# 77S SUPREME COURT REPORTS (1963] SMT. UJJAM BAI v. STATE OF UTTAR PRADESH

- **Citation:** [1963] 1 S.C.R. 778
- **Court:** Supreme Court of India
- **Decided:** 1963
- **Bench:** S. K. D.As, J. L. Kapur, A. K. SARKAR. K. SUBB.A R.Ao, M. Hid.Ay.Atullah, N. Raj.Agopala Ayy.Angar, J. R.Mudholkar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/77s-supreme-court-reports-1963-smt-ujjam-bai-v-state-of-uttar-pradesh-2636
- **Pages:** 213

## Headnote

Fundamental Right, Enforcement of-Assessment by Sales
Tax Officer under a valid Act-If open to challenge o" the sole
ground of misconstructi·on of Act and Notificati"on-Oonstitution
of India,
Arts. 19(l)(g), 32-Uttar Pradesh Sales Tax Act,
1948(U.P. XV of 1948), s.4(1)(b).
The petitioner was a partnt:r in a firm that carried on
the business of manufacture and sale of hand~made biilis.
On
December 14, 1957, the State Government issued a notification
under s. 4(l)(b) of the U. P.
Sales Tax Act, 1948.
Section 4(1)(b) of the U.P. Sales Tax Act, 1948, providos as
follows:-
"No tax shall be payable on-
( a)
The sale of water, milk, salt, newspapers and motor
spirit as defined ii) the U. P. State Motor Spirit (Taxation)
Act, 1939, and of any other goods which the State Government
may by notification in the Official Gazette, exempt.
(b) The sale of any goods by the All India Spinners'
Association of Gandhi Ao;hram, Mcerut, and their branch("s or
such other persons or class of persons as the State Government
may from time to time exempt on such conditions and on
payment of such fees, if any, not exceeding eight thousand
rupees annually as may be specified by notification in the
Official Gazette."
The notification dated December 14, 1957, issued under
s. 4(1jtb) was as follows:-
"In partial modification of notifications No. ST 905/X,
dated March 31, 1956 and ST 418/X 902(9) 52,
dated
January 31, 1957, and in exercise of the powers confer1ed by
clause (b) of sub-section !I) of section 4 of the U.P. Sales
Tax Act, 1948(U.P. Act No. XV of 1948), as amended up to
date, the Governor of Uttar Pradesh is pleased to order that
no tax shall he pavable under the aforesaid Act with effect
from December 14, 1957, by the dealers in respect of the
1 S. C. R. SYPRBME COURT RENRTS
779
following classes of goods provided that the Additional Central
Excise Duties leviable thereon from the closing of business on
December 13, 1957, have been paid on such goods and that
the dealers thereof furnish proof to the satisfaction of the
assessing authority that such duties have been paid.
I.
................. .
2.
. ........... .
3.
Cigars, cigarettes, biris and tobacco, that is to say
any form of tobacco, whether cured or uncured and whether
manufactured or not and includes the leaf, stalks and stems of
tobacco plant but does not include any part of a tobacco
plant while still attached to the earth."
By a subsequent notification is•.med on November 25,
1958, hand-made and machine-made bidia were unconditio·
nally exempted from payment of sales tax from July 1, 1958.
The Sales Tax Officer sent a notice to the firm for the
as~essment. of tax on sale of bidis during the assessment period
April l, 1958, to June 30, 1958. The firm claimed that the
notification dated December 1.4, 1957, had exempted bidia
from payment of sales tax and that, therefore, it was not
liable to pay sales tax on,xhe sale of bidia. This position was not
accepted by the Sales Tax Officer who passed the following
order on December 20, 1958,-
"The exemption envi~aged in this n'>tification,applies ·to
dealers in respect of sales of biris provided that the additional
Central Excise duties leviable thereon from the closing of
business on 13. 12. 1957 have been paid on such go0ds. The
assessees paid :no such excise duties. Sales af biris by the
assessees are therefore liable to sales tax".
The firm appealed under s. 9 of the Act to the Jqdge
(Appeals) Sales Tax, but that was dismissed on May 1, 1959.
