PETITIONER:
BATA SHOE CO.
Vs.
RESPONDENT:
CITY OF JABALPUR CORPORATION
DATE OF JUDGMENT11/03/1977
BENCH:
CHANDRACHUD, Y.V.
SHINGAL, P.N.
CITATION:
1977 AIR 955 1977 SCR (3) 182
1977 SCC (2) 472
ACT
Central Provinces & Berar Municipalities Act,
1922 s. 84(3)--Scope of--Act self-contained Code-"Objec-
tions regarding assessment, levy etc. of octroi duty
shall not be taken in any manner or by any other authority
than is provided in the Act"--Suit in a Civil Court--If
lies.
HEADNOTE
The Central Provinces and Berar Municipalities .Act,
1922, empowers a municipality to assess and recover octroi
duty on goods brought within the municipal limits for sale.
consumption and use therein. Under the Act an appeal
against assessment or levy or refusal to refund any tax lies
to a designated official. A person aggrieved by the decision
of the appellate authority has a right to apply to the State
Government for revision. The Act also provides for refer-
ence to the High Court on questions like liability to as-
sessment or principles of assessment and so on. Section 84
(3) lays down that "no objection shall be taken to any
valuation. assessment or levy nor shall the liability of
any person to be taxed or assessed be questioned in any
other manner or by any other authority than is provided in
the Act." Rule 14(b) of the Rules framed under the Act
provides that any person importing or bringing any dutiable
articles within the octroi limits of a municipality without
paying the duty or without giving a declaration to the
octroi Moharrir, shall be liable to pay double the duty and
shall in addition be liable to be prosecuted for evasion of
duty.
The plaintiffs imported within the municipal limits
for sale in their retail shops articles manufactured by them
in their factories situated at different places in the
country. They paid the octroi levied by the municipality
at a certain rate. But Sometime later the municipality
reopened and revised the assessment and charged octroi at a
different rate. It also levied double the duty by way of
penalty on the ground that the plaintiffs had intentionally
evaded payment of duty on the goods. The appellate author-
ity modified the decision of the municipality but upheld the
assessment of double duty. The plaintiffs’ revision appli-
cation was rejected by the Board of Revenue.
The plaintiffs paid the duty and penalty under protest
and filed a suit for recovery of the amount on the ground
that the municipality was not entitled to recover the amount
of octroi duty and penalty. Overruling the defendant munic-
ipality’s objection as regards the civil court’s jurisdic-
tion to entertain the suit the trial court decreed the suit.
On appeal, the High Court held that the defendants were
entitled to revise and reopen the assessment and that the
reassessment of duty fixed in appeal by the appellate au-
thority could not be questioned by the plaintiffs in a civil
court.
In appeal it was contended in this Court by the plain-
tiffs that s. 84(3) may bar a suit to challenge an act which
was within the purview of the Act, but it could not bar a
suit to challenge an act which was outside the Act or the
Rules and since in this case the defendant had no power to
revise or reopen the assessment. its action was wholly
lacking in jurisdiction and so the suit was competent.
Dismissing the appeal,
HELD: Since s. 84(3) expressly prohibits a challenge
to valuation, assessment or levy "in any other
manner ............ than is provided in this Act" and
since the Act has devised its own special machinery for
inquiring into and adjudicating upon such challenges, the
common remedy .of a suit stands necessarily cxcluded and
cannot be availed of by a person aggrieved by an order
183
assessment to octroi duty. Similarly the sub-section
excludes expressly the power of "any other authority than is
provided in this Act" to entertain an objection to any
valuation, assessment or levy of octroi. This art of the
provision-is in the nature of ouster of jurisdiction of
civil courts, at least by necessary implication, to enter-
tain an objection to any valuation, assessment or levy..[187
A]
1. Two of the propositions bearing on the construction
of statutes which expressly or by necessary implication bar
the jurisdiction of civil courts stated in Dhulabhai & Ors.
