of or for the purposes of inter-State trade before, the commencement of this Act which were collected pursuant to the relevant provisions of the principal Act, shall be extinguished. When a claim made for the refund of tax illegally recovered was resisted on the ground that it was incompetent in view of s. 3 , it was held that the denial of the right to recover money paid in satisfaction of chrges which were -illegal by virtue of s. 92 of the Commonwealth of Australia Constitution offended equally against s. 92 . In other words, where the impugned statutory provision purported to extinguish absolutely a cause of action, it was struck down as unconstitutional. Let us, therefore, examine the question as to whether the Act with which we are concerned in the present appeal, provides for. a remedy to claim a refund of tax alleagd to have been illegally recovered. Section 13 of the Act expressly provide-, for refunds. It lays down that the Commissioner shall, in the prescribed manner, refund to a registered dealer applying in this behalf any amount of tax paid by such dealer in excess of the amount due from him under this Act. The proviso to this section prescribe period of limitation of twenty-four months from the date on which the order of assessment was passed or within twelve months of the final order passed on appeal, revision, or reference in respect of the order of assessment, whichever period is later. Then, we have s. 21 which provides for the remedy of an appeal; and S. 22 which provides for a revisional remedy. It is significant that though s. 21(1) prescribes a period of sixty days for appeal and s. 22 prescribes a period of four months for revision, under s. 22B the prescribed authority is given power to extend the period of limitation if it is satisfied that the party apply-

(1)[1956] 3 All. E.R, 106, ing for such extension had sufficient cause for not preferring the appeal or making the application within such period. Section, 23A provides for rectification of mistake. It is thus clear that the appellant could have either appealed or applied for revision and prayed for condonation of delay on the ground that the, mistake which was responsible for the recovery of the tax illegally levied, was discovered on the 6th September, 1955, becausesuch a plea would have been perfectly competent tinder S. 22B . In other words, if the appellant had pursued a remedy available, to it under s. 21 or s. 22 read with s. 22B , its case would have been considered by the appropriate authority and the validity of the grounds set up by it for the refund of the tax in question would have been legally examined. Therefore, it cannot be said that even for the claim which the appellant seeks to make in the present suit, there is no alternative remedy prescribed by the Act. This conclusion serves a double purpose. It makes it easier to construe the wide words used in s. 20 and hold that they constitute an absolute bar against the institution of the present suit, and it also helps the respondent to repel the plea of the appellant that S. 20 if it is so widely construed, is unconstitutional. Our conclusion, therefore, is that s. 20 should be construed in the same manner in which s. 18A of the Madras General Sales-Tax Act was construed by this Court in <ORG>) and that even on this wide construction, the said section is constitutionally valid.

This conclusion, however, does not finally dispose of the appeal. Though the appellant's suit may be incompetent in so far as the appellant seeks for a decree for refund, it still remains to be considered whether its suit can be said to be incompetent in so far as it seeks to challenge the validity of s. 20 itself. It would be recalled that the alternative claim made by the appellant in its plaint was that s. 20 on which a plea of bar is raised by the respondent, is invalid. <ORG> has not considered this aspect of the matter; but since the appellant has been allowed to raise the point about the validity of section 20 , we must deal with it.

This point presents no difficulty whatever. The bar created by s. 20 cannot obviously be pleaded where the validity of s. 20 itself is challenged. That can of course be done by a separate suit. In terms, S. 20 is confined to cages where the validity of assessment orders made tinder the Act is challenged. 'Me said provision cannot take in a challenge to the validity of s. 20 itself, (1) 1 S.C.R. 752.

and so, we must hold that technically, the appellant's suit is competent in so far as it seeks to challenge the validity of s. 20 . This finding, however, is of no material assistance to the appellant, because even after it succeeds on this point, it has still to face the plea of the respondent that on the merits, the suit is barred; and on that plea, the appellant must fail, because s. 20 is a bar to the appellant's claim that the amount in question which is alleged to have been illegally recovered from it should be refunded to it. That is a matter which falls directly within the mischief of s, 20.

What then is the ultimate position in this case? The Act Linder which tax was recovered from the appellant is valid and so is the charging section valid; the appropriate authorities dealt -with the matter in regard to the taxability of the impugned transactions in accordance with the provisions of the Act and in consequence, tax in question was recovered on the basis that the said transactions were taxable under the Act. The appellant contends that the transactions were outside sales and they did not and could not fall under the charging sect-ion because of Art. 286 , and it argues that the tax was levied because both the appellant and the appropriate authorities committed a mistake of fact as well as law in dealing with the question. Assuming that such a mistake was committed, the conclusion that the transactions in question fell within the purview of the charging section cannot be said to be without jurisdiction or a nullity and the assessment based even on such an erroneous conclusion would claim the protection of s. 20 . If, after discovering the mistake the appellant had moved the appropriate authorities under the relevant provisions of the Act, its claim for refund would have been considered on the merits. Having failed to take recourse to the said remedy, it may have been open to the appellant to move <ORG> under Art. 226. Whether or not in such a case, the jurisdiction of <ORG> could have been effectively invoked, is a matter on which we propose to express no opinion. As we have pointed out during the course of this judgment, we are not dealing with the scope and effect of <ORG>s jurisdiction under Art. 226 as well as the scope and effect of this <ORG>'s jurisdiction under Art. 32 viv-a-vis such claims for refund of tax alleged to have been illegally recovered. In the result, the appeal fails and is dismissed with costs. Appeal dismissed.