The firm had however moved the High Court under Art. 226
~f tlie Constitution before that date. The High Court took
the view. that the firm had another remed}'\ under the Act and
that the Sales Tax Officer had not committed any appareht
firror in interpreting~ notification of December 14, 1957.
An appeal against the order of the High Oourt on a certificate
under Art. 133 (l)(a) was dismissed bv this Court for non·
pros~cution anp the firm filed an application for restoration
of the appeal: and condonati

## Text

_Characters 0–39,910 of 414,764. This is a partial read: ask again with offset=39910 for what follows._

1962
77S
SUPREME COURT REPORTS (1963]
SMT. UJJAM BAI
v.
STATE OF UTTAR PRADESH
(S. K. D.As, J. L. KAPUR, A. K. SARKAR. K. SUBB.A
R.Ao, M. HID.AY.ATULLAH, N. RAJ.AGOPALA
AYY.ANGAR and J. R.MUDHOLKAR, JJ.)
Fundamental Right, Enforcement of-Assessment by Sales
Tax Officer under a valid Act-If open to challenge o" the sole
ground of misconstructi·on of Act and Notificati"on-Oonstitution
of India,
Arts. 19(l)(g), 32-Uttar Pradesh Sales Tax Act,
1948(U.P. XV of 1948), s.4(1)(b).
The petitioner was a partnt:r in a firm that carried on
the business of manufacture and sale of hand~made biilis.
On
December 14, 1957, the State Government issued a notification
under s. 4(l)(b) of the U. P.
Sales Tax Act, 1948.
Section 4(1)(b) of the U.P. Sales Tax Act, 1948, providos as
follows:-
"No tax shall be payable on-
( a)
The sale of water, milk, salt, newspapers and motor
spirit as defined ii) the U. P. State Motor Spirit (Taxation)
Act, 1939, and of any other goods which the State Government
may by notification in the Official Gazette, exempt.
(b) The sale of any goods by the All India Spinners'
Association of Gandhi Ao;hram, Mcerut, and their branch("s or
such other persons or class of persons as the State Government
may from time to time exempt on such conditions and on
payment of such fees, if any, not exceeding eight thousand
rupees annually as may be specified by notification in the
Official Gazette."
The notification dated December 14, 1957, issued under
s. 4(1jtb) was as follows:-
"In partial modification of notifications No. ST 905/X,
dated March 31, 1956 and ST 418/X 902(9) 52,
dated
January 31, 1957, and in exercise of the powers confer1ed by
clause (b) of sub-section !I) of section 4 of the U.P. Sales
Tax Act, 1948(U.P. Act No. XV of 1948), as amended up to
date, the Governor of Uttar Pradesh is pleased to order that
no tax shall he pavable under the aforesaid Act with effect
from December 14, 1957, by the dealers in respect of the
1 S. C. R. SYPRBME COURT RENRTS
779
following classes of goods provided that the Additional Central
Excise Duties leviable thereon from the closing of business on
December 13, 1957, have been paid on such goods and that
the dealers thereof furnish proof to the satisfaction of the
assessing authority that such duties have been paid.
I.
................. .
2.
. ........... .
3.
Cigars, cigarettes, biris and tobacco, that is to say
any form of tobacco, whether cured or uncured and whether
manufactured or not and includes the leaf, stalks and stems of
tobacco plant but does not include any part of a tobacco
plant while still attached to the earth."
By a subsequent notification is•.med on November 25,
1958, hand-made and machine-made bidia were unconditio·
nally exempted from payment of sales tax from July 1, 1958.
The Sales Tax Officer sent a notice to the firm for the
as~essment. of tax on sale of bidis during the assessment period
April l, 1958, to June 30, 1958. The firm claimed that the
notification dated December 1.4, 1957, had exempted bidia
from payment of sales tax and that, therefore, it was not
liable to pay sales tax on,xhe sale of bidia. This position was not
accepted by the Sales Tax Officer who passed the following
order on December 20, 1958,-
"The exemption envi~aged in this n'>tification,applies ·to
dealers in respect of sales of biris provided that the additional
Central Excise duties leviable thereon from the closing of
business on 13. 12. 1957 have been paid on such go0ds. The
assessees paid :no such excise duties. Sales af biris by the
assessees are therefore liable to sales tax".