v. The State of Madhya Pradesh [1968] 3 SCR 662 and which
are relevant for the purposes of this case are: (i)
where the statute gives finality to the orders of special
tribunals the civil court’s jurisdiction must be held to be
excluded if there is an adequate remedy to do what the civil
courts would normally do in a suit. Such provision, howev-
er, does not exclude 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, (ii) questions of the
correctness of the assessment, apart from its constitution-
ality, 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 par-
ticular Act must be examined because it is a relevant en-
quiry. [189 D-F]
(a) In the instant case, the various provisions of the Act
show in the first place that the municipality possesses the
right and the power to assess and recover octroi duty and
double duty on goods brought within the municipal limits for
sale, consumption or use therein. The circumstance that the
municility might have acted in excess of or irregularly in
the exercise of that power could not support the conclusion
that the assessment or recovery of the tax was without
jurisdiction. If the appropriate authority, while exercis-
ing its jurisdiction and powers under the relevant provi-
sions of the. Act, holds erroneously that an assessment
already made can be corrected or that an ,assessee is liable
to, pay double duty, it cannot be said that the decision of
the authority is without jurisdiction. [192 E-F]
(b) Both the Act and the Rules contain provisions ena-
bling the aggrieved party to challenge an illegal assessment
or levy of double duty. By reason of the existence and
availability of those special remedies, the ordinary remedy
by way of a suit would be excluded on a true interpretation
of s. 84(3) of the Act. [193 H]
(c) Levy of double duty, though not justified by the
terms of r. 14(b) goes to the correctness of the levy and
not to the jurisdiction of the assessing authority. Assuming
that neither of the two eventualities mentioned in r. 14(b)
occurred and, therefore, there was no justification for
imposing double duty, the error could be corrected only in
the manner provided in the Act and by the authority pre-
scribed therein. The remedy by way of a suit is barred.
[193 A-B]
(d) The suit for refund of double duty or revised duty
is not maintainable because in the first place the assess-
ment was made by the authority duly empowered to do so and
secondly the authority was acting under the Act while revis-
ing the assessment and imposing double duty. It had the
power to assess and levy double duty. If it exceeded that
power it acted wrongly, but not without jurisdiction. [193
C-D]
(e) It is not correct to say that the Act protects
correct assessments only and that every incorrect or wrong
order of assessment can be challenged by a suit though the
statute gives it finality and provides full and effective
remedies to challenge it. Except in matters of constitu-
tionality and the like a selfcontained Code must have
priority over the common means of vindicating rights. If
the appropriate authority, while exercising its jurisdic-
tion anti power under the relevant provisions of the Act.
comes to an erroneous conclusion it cannot be said that the
decision is without jurisdiction. [193 F.-G]
Dhulabhai and Others v. The State of Madhya Pradesh [1968] 3
SCR 662 Kamla Mills Ltd. v. State of Bombay [1966] 1 SCR 64
applied.
13--240SCI/77
184
Bharat Kala Bhandar Ltd. v. Municipal Committee, Dha-
mangaon, [1965] 3 SCR 499, B.M. Lahani v. Malkapur Munici-
pality, AIR 1970 S.C. 1002 and Firm Seth Radka Kishan v.
Administrator, Municipal Committee, Ludhiana [19541 2 SCR
273, 284 distinguished.
Wolverhamton New Waterworks Company v. Hawkerford [1859]
6 C.B. (N.S.) 336. Secretary of State v. Mask & Company, 67
I.R. 222, Naville v. London "Express" Newspaper, Limited,
[1919] A.C. 368, Bengal Immunity Co. Ltd. v. State of
Bihar. [1955] 2 SCR 603 and Firm and Illuri Subbaya Chetty
& Sons. v. The State of Andhra Pradesh, [1964] 1 SCR 752
referred to.
(f) The instant case does not fall within the proposi-
tions in Dhulabhai’s case because s. 84(3) not merely gives
finality to the orders passed by the special tribunal but
expressly provides that such orders shall not be questioned
in any other manner or by any other authority than is pro-
vided in the Act. [194 B]
(g) In the instant case, the plaintiffs availed them-
selves of the remedies provided under the Act and. succeeded
to art extent. Having exhausted their remedies under the
Act and having been benefited by the appellate decision,
they turned to the civil court to claim refund. This is
impermissible under s. 84(3). [194 F-G]
JUDGMENT
CIVIL APPELLATE JURISDICTION:CIVIL Appeal Nos. 1923-1924
of 1972.
(From the Judgment and Decree dated 25-10-1957 of the
Madhya Pradesh High Court in First Appeal No. 138/52)
A.K. Sen, B.P. Maheshwari and Suresh Sethi, for the
appellant in C.A. No. 1923/72 and respondent in CA No.
1924/72.
D.N. Mukherjee, for the respondent in CA No. 1923/72 and
for appellant in CA 1924/72.
CHANDRACHUD, J.--These are cross appeals arising out of
a judgment rendered by the Madhya Pradesh High Court in
First Appeal No. 138 of 1952 modifying the decree passed by
the First Additional District Judge, Jabalpur in Civil Suit
No. 6-B of 1949. It would be convenient to refer to the
parties as plaintiffs and defendants, plaintiffs being the
Bata Shoe Co. Ltd. and the defendants being the Corporation
for the City of Jabalpur.