JUDGMENT

1. The main questions to be determined in this appeal are--(1) whether the first respondent (defendant) hereinafter referred to as the responded is the rightful trustee of the temples of Malleeswara and Kesavaperumal situated in Black Town; (2) if so, whether the suit, in so far as it relates to the charge of neglect of duty alleged against him, is unsustainable because no leave was obtained under Section 18 of the Religious Endowments Act, XX of 1863; and (3) whether the respondent has been guilty of neglect of duty calling for notice at the hands of the <ORG>.

2. Now, as regards the first question the facts bearing thereon are beyond dispute. Prior to the year 1777 a temple, dedicated to Malleeswara and Kesavaperumal, existed at the site on which the old light-house stands. But that site having been taken up by <ORG> on payment of compensation, the temple was pulled down. <NAME> (senior), who was at that time the manager of the temple, caused the present temple to be constructed with money received by him from <ORG> as compensation and with funds which he collected by way of subscriptions. <NAME> held the office of trustee of the present temple till his death in 1795. He was succeeded by his son <NAME> who held the office till his death in 1816. His son <NAME> (junior) succeeded him, held the management up to the year 1840 and was succeeded by his younger brother <NAME> who died in 1847. He left a will whereby he appointed his own sister <NAME> and her husband <NAME> as his succeeding trustees, and authorized them to appoint their own successors, and thus diverted the devolution of the office from the family of <NAME> (senior) into the hands of persona who had no right thereto. <NAME> died shortly afterwards and <NAME> continued to hold the office of trustee. till 1872. By her will she appointed her sister's son <NAME> to the trusteeship. He held the office for twenty years and by his will appointed the respondent, one of <NAME>'s (senior) great-grandsons, as his successor.

3. The first contention on behalf of the respondent was that, granting for argument there was a vacancy on <NAME>'s death, as urged for the appellants (plaintiffs Nos. 1 to 4 and Nos. 6 to 10) the right of management reverted to the heirs of <NAME> (senior) as he was the founder. We are, however, unable to agree with the suggestion that <NAME> was the founder. If a temple gets into ruins and a person, as a matter of mere benefaction, erects fresh buildings and dedicates them to the same sort of worship as had been carried on in the old temple, such person may properly be treated as the founder of the new temple, even though, in constructing it, he used materials of the former temple or other property belonging thereto. The circumstances of the present case are, however, very different. When <NAME> received the money paid as compensation by <ORG> he received it as trustee, and in applying that money towards the construction of the present temple he did nothing more than what he was called upon to do as trustee. The circumstance that he had taken the trouble to raise subscriptions to supplement the trust funds in his hands and that such subscriptions amounted to much more than the original trust 'funds would not make either him or the subscribers founders, The reason able view would be to treat the amount subscribed as accretions to the existing trust funds and as something contributed for the better carrying out of the purposes of the original foundation (compare the observations of the Earl of Selborne, L.C , in the <ORG> case, In the matter of the Endowed Schools Act, 1869 L.R. 10 App. Cas., 304 at p. 308.) As the very first step in the argument addressed to us with reference to the contention under consideration fails, it is not necessary to discuss the contention further.