The firm appealed under s. 9 of the Act to the Jqdge
(Appeals) Sales Tax, but that was dismissed on May 1, 1959.
The firm had however moved the High Court under Art. 226
~f tlie Constitution before that date. The High Court took
the view. that the firm had another remed}'\ under the Act and
that the Sales Tax Officer had not committed any appareht
firror in interpreting~ notification of December 14, 1957.
An appeal against the order of the High Oourt on a certificate
under Art. 133 (l)(a) was dismissed bv this Court for non·
pros~cution anp the firm filed an application for restoration
of the appeal: and condonation .of dday. During the pendency
of that,~ppe!ll the present 'PeLitivn was filed by th~ ,petitioner
under Art. 32 of the constitution for the enforcement of her
fundamental
ri~ht under
Arts.
19(1)(g)
and
31
of the
con'Stlhltions.
Before
the Consiitntion
Bench
n61
Bmc. Ujjam B•i
••
SC.ti of UIUlr
l'r•tlish
1961
Smt. Ujjam Bai
v.
Slfll~ of UU11r
Pratksh
780
SUPREME COURT REPORTS [196S]
which
heard
the
matter
a
preliminary
objection
was
raised
against
the
maintainability
of
the
petition and the
correctness of
the
decision
of
this
Court in Kailash Nath v. State of U.P. A I.R. 1957 S.C. 790
relied upon by the petitioner was challenged. That Bench
referred the following questions for derision by a larger
Bench,-
" I.
Is an order of assessment made by an authority
under a taxing statute which is intra vires open to challenge
as repugnant to Art. 19 (I) (g), on the sole ground that it is
based on a misconstruction of a provision of the Act or of a
notification issued thereunder ?"
2.
Can the validity of such an order be questioned in a
petition under Art. 32 of the Constitution ?
11
Held
(per
Das, Kapur, Sarkar, Hidayatullah and
Mudholka~, JJ.) that in the case under consideration the
answer to tht que!tions must be in the negative. The case of
Kai/,ash Nath was not correctly decided and the deci•ion is
not sustainable on the authorities on which it was baaed.
Kai/JJshNath v. State of U. P., A. I. R. 1957 S. C. 790,
disapproved.
Bengal Immunity Co. Ltd. v. State of Bih,ar, (1955)
2 S. C. R. 603 and Bidi Supply Co. v. Union of India, (1956)
s. C. R. 267, explained.
Per S. K. Das, J.-The right to move this Court by
appropriate proceedings for the enforcement of fundamental
right~ conferred by Pait IIJ of the Constitution is itself a
guaranteed fundamental right and this Court is not trammelled by procedural technicalities in making an order or issuing
a writ for the enforcement of such rights.
There is no disagreement that in the following three
classes of cases a question of the enforcement of a fundamental
right may arise and if it docs arise, an application under
Art. 32 will lie, namely, (IJ where action is taken under a
statute which is ultra vires the Constitution; (2) where the
statute is intra vir~s but the action taken is without jurisdiction; and ( 3 J where the action taken is procedurally ultra vire•
as where a quasi-judicial authority under an obligation to act
judicially passes an order in violation of the principles of
natural justice.
Where, however, a quasi-judicial authority makes an
order in the undoubted exercise of its jurisdiction in pursuance
l s.c.R. SUPREME OOURT REPORTS
781
of a provision of law which is intra vires, .an error of law or
fact committed by that authority cannot be impeached otherwise than on appeal, unless the erroneous determination relates
to a matter on which the jurisdiction of that body depends.
A tribunal may lack jurisdiction if it is improperly constituted,
or if it fails to observe certain essential preliminaries to the
inquiry; but it does not exceed its jurisdiction by basing its
dedsion upon an incorrect determination of any question that
it is empowered or required (i. e. has jurisdiction) to determine. In such a case, the characteristic attribute of a judicial
act or decision is that it binds, whether right or wrong, and
no question of the enforcement of a fundamental right can
arise on an application under Art. 32.
Therefore, an order of assessment made by an authority
under a taxing statute which is intra vires and in the undoubted exercise of its jurisdiction cannot be challenged on the sole
ground that it is passed on a misconstruction of a provision of
the Act or of a notification issued thereunder. The validity
of such an order cannot be questioned on an application under
Art. 32. The proper remedy for correcting such an error is to
proceed by way of appeal or if the error is an error apparent
on the face of the record, then by an application under
Art. 226 of the Constitution.