Plaintiffs are a limited company having their registered
office at Calcutta. At the relevant time they had their
factories at Batanagar in West Bengal, Batapur in West
Punjab, Palsia-Digha in Bihar and Faridabad near Delhi. The
sale’s organisation of the plaintiffs is situated at Cal-
cutta, and that organisation sells manufactured articles
through the Company’s retail shops situated in different
parts of India and Pakistan. Three such retail shops were
situated at Jabalpur.
In respect of the articles which were imported by the
retail shops at Jabalpur within the limits of the then
Jabalpur Municipal Committee between April 1, 1943 and March
31, 1945 the plaintiffs had paid to the Municipal Committee
a sum of Rs. 16,528 odd as control duty. This duty was
assessed by the Muncipal Committee on an amount which was
40% less than the retail price of the goods which were
brought within the municipal limits. In the year 194.6-47
the Municipal Committee decided to reopen and revise. the
assessment by
185
charging the octroi duty on an amount which was only 6-1/4%
less than the retail price of the goods. The Municipal
Committee further decided to levy double the duty by way of
penalty for the aforesaid period on the ground that the
plaintiffs bad intentionally evaded the payment of the duty
payable on the goods. Plaintiffs preferred an appeal
against the decision of the Municipal Committee to the Sub-
Divisional Officer, Jabalpur who by an order dated July 14,
1948 modified the decision of the Municipal Committee by
permitting them to charge the octroi duty on an amount which
was less by 12-1\2 % than the retail price of the goods.
The Sub-Divisional Officer however upheld the assessment of
double duty. The revision application preferred by the
plaintiffs to the Board of Revenue was rejected on October
4, 1948 on the ground that it was not maintainable.
In conformity with the appellate order, but under
protest, plaintiffs paid to the Municipal Committee a sum of
Rs. 21,071-1-3 on August 6, 1948. Defendants demanded a
further sum of Rs, 10,604-2-6 alleging that they had over-
looked asking for it through mistake. Plaintiffs paid that
amount too on September 22, 1948 under protest. On June 20,
1949 they filed a suit against the Municipal Committee for
recovery of the total amount of Rs. 31,675-3-9 with interest
at 6% per annum on the ground that the defendants were not
entitled to recover the amount by way of octroi duty and
penalty. During the pendency of the suit the Municipal
Committee was succeeded by the Corporation for the City of
Jabalpur who were substituted as defendants to the suit.
The Trial Court decreed the suit to the extent of
Rs. 32,629-7-0 calculating the interest at 4%, holding that
the defendants could not charge octroi duty on an amount
arrived at by anything less than 40% from the retail sale
price, that the recovery of octroi duty by deducting a sum
of 12-1/2% only from the retail price was illegal and that
the defendants were not justified in recovering double duty
by way of penalty since the plaintiffs had not intentional-
ly evaded the payment of proper duty. Defendants had raised
contentions both as regards the jurisdiction of the Civil
Court to entertain the suit and as regards limitation but
the Trial Court rejected those contentions and held that it
had jurisdiction to entertain the Suit and that it was not
barred by limitation.
In appeal the High Court held that the defendants
were entitled to revise and reopen the assessment and that
the re-assessment. of octroi duty which was ultimately fixed
in appeal by the Sub-Divisional Officer could not be ques-
tioned by the plaintiffs in the Civil Court. On the ques-
tion of limitation the High Court held that applying the
special period of limitation provided in s. 48 of the Cen-
tral Provinces and Berar Municipalities Act, 1922 the suit
was within limitation as regards the payment made by the
plaintiffs on September 22, 1948 but that it was barred by
limitation as regards the payment made on August 6, 1948.
The suit in regard to the amount paid to the Municipal
Committee in September 1948 was held to be within limitation
on account
186
of the intervening summer vacation during which the Courts
were closed. According to the High Court the exaction of
the double duty being beyond the’ powers of the defendants,
the special period of limitation was not attracted and the
plaintiffs were therefore entitled to recover the sum paid
by way of double duty. In the result the High Court passed
a decree in the sum of Rs. 24,103-13-3 which, according to
it, represented the double duty wrongly recovered by the
defendants from the plaintiffs. The High Court has granted
to both the parties a certificate to file an appeal to this
Court under art. 133(1 ) of the Constitution and both par-
ties being partly aggrieved by the decree of the High Court
have filed cross appeals.
The first question for consideration is whether the
civil court has jurisdiction to entertain the suit brought
by the plaintiffs. It is undisputed that the Municipal
Committee had the power under s. 65(1)(e) of the Act of 1922
to impose octroi tax on the goods brought within the Munici-
pal limits for sale, consumption or use therein. Under rule
6(b) framed by the Provincial Government in exercise of the
powers conferred by ss. 71, 76 and 85 of that Act, octroi
duty was payable on the "current price of articles" which is
equivalent to the cost price of the articles to the importer
plus the cost of carriage and not the price prevailing in
the local market. Prior to 1940, plaintiffs used to submit
to the defendants an invoice relating to the imported goods
wherein the cost price used to be shown by deducting from
the retail price the aggregate amount of expenses amounting
to 40%. Defendants later disputed the deduction claimed by
the plaintiffs and informed the latter by a letter of May 7,
1940 that octroi duty was leviable on the cost price of the
goods as shown in the invoice plus the freight charges.