4. It was next urged on behalf of the respondent that his appointment by <NAME> should be upheld on the ground that it was a transfer of the office to a person who, being a member of the family of <NAME> (senior) and also in the line of heirs, would have been entitled to succeed to the office of trustee had the right of the family not been extinguished by lapse of time. No doubt in the absence of custom entitling a trustee to transfer his office, he is not at liberty to do so. Having regard, however, to the ground of the decision of <ORG> in <NAME> v. Ravi Vurmah Mutha L.R. 4 I.A. 76 : I.L.R. 1 Mad. 235 it would seem, as urged by Sir <NAME>, not unreasonable to hold that where a person, who had no right to the office of a trustee according to the rule of devolution established by the founder, acquires a title to the office by prescription, but restores it to one, who, except for the transferor's prescriptive title, could have taken the office according to the rules laid down by the founder, such transfer should be treated as an exception to the general doctrine that a trusteeship is not assignable, subject, of course, to the condition that no corrupt inducement has entered into the transaction and the interests of the trusts are not likely to be prejudicially affected. For such a transfer would put an end to the continuance of a management inconsistent with the founder's intention and once more let in the class of persons by whom the founder contemplated the management should be carried on. We consider it, however, preferable to rest our decision in favour of the respondent with reference to this part of the case on the other ground which was suggested on his behalf. That ground is that the respondent is a rightful trustee having been appointed by one who had acquired a valid title to the trusteeship with power to appoint a successor. Now the appellants do not dispute that <NAME> acquired a valid title to the trusteeship by prescription. But what sort of trusteeship did she acquire? It was not, as contended for the appellants, a hereditary trusteeship without power to appoint a successor. On the contrary <NAME> took possession of the office under a will which contained a provision for the appointment of a successor to herself and acting under that provision, she appointed <NAME> giving him at the same time power to appoint his own successor. <NAME> accordingly appointed a successor in the person of the respondent. The effect of such acts of <NAME> and <NAME> on their possession must be held to be that they were claiming not a trusteeship descendible to their heirs, but one with power to appoint a successor. When they exercised their powers of appointment they exorcised them as an incident to their office of trustee. And such an estate being well known to and recognized by law, there is no reason for holding that such a trusteeship should not be prescribed for, or that <NAME> and <NAME> did not prescribe for it. <NAME> v. <NAME> L.R. 27 I.A. 86 : I.L.R. 24 Bom. 556 cited for the respondent is a decision somewhat in point. There <ORG> held that a person who acquired a right to a watan by adverse possession, took the property attached thereto subject to the restriction incident to the tenure that an alienation of such property by the watandar had no effect beyond his life. No doubt power to alienate one's property is not exactly of the same nature as the power to appoint a successor to the office, for the former is a component part or incident of ownership. But where in such an estate as that of a trustee the devolution is by appointment, the power to appoint a successor is as much an incident of the trusteeship as the right to alienate is an incident of ownership. An instance more closely analogous to the present case may be easily suggested. Suppose a person holds for the statutory period possession of property under a mortgage, purporting to confer on the mortgagee a power to sell, granted by a person who had no title to the property but who, under the law was competent to make a mortgage with such power. It must be held that such possession confers on the possessor the right of a mortgagee with power to sell and not minus such power. We hold, therefore, that the respondent succeeded to the office rightfully by virtue of the appointment under <NAME>'s will.

5. We now pass to the consideration of the question whether the absence of leave under Section 18 of the Religious Endowments Act, XX of 1863, precludes the appellants from maintaining so much of the suit as relates to the alleged charges of neglect of duty on the part of the respondent. This <ORG>, as the successor to the late Supreme <ORG>, possesses a jurisdiction similar to, and corresponding to, that exercised by the <ORG> of Chancery in England over charities Within the original jurisdiction of this <ORG> parsons interested in charities have all along been allowed, as relators, to take legal proceedings in reference to the due administration of charities. According to the analogy of the procedure applicable to similar cases in England the Advocate-General should be a party to proceedings like the present. But a different practice has long prevailed--see <CITATION> . 3 Calc. 563, <NAME> v. Haribhum Nursey I.L.R. 8 Bom. 432 at p. 452, and <NAME> v. Raghava Chariar I.L.R. 23 Mad. 28.

6. Following the view taken by <NAME>, C.J., and <NAME>, J., in <CITATION> . 3 Calc. 563 already cited, we hold that Act XX of 1863 was not intended to apply to a suit such as this brought under the ordinary original jurisdiction of this <ORG> inherited from the Supreme <ORG> The absence of leave, relied on, is therefore immaterial, and the portion of the suit which relates to the charges of neglect of duty is sustainable notwithstanding that no leave was obtained under Section 18 of the Religious Endowments Act.

7. The third and last question calls for but a few words. We agree with the learned Judge that the appellants have failed be make out any serious neglect of duty on the part of the respondent. In our opinion the evidence very clearly shows that shortly after the respondent's succession in 1892 certain unfounded objections to his right to act as trustee word started by persons unfriendly to him, and that his principal subordinates who had to attend to the work of collecting the rents due to the <ORG> were induced to act hostilely to him, and to thwart his management; by inciting tenants to withhold their rents. The delay and the paucity in the collection of the rents spoken to by the appellant's witnesses were manifestly due to this improper opposition on the part of the respondent's subordinates, some of whom are appellants in this very case. Nor is there any evidence worth the name to show that any loss has resulted to the <ORG> by the failure of the respondent to take prompts action in the matter of the collection of rents.

8. The appeal fails and must be dismissed with costs, subject, however, to two minor modifications in the provisions of the decree: (i) Substitute for the direction about exhibiting books and accounts for the examination of worshippers the following: -The <ORG> shall during the month of August every year allow worshippers of the temple to inspect the temple accounts between the hours of 3 and 5 p.m. every day, and for that purpose shall cause the books and accounts to be kept in a conspicuous and convenient place in the temple in charge of one of his subordinates. Among the books to be so kept for the examination by worshippers there shall be a register showing the various immoveable properties belonging to the institution, as also all the valuable moveable properties, inclusive of jewels. The <ORG> should have the register duly revised annually, (ii) Insert the following direction as to investment of surplus funds: The <ORG> should invest the surplus funds of the temple in any of the modes enumerated in Section 20 of the Indian Trusts Act when such surplus exceeds the sum of Rs. 3,000.

9. Either party may, if necessity arises, apply for further orders as to the manner, in which the <ORG> should carry out the directions contained in the decree herein.

10. The memorandum of objections was not pressed, and is dismissed with costs.