Mall&arjun v. N_arhari, (1900) 5 L.R. 27 I.A. 216, Aniyoth
KunAamina Umma v. Ministry of Rahabilitation,(1962)1 S.C.R.
505, Gulabdas II Co. v; Assistant Collector of Customs, A.l.R.
1957 S. C. 733, Bhatnagar & Co. Ltd. v. Union of India, (1957)
S. C.R.- 701, and Parbhani Transport Co-operative Society Ltd.
v. Regional Transport.Authority, (1960) 3 S. C.R. 177, referred
to. Case law reviewed.
Per Kapur, J.-Since the statute was constitutionalJy
valid every part of it must be 10 and the determination by
the Sales Tax Officer, acting within his jurisdiction under the
Act, even though erroneous, was valid and legal.
An order of assessment under a statute that was ultra
tJ&ru could not be equated with one passed under another that
wu intra tliru, even though erroneous. Unlike the former
the latter was a constitutioJaal and legal Act and could not
violate a fundamental
right and or· be impugned under
Art. 3~ of the Constitution.
If the Salea Tax Officer, acting quasi-judicially, miscon$ ..
trued the notification, which it had jurisdiction to c~nstruc)
and imposed a tax, there could be no infringement qf Art. 19
( 1) (g) of the ConatitutiQn
11161
Smt. fljjam Bai
v.
State of Ultar
Pradesh
782
SUPREME COURT REPORTS Ll963]
1911
Case law discussed.
Sr.rt. Ujj•m B1i
••
Sl1u •I Uttlf'
P""4sh
Per Subha Rao, J.-The Conslitulion is the paramount
Jaw.
As the Constitution declares the fundamental rights and
also pres-:ribcs the restrictions that may be imposed thereon,
no institution can overstep the limits directly or indirectly by
encroaching upon the said rights. This Court has no more
important function to perform than to preserve the funda mental rights of the people, and has l:'-cen given all the instituti<r
nal conditions necessary to exercise its jurisdiction without
fear or favour. It is settled law that Art. 32 confers a wide
jurisdiction on this Court to enforce the fundamental rights
that the right to enforce
a fundamental
right is itself~
fundamental right, and that it j1 the duty of this Court to
entertain an application and to d~cidc it on merits whenever
a party approaches it, irrespective of whether the question
raised involves a question of Jurisdiction, Law or fart.
Though the Legislature can make a law imposing rcasonaplc
restrictions on a fundamental right in the interest of the
public, the Constitution docs not empower the Legislature tp
make an order of an executive authority final so '!S to deprive
the Supreme Court of its jurisdiction under Art. 32 of the
Constitution.
The principles and procedure evolved by the courts in
England in regard to the issue of prerogative writs cann.ot
circumscribe tbe wide power of the Supreme Court to issue
orders and directions for the enforcement of fuml11mcnta I
rights. The issuance of such writs can be regulated by evolving appropriate procedure to meet different situations.
What•
ever may be the stage at which this Court is approached this
Court roay in i1s discretion, if the question involved is one of
jurisdiction or a construction of a provision, decide the qucs ..
tion and enforce the right without waiting till the procedure
pres<ribcd by a law is exhausted; but if it finds that questions
of fact or mixed questions of fact and Jaw arc involved, it may
give an opportunity to the party, if he agrees, to renew the
application after he has exhausted his remedies under the Act,
or, if he docs not agree, to adjourn the petition till after the
remedies arc exhausted.
If the fundamental right of the
petitioner depends upon the findings of fact arrivca at by the
administrative tribunals in exercise of the p0wcrs conferred
on them under the Act, this Court may in its discretion
ordinarily accept the findings and dispose of the application on
the basis of those findings.
The principle of rea jvdicata accepted by this llOW't in
Daryao v. Stal• of U. P. cannot be involved in the case 0£
orders of administrative tribunals.
That apart, when a
1 S.C.R.
SUPREME COURT REPORTS 783
petitioner seeks to quash the order of a tribunal, no question
of ru judicata arises, as that doctrine implies that there should
be two proceedings and that in the former proceeding an
issue has been decided inter-pa.rtes and therefore the same
cannot be rcagitated in a subsequent proceeding.