Plaintiffs accepted that view and started showing in the
invoices the cost price of the articles and the freight
charges. Defendants used to assess octroi duty on those
invoices until the dispute giving rise to the present suit
arose during the year 1946-47, when the basis for charging
the duty was fixed at 61/4% less than the retail price of
the goods and the assessments already made were reopened
with a view to revising them.
Section 83(1) of the Act of 1922 provides for appeal
against the assessment or levy of any tax under the Act to
the Deputy Commissioner or to such other officer as may be
empowered by the Provincial Government in that behalf.
Section 84(3) of the Act which bears directly on the
question of jurisdiction reads thus:
"84(3) No objection shall be taken to
any valuation, assessment or levy nor shah
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."
It is plain from this sub-section that any valuation, as-
sessment or levy and the liablity of any person to be as-
sessed or taxed can be questioned only in the manner pre-
scribed by the-Act and by the authority mentioned in the
Act and in no other manner or by any other authority. Since
the sub-section expressly prohibits a challenge to a
valuation, assessment or levy "in any other manner ....
than is provided in this
187
Act" and since the Act has devised its own special machin-
ery for inquiring into and adjudicating upon such chal-
lenges, the common remedy of a suit stands necessarily
excluded and cannot be availed of by a person aggrieved by
an order of assessment to octroi duty. Similarly, the
sub-section excludes expressly the power of "any other
authority than is provided in this Act" to entertain an
objection to any valuation, assessment or levy of octroi.-
This part of the provision is in the nature of ouster of the
jurisdiction of Civil Courts, at least by necessary impli-
cation, to entertain an objection to any valuation,,assess-
ment or levy. This is the evident intendment, meaning and
implication of the provision.
In Wolverhmpton New Waterworks Company v. Hawkesford(1)
willes J. referred to various classes of cases in which the
jurisdiction of ordinary courts is excluded; the third class
of such cases being "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 view of Willes J., that with respect to that class of
cases the party must adopt the form of remedy given by the
statute and no other, was accepted by the Privy Council in
Secretary of State v. Mask & Company(2) and by the House of
Lords in Neville v. London "’Express" Newspaper, Limited(3).
In Mask & Company’s(’2) case the Privy Council was
dealing with the provisions of the Sea Customs Act, 1876
section 186 whereof gave a right of appeal to the person
aggrieved by any decision or order passed by the Customs
Officers under that Act. Section 191 further gave the
aggrieved person a right to make an application to the Local
Government for revision of the appellate decision or order.
The last paragraph of section 188 provided: "Every order
passed in appeal under this section shall, subject to the
power of revision conferred by section .191, be. final".
The.re was no express exclusion of the civil courts’ Juris-
diction to entertain a suit challenging an order passed by a
Customs Officer but the Judicial Committee, while recognis-
ing that the exclusion of the jurisdiction of civil courts
was not to be readily inferred and that such exclusion must
either be explicitly expressed or clearly implied, observed
that looking at the last paragraph of section 188 of the Sea
Customs Act it was difficult to conceive what further chal-
lenge of the order was intended to be excluded other than a
challenge in the Civil Courts. If a provision merely
giving finality to an order could be construed as ousting
the civil Court’s jurisdiction, s. 84(3) of the Act, which
is far more expressive, can legitimately be construed to
have the same effect. It excludes in terms a challenge to
the various things therein mentioned, in any other manner or
by any other authority than is provided in the Act.
But counsel for the plaintiffs contends that s. 84(3)
cannot oust the civil Court’s jurisdiction to entertain the
present suit because the defendant have no power at all
either under the Act or under the
(1) [1859] 6 C.B. (N.S.) 336.
(2) 67 I.A. 222.
(3) [1919] A.C. 368.
88
Rules framed thereunder to reopen or revise an assessment to
octroi duty. An assessment once made is final subject to
the remedies which the Act provides to the aggrieved party
and since, according to the counsel, the reopening of
assessment is wholly without jurisdiction the suit to chal-
lenge it is competent. The argument, in other words, is
that s. 84(3) may bar a suit to challenge an act which is
within the purview of the Act or the Rules but it cannot bar
a suit to challenge an act which is outside the Act or the
Rules and is therefore wholly lacking in jurisdiction.