Daryao v. State of U. P. (1962) 1 S. C.R. 564. considered.
Whether relief can be given under Art. 32 against the
order of a court or not, it is c\ear that administrative tribunals
arc only the limba of the Executive, though they exercise
quasi-judicial functions, and therefore arc clearly comprchen·
ded by the expression "other authorities" in Art. 12 of the
Constitution and in appropriate cases writs can be issued
against them.
On a plain reading of the impugned notification it is
clear that hand-made bidis arc exempted from sales tax under
the Act and therefore the Sales-tax Authorities have no power
to impose sales tax thereon.
The decision of this Court in the case of Kailaah Nath v.
State of U. P., was not incorrect or based on irrelevant
decisions.
KailashNath v. State of U. P., A. I. R. 1957 S. C. 790,
followed.
Gulabdas & Co. v. Assistant Collector of Customs, A. I. R.
1957 S. C. 733, Bhatnagara &: Oo. Lid. v. Union of India,
(1957) S. C.R. 701 and Pharbani Transport Co-operative
.jociety v. Regional Transport Authority, (1960) 3 S. C.R. 1'77.
considered.
· Mjs. Ram Narain Sona Ltd. v • ...4,asU. Commisaion,er of
Sales Paz, (1955) 2 S. C.R. 483, J. V. Gokal & Oo. v. Asatt.
Collector of Salu Paz, (1960) 2 S. C.R. 852 and M. L. Arora
v. Ezcise and Tazation Officer,
(1962) 1 S. C. R. 823
referred to.
'
'
Case-law discussed.
Per
Hidayatullah, J .-Article 32 contains a gwμ-a,ntcc:d
right to move the Supreme Court for enforcement of fundain•
ental rights and any person whose fundamental rights bav~ been
invaded has a guaranteed right to ~k relict from the Court
without having to seek to enforce his remedies elsewhere first.
:-.nt the right which he can claim ·is no~ a general right of
.~ppeal tgain.'lt dcci!!ion, of courts ao.d tribqna1$, The Supreme Court in examining such petitions·would examine them
1961
Smt. Ujjam B•I
••
s 1a.t1 •f Ult•
Prntl,sh
198'
s,,.t. UJjam Bai
v.
Slat1 of U" 1r
Pr•tl1sh
784 SUPREME OOURT REPORTS (1963]
from the narrow stand point of a breach of fundamental
rights. If a petitioner fails to establish that, he will fail
outright.
Taxing laws may sufl'cr froru mauy defects : they may
be opposed to the fundamental rights, they may be made by a
legislature beyond its own competence, or without observing
the formalities laid down by the Constitution. If a taxing
law is opposed to fundamental rights it can be challenged
under Art. 32.
It is not necessary to resort only to Art.265
because Art. 32 stands in no need of support from Art.265.
The taxing authorities are instrumr.ntalitics of Govern ..
ment. They are a part of the executive even though in
assessing and levying the tax they act as quasi-judicial bodies.
Their actions in demanding the tax in the ultimate analysis
are executive actions. If that action is not backed by law or
is beyond their jurisdiction an aggrieved person can have
recours• to Art. 32 of the Constitution. Where, however,
no question of vire• of the law or jurisdiction is involved the
Supreme Court would ordinarily not interfere in a petition
under Art. 32 even though the interpretation he erroneous as
the matter can be set right by recourse to such appeals or
revisions as the law permits.
This is based upon the well
accepted rule that a court having jurisdiction may decide
wrongly as well as rightly. If there i• an error not involving
jurisdiction that error can be corrected by the ordinary means
of appeals and revisions including an appeal by special leave
to the Supreme Court. But if the law is unconstitutional or
the interpretation is about jurisdiction which is erroneous a
writ under Art. 32 can be claimed. The Supreme Court
will keep its two roles separate, namely, (a) as the Supreme
Appellate Tribunal against
the decisions of all r.ourts and
tribunals and (b) as Court of guaranteed J"Cllort for enforcement of fundamental rights.
It will not act as the latter
when the case is only for exercise of its power as the former.
It will, however, interfere if a clear case of breach of fundamental rights is made out even though there may be other
remedies open including an approach to the Supreme Court
in its appellate jurisdiction.
Ptr Ayyangar, J.-From the fact that a statute was
competently enacted and did not violate fundamental rights,
it did not necessarily follow that quasi-judicial authorities
created by it could not violate fundamental rights.
Legislative competence covered only such action as could on a proper
interpretation of the statute be taken under it. If a law did
not create a liability an authority acting under it could Rot
do so by a 111iainterpret1ltion of it, for Legialative backing for
1 S.C.R.
SUPREME COURT REPORTS
785
the imposition of such a liability would be plainly lacking.
The answer· to the question should, therefore, be that an
action of a quasi-judicial authority would violate a fundamental right where by a plain and patent misconstruction of the
statue such an authority affected fundamental rights. This
would constitute another category besides the three others in
respect of which violation of such rights was not in doubt,
namely, where the statute itself was invalid or unconstitutional, where the authority exceeded its jurisdiction under the
Act and where it contravened mandatory procedure prescribed
by the statute or vielated the principles of natural justice.
The exerciae of the judicial power of the State might alsq
equally with the Legislative and Executive part involve the
violation of fundamental rights guaranteed by Part III of the
Constitution.
Since in the instant case the construction put upon the
notification by the Sales Tax Officer was reasonable possible,
it was a c;ase of mere error of law and not a pat~nt error or an
error apparent on the face of the record which could justify
the issue of a writ of certiora1i.
Per Mudholkar, J.-The question of enforcement of a
fundamental right could arise if a tax wa! a§sessed under a
law whiCh was (I) void under Art. 13 or, (2) was ultra virea
the Constitution or, (3} where it was suborainate legislation,
it was ultra virea the law under which it was made or inconsistent with any other law in force.
A Similar question would arise if the tax was assessed
by an authority (I) other than the one empowered to do so
under the taxing law Qr (2) in violation of the procedure
prescribed by law or, (3) in colourable exercise of the powers
conferred by the law.
\Yhere a tax ~
a&Sessed bona· fide by a competent
authority under a vahd law ind under the procedu1e laid
down by it, no question of infringement of any fundamental
right could arise, even though it was based upon an erroneous
construction of law unless the tax imposed was beyond the
competence of the Legislature 01· violated any of the fundamental rights or any other provisions of the Constitution.
A mere misconstruction of a provision of ?aw did not
render the decision of a quasi-judicial tribunal void as being
beyond jurisdiction.
It stood till it was corrected in the
appropriate manner and if such a decision a person was held
liable to pay tax he could not treat it as a nullity and contend
that it was not authorised by law: The position would be
1968
Smt. Ujjam 81J1
·v.
Staleiof Utta1
Pra<Jesh
Smt. U.iJam B11i
••
Sl.t• •f U1tar
l'rt1duh
786
SUPREME COURT REPORTS [1963]
the same even though upon a proper construction the law
did not authorise the levy.
'
0RIGIN.4.L JURlSDICTION : Petition No. 79 of
l!J59.
Petition under Art. :!2 of the Constitution of
India for enforcement of Fundamental Rights.
WITH
Civil Miscellaneous Petition No. 1349 of 1961.
Application for restoration of Civil .Appeal
No. 172 of 1960 M/s. Mohan Lal Hargovind Dai
v.
The_ Sales Tax Officer, Allahabad.
M. 0. Setalvad, Attorney-General of India, G. K.
Daphtury, Solicitor·General of India, G. S. Pathak,
S. V. Khare, S. N. And.leg, Rameahwar Nath and
P. L. Vohra, for the petitioner.
H. N. Sanyal, Additional Solicitor-General of
India, M. V. Goswami and O. P. Lal, for the respon·
dents.
N. ,A. Palkhivala, B. Parthaaqrathi,
J. B.
Dadachanji, 0. G. Mathur, and Ravinder Narain, for
Intervener (Tata Engineering and Locomotive Co.,
Ltd., Bombay).
A. S. fl. Chari, D. P. Singh and M. K. Ram11murthi, for Intervener (State of Bihar) .
H. N. Sanyal, Additioru&f, Bolicit<>r-Genera/, of
Ind.Us,, B, R. L. Iyengar and T.JI. Sen, for Intervener
(State of lly110re).