In support of the contention that the civil Court has
jurisdiction to entertain the suit plaintiffs’rely princi-
pally on the decisions of this Court in Bharat Kala
Bhandar Ltd. v. Municipal Committee, Dhamangaon(1), B.M.
Lakhani v. Malkapur Municipality() and Dhulabhai and others
v. The State of Madhya Pradesh(3). The appellants in
Bharat Kala Bhandar’s(1) case filed a suit for recovery of
excise tax paid by them under s. 66(1)(b) of the Central
Provinces Municipalities Act, 1922 on the ground that after
the coming into force of s. 142A of the Government of India
Act, 1935 till January 25, 1950 a tax in excess of Rs.
50/--per annum could not be imposed by the Municipal Commit-
tee and that after the coming into force of the, Constitu-
tion, imposition of tax in excess of Rs. 250/- per annum was
tinconstitutional. The Trial Court decreed the suit but on
appeal the High Court held that the suit was bad for non-
compliance with s. 48 of the C.P. Act according to which a
suit for anything done or purported to be done under the Act
had to be instituted within six months from the date of the
accrual of the cause of action. In answer the Municipal
Committee contended that apart from the provisions of s. 48,
the suit was barred by s. 84(3) under which no objection
could be taken to any assessment in any other manner than
is provided in the Act. That section is the very same provi-
sion under which the present suit, according to the defend-
ants, is said to be barred from the cognisance of the civil
Courts. It was held by this Court by majority that since
the Municipal Committee had no authority to levy a tax
beyond what was permitted by s. 142A of the Government of
India Act or art. 276 of the Constitution, the assessment
proceedings were totally void insolaf as they purported to
levy a tax in excess of the constitutionally permissible
limits and therefore the suit was maintainable.
The question involved in B.M. Lakhani v. Malkapur Munic-
ipality (supra) was similar, the contention being that the
recoveries which were made in contravention of s. 142-A of
the Government of India Act, 1935 and art. 276(2) of the
Constitution were wholly without jurisdiction and therefore
a suit for refund of tax recovered by the Municipality in
violation of the constitutional provisions was maintainable.
That contention was accepted by this Court which treated the
matter as concluded by the decision in Bharat Kala Bhandar’s
(supra) case.
(1) [1965] 3 S.C.R, 499.
(2) A.I.R. 1970 S.C. 1002.
(3) [1968] 3 S.C.R. 662.
189
In Dhulabhai and others v. The State of Madhya Pradesh
(supra) the position was similar to that in the two cases
noticed above. Section 17 of the Madhya Bharat Sales Tax
Act provided that no assessment made and no order passed
under the Act or the Rules made thereunder shall be called
in question in any Court. It was conceded by the State
Government that the sales tax levied on the appellants was
unconstitutional in view of art. 301 of the Constitution but
it was contended that the civil Court had no jurisdiction to
entertain the appellants’ suit for refund of the tax in
view of s. 17 of the Act. After an examination of various
decisions including those to which we have referred in
this judgment Hidayatullah, J., who spoke for the Constitu-
tion Bench formulated seven propositions bearing on the
construction of statutes which, expressly or by necessary
implication, bar the jurisdiction of civil Courts. It is
unnecessary to examine each One of those propositions for
the short reason that as in the case of Bharat Kala Bhan-
dar and B.M. Lakhani, (supra) so in the case of Dhulabhai
(supra) the recovery of sales tax was unconstitutional and
the suit, for that reason, was held maintainable. Attention
must, however, be drawn to propositions (1), (4) and (6).
The 1st proposition states that where the statute gives-a
finality to the orders of the special tribunals the Civil
Courts’ 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. The 4th proposition is that when a
provision is already declared unconstitutional or the con-
stitutionality of any provision is to be challenged, a suit
is open. The 6th proposition which bears more appropriately
on the instant case says that 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.
The plaintiffs’ contention that the suit is not barred
from the cognizance of the civil Court is effectively an-
swered by these propositions but even so, a discussion of
the jurisdictional issue will not be complete without
reference to a decision rendered by a seven-Judge Bench of
this Court in Kamla Mills Ltd. v. State of Bombay(1). The
appellants therein were assessed to sales tax on sales which
were treated by the Sales Tax authorities as ’inside sales’
but which according to the decision in Bengal Immunity Co.
Ltd. v. State of Bihar(2) were ’outside sales’ and therefore
non-taxable under the Bombay Sales Tax Act, 1946. After the
decision in Bengal Immunity(2) case which came on September
6, 1955 the appellants discovered that they were illegally
subjected to sales tax and since the period prescribed by
the Act for adopting the remedies thereunder had expired,
the appellants flied a suit for recovery of the sales tax
illegally collected from them in respect
(1) [19661] S.C.R.
(2) [1955] 2 S.C.R. 603.
190
of the outside sales. The State of Bombay contended that
the suit was. barred by s. 20 of the Act which provided, to
the extent material, that no assessment made and no order
passed under the Act or the Rules. shall be called into
question in any civil Court. It was held by this. Court
that s. 20 protected all assessments made under the Act or
the Rules made thereunder and that the protection was wide
enough to cover assessments made by the appropriate author-
ities under the Act whether the assessments were made cor-
rectly or not. Observing that if the appropriate authority
while exercising its jurisdiction and powers under the
relevant provisions of the Act comes erroneously to the
conclusion that a transaction which is an outside sale is
not an ,outside sale and proceeds to levy sales tax on it
its decision cannot be said to be without jurisdiction, the
Court held that the suit was barred from the cognizance of
the civil Court. In coming to this conclusion,the Court
relied upon the decision in Firm and Illuri Subhaya Chetty &
sons v. The state of Andhra Pradesh(1) which had taken the
view, while interpreting a similar provision in s. 18A of
the Madras General Sales Tax. Act, that the expression "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 made correctly or
not. The decision in Bharat Kala Bhandar (supra) was
brought to the notice of the Court in Kamla Mills (supra)
case but that decision was distinguished on the ground that
the provision which fell for construction therein was worded
differently and as observed in Mask & Co. (supra)’ "deci-
sions on other statutory provisions are not of materrial
assistance, except in so far as general principles of con-
struction are laid down". With great respect, the decision
in Bharat Kala Bhandar (supra) is distinguishable for the
weightier reason that the tax recovered in that case was
unconstitutional and no provision of a statute could’ be
construed as laying down that no Court shall have jurisdic-
tion to order a refund of a tax collected in violation of a
constitutional provision. If there were a provision which
so provided or which could be so construed, that provision
would itself be unconstitutional.
In Kamla Mills (supra) case it was observed that
if a statute creates a special right or liability, pro-
vides for the determination of that right or liability by
tribunals specially constituted in that behalf and lays
down that all questions in regard to that right or liability
shall exclusively determined by the tribunals so constitut-
ed, it becomes pertinent to enquire whether remedies nor-
mally associated with actions a civil Court are prescribed
by the said statute or not. If the Court is satisfied that
the Act provides no remedy for making a claim for the recov-
ery of an illegally collected tax the Court might hesitate
to construe a provision giving finality to the orders passed
by the tribunals specially created by the Act as creating
an absolute bar to the suit and if such a construction was
not reasonably possible, the Court would be called upon to
examine the constitutionality of the provision excluding the
civil Court’s jurisdiction in the light of arts. 19 and 31
of the Constitution. According to the 1st proposition in
Dhulabhai’s (supra) case, if the statute gives finality to
the orders passed by the special
(1) [1964] 1 S.C.R. 752.
191
tribunals created by it, the civil Courts jurisdiction would
be excluded if the statute provides adequate remedies to do
what the civil Courts are normally empowered to do in a
suit. The 6th proposition in that case states that ques-
tions 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 authori-
ties are declared to be final or there is an express prohi-
bition in the particular Act. Further, that in either case
the scheme of the particular Act must be examined because it
is a relevant enquiry. These considerations make it neces-
sary to examine the relevant provisions of the Act of 1922
and the Rules framed thereunder with a view to seeing
whether they provide adequate remedies to the aggrieved
party to challenge a wrong or illegal exaction of octroi
duty and whether correspondingly, the authorities specially
created by the Act have the power to do what civil Courts
are generally empowered to do. This inquiry is relevant
even though s. 84(3) of the Act does not merely say that
orders passed by the special tribunals shall be final but
provides that no objection shall be taken to any assessment,
levy etc., in any other manner or by any other authority
than is provided in the Act.
Section 66(1)(b) of the C.P. and Berar Municipali-
ties Act, 1922 empowers the Municipal Committee to impose an
octroi on animals or goods brought within the limits of the
municipality for sale, consumption or use within those
limits. Section 83(1) provides that an appeal against the
assessment or levy of, or refusal to refund, any tax under
the Act shall lie to the Deputy Commissioner or to such
other officer as may be empowered by the Provincial Govern-
ment in that behalf Sub-section 1-A of s. 83 gives to the
person aggrieved by the decision the appellate authority the
right to apply to the State Government for revision of the
decision on the ground (a) that the decision is contrary
to law or is repugnant to any principle of assessment of a
tax, or (b) that the appellate authority has exercised a
jurisdiction not vested in it by law or has failed to
exercise the jurisdiction vested in it by law. Section
83(2) empowers the appellate or revision authority to draw
up a statement of the case and make a reference to the High
Court for its decision if any. question as to the liability
to assessment or as to the principle of assessment arises in
the matter on which the authority entertains a reasonable
doubt. Then comes s. 84 which by sub-s. (1 ) provides for a
limitation of 30 days for appeal and by sub-s. (3) lays down
the injunction which is the bone of contentions in the
instant case that no objection shall be taken to any valua-
tion, assessment or levy nor shall the liability of any
person to be taxed or assessed be questioned in any other
manner or by any other authority than to is provided in the
Act.
Section 71 of the Act empowers the Provincial
Government make rules regulating the assessment of taxes and
for preventing evasion of assessment. Section 76 which
appears under the heading "Collection of taxes" empowers the
government to make rules regulating the collection of taxes
including the prevention of evasion of payment and payment
of lump sums in composition. Section 85 confers similar
empowerment to make rules regulating the refund of taxes.
192
In exercise of the powers conferred by s. 71, 76 and 85
and in supersession of the earlier rules, the Provincial
Government made rules "for the assessment, collection and
refund of the octroi tax" which were gazetted on April 9,
1929 and were amended from time to time. Rule provides that
articles subject to octroi duty are liable to duty as soon
as they enter the octroi limits. Rule 6(b) which prescribes
the mode of calculating octroi duty provides that the cur-
rent prices of articles liable to ad valorem duty shall be
the cost price to the importer plus the cost of carriage and
not the price prevailing in the local market. Rule 8 pre-
scribes the details of the procedure for assessing the
octroi duty. The note to that rule says that the duty shall
be assessed on invoice and not on V.P. covers, Bank re-
ceipts, letters and hundies. Rules 9(a) (b) (c), 10(b), 12,
13(a) and 13(b) provide for various matters relating to
assessment and levy of octroi duty. Rule l4(b) ’provides
that any person importing or bringing any dutiable articles
within the octroi limits of the municipality "without paying
the duty" or without giving declaration to the Octroi Mohar-
rir shall be liable to pay double the duty and shall in
addition be liable to be prosecuted to evasion of duty.
Rules 29 onwards deal with "Refund of Octroi". Rule 31 out
of that collocation of rules prescribes how and when
applications for. refunds may be made.
These provisions show in the first place that the de-
fendants indubitably possess the right and the power to
assess and recover octroi duty and double duty on goods
which are brought within the municipal limits for sale,
consumption or use therein. The circumstance that the
defendants might have acted in excess of or irregularly in
the exercise of that power cannot support the conclusion
that the assessment or recovery of the tax is without
jurisdiction. Applying the test in Kamla Mills (supra),
if the appropriate authority while exercising its Jurisdic-
tion and powers under the relevant provisions of the Act,
holds erroneously that an assessment already made can be
corrected or that an assessee is liable to pay double duty
when rule 14(b), in fact, does not justify such an imposi-
tion, it cannot be said that the decision of the authority
is without jurisdiction. Questions of the correctness of
the assessment apart from its constitutionality are, as
held in DhulaBhai (supra), for the decision of the author-
ities set up by the Act and a civil suit cannot lie if the
orders of those authorities are given finality. There is no
constitutional prohibition to the assessment which is im-
peached in the instant case as there was in Bharat Kala
Bhandar (supra), B.M. Lakhani (supra), and Dhulabhai
(supra). The tax imposed in those cases being unconstitu-
tional, its levy, as said by Mudholkar J. who spoke for the
majority in Bharat Kala Bhandar (supra), was "without a
vestige or semblance of authority or even a shadow of
right."
That is in regard to the power of the authority concerned
to reassess and to levy double duty. Secondly, both
the Act and the Rules contain provisions which we have
noticed above, enabling the aggrieved party effectively to
challenge an illegal assessment or levy of double duty. By
reason of the existence and availability of those special
remedies, the ordinary remedy by way of a suit would be
excluded on a true interpretation of s. 84(3) of the Act.
193
The argument that double duty was levied on the plaintiffs
though justified by the terms of rule 14(b) goes to the
correctness of the levy, not to the jurisdiction of the
assessing authority. That rule ;authorizes the imposition
of double duty if dutiable articles are imported (a) without
paying the duty or (b) without giving declaration to the
Octroi Moharrir. It may be that neither of these two
eventualities occurred and therefore there was no justifica-
tion for imposing double duty. But the error could be
corrected only in the manner provided in the Act and by the
authority prescribed therein. The remedy by way of a suit
is barred.
Plaintiffs sought support to their contention as regards
the maintainability of the suit for refund of double duty
and revised duty, from certain observations contained in
Firm Seth Radha Kishan v. Administrator, Municipal Commit-
tee, Ludhiana(1) to the effect that "a suit in a civil Court
will always lie to question the order of a tribunal created
by a statute, even if its order is, expressly or by neces-
sary implication, made final, if the said tribunal abuses
its power or does not act under the Act but in violation of
its provisions." In the first place, the assessment in the
instant case was made by the authority duly empowered to do
so and secondly the authority was acting under the Act while
revising the assessment and imposing double duty. It had
the power to assess and levy double duty. If it exceeded
that power it acted wrongly, .not without jurisdiction. In
Firm Seth Radha Kishan (supra), the Municipal Committee
being entitled to impose a certain rate of tax on common
salt and higher rate in respect of salt of other kinds,
imposed tax at the higher rate on "sambhar salt" which was a
variety of common salt. Section 86 of the Punjab Municipal
Act, 1911, provided that the liability of any person to be
taxed cannot be questioned in any manner or by any authority
other than that provided in the Act. That provision is
identical with s. 84(3) of the C.P. Municipalities Act,
1922, with which we are concerned in the instant case.
Section 86(2) of the Punjab Act provided that no refund
of any tax shall be claimed by any person otherwise than in
accordance with the provisions of the Act and the Rules
thereunder. It was held by this Court that the liability to
pay terminal tax was created by the Act and since a
remedy was given to the party aggrieved in the enforcement
of that liability, the suit for refund was not maintainable
by reason of s. 86. The observations on which plaintiffs
rely ’cannot, in the context, be taken to mean that the Act
protects correct assessments only and that every incorrect
or wrong order of assessment can be challenged by a suit
though the statute gives it finality and provides full and
effective remedies to challenge it. Except in matters of
constitutionality and the like, a self-contained Code must
have priority over the common means of vindicating rights.
We would like to add that if the observations on which
plaintiffs rely are to be understood literally, they are
contrary to the decision in Kamla Mills (supra) ,case where,
speaking for a seven-Judge Bench, Gajendragadkar C.J. ob-
served that if the appropriate authority while exercising
its jurisdiction and powers under the relevant provisions of
the Act comes to an erroneous conclusion, it cannot be said
that the decision is without jurisdiction (p. 78).
(1) [19641 2 S.C.R. 273, 284.
194
Plaintiff’s reliance on the 1st proposition in Dhuabhw s
(supra) case is equally misconceived. The first two propo-
sitions formulated in that case contain a dichotomy. The l
st proposition refers to cases where the statute merely
gives finality to orders .of special tribunals. In such
cases, according to that proposition, the civil Court’s
jurisdiction would not be excluded if "the provisions of the
particular Act arc not complied with". The instant case
does not fall under the 1st. proposition because s. 84(3) of
the Act does not merely give finality to the orders passed
by the, special tribunals. It provides, expressly, that
such orders shall not be questioned in any other manner or
by any other authority than is provided in the Act. The
2nd proposition deals in its first paragraph with cases
where there is an express bar to the civil Courts’ jurisdic-
tion. The second paragraph of that proposition deals with
cases where there is no express exclusion. The instant case
falls under either one or the other paragraph of this
proposition, which rendered it necessary to examine whether
the Act creates special rights and liabilities, provides for
their determination by laying down that such rights and
liabilities shall be determined by the special tribunals
constituted under it and whether remedies normally associat-
ed with actions in civil Courts are prescribed by the Act.
Upon that examination we concluded that the suit is barred
from the cognizance of the Civil Court.
Not only that the Act of 1922 provides an effective
remedy to an aggrieved party to challenge the assessment of
octroi duty and to claim refund of duty illegally paid or
recovered, but the plaintiffs in fact availed themselves
of these remedies. In 1946-47 when the Municipal Committee
reopened and revised the past assessments by charging octroi
duty on an amount which was only 61/4% less than the retail
price of the goods and when it levied double duty by way of
penalty plaintiffs preferred an appeal against the decision
of the Municipal Committee to the Sub-Divisional Officer,
Jabalpur, who by an order dated’ July 14, 1946 modified the
decision of the Committee by asking them to charge octroi
duty on an amount which was less by 121/2%instead of 61/4%
than the retail price of the goods. Plaintiffs succeeded
to an extent though the Sub-Divisional Officer upheld the
assessment of double duty. Having exhausted their remedies
under the Act and having been benefited by the appellate
decision, though partly, plaintiffs turned to the civil
Court to claim the refund. That is impermissible in view of
the provision contained in s. 84(3) of the Act.
In the result, Civil Appeal No. 1923 of 1972 filed by
the plaintiffs fails and is dismissed. Civil Appeal No.
1924 of 1972 filed by the defendants succeeds and is allowed
with the result that the plaintiffs’ suit will stand dis-
missed. Considering that the defendants revised the assess-
ment after a lapse of time parties will bear their costs
throughout.
P.B.R. C.A. 1923/72 dismissed.
C.A. 1924/72 allowed.
?195