S. N. Andley, Rameahwar Nath and Vohra, for
the petit\oner (in C. M. f. No. 1349 of 1961).
H. N. 8anya/,, .ddditional Solicitor-General of
India, G. G. Mathur, M. V. Go&Wa'llJ,i for C. P .. ui,
for the respondent (in C. M. P. No. 1349 of 1961).
--(
1 S. C. R. SUPREME COURT REPORTS
787
1961. April 28.
The above petition coming
up for hearing in the first instance before the
Constitution Bench consisting of S. K. Das, J. L.
Kapur, M. Hidayatallah, J.C. Shah and T. L.
Venkataram Ayyar, JJ., the matter was referred
to the Chief Justice under O. V-A, r. 2 of the
Supreme Court Rules, 1 U50,
as a.mended, by a
Judgment delivered by
VENKAT.A.RAMA AIYAR, J.-The petitioner is
a partner in a. firm oa.lled Messrs.
Mohan Lal
Hargovind Das, which carries on business in the
manufacture a.nd sale of biris in number of States,
and is dealer registered under the U .P. Sales Tax
Act 15 of 1948 with its head office at A1Iahabad.
In the present petition filed under Art. 32 of the
Constitution, the petitioner impugns the validity
of a levy of sales tax made by the Sales Tax
Officer, Allahabad, by his order dated December
20, 1~58.
On December 14, 1957, the Government of
Uttar Pradesh issued a notification under s. 4(1)
(b) of the Act exempting from tax, sales of certain
goods including biris, provided that the additional
Central Excise duties leviable thereon had been
paid.
Jn partial modification of this notification,
the Government issued another notification on November 25, 1958, exempting from tax unconditionally sales of biris, both machinemade and handm ·tde, with effect from July 1, 1958, The effect
of the two notifications aforesaid taken together
is that while for the period, Deoember 14, 1957, to
June 30, 1958, the exemption of biris from tax was
s1~bject to the proviso contained in the notification
dated December 14, 1957, for the period commencing from July 1, 1958, it was unconditional and
absolute.
The petitiom~r's firm filed its return for the
quarter ending June, 1958, disclosing a gross turn1962
Sml. U]Jam 11-i
v.
Sto•• 11! Utl•r
Pruesh
-~---·
788
.. SUPREME COURT REPORTS [1963]
1362 .
Smt. Ujjarit Bwi.
over of Rs. 75,44,633(- and a net turnover of
Rs. lll/- representing the sale proceeds of empty
packages, and deposit~d a sum of Hs. 3.51 n.P. as
sales tax on the latter. On November· 28, 1958, the
••
SttJllofUttar
Pradesh
. ·Sale~ Tax Officer, Allahabad, sent a notice to the
\ pe'. ... .>aer's firm for assessment of tax on the sale
of biris during the period, April J, 1958, to June 30, ·
··· ·1958, and·cin the date 'of enquiry which was held
on December 10, 1958, the petitioner filed a petition stating that by rea,son of the exemption grant-
, ed under tlie
notification No. ST-4485/X dated
December 14, 1957, no tax was payable on the. sale
of biris.. By his order dated. December 20, 1958,
the Sale Tax Officer rejected tbis .. contention. He
observed:
.
"The exemption envisaged in this noti-
. fication applies to dealers in respect of Biris;
. provided that the· additional Central Excise
. ·duties leviable thereon from the closing of
. business on December 13, J 957, have beeri
·paid on such· goods.. The assessee paid no
such Excise duties. Sales of Biris by the assessee are, therefore, liable to sales tax."
Against this order; there was an a}'peal (Appeal No.
441'of1959) to the Courts of the Judge (Appeals),
Sales Tax, Allahabad, who, by his order dated l\fay
·' I, 1959, dismissed the same on the ground that the
· ·exemption from sale tax under the notification
· related "to such classes of goods only on which the
Additional Central Excise Duty was . leviable.''
Under s. IO of the Act; a person aggrieved by an
order in appeal might take it up on revision before
·the Revising Authority, and under s, 11, the asses-
.. see has a right to require that any question of law '" ..
, .... arising out of the order of assessment be referred
to the opinion of the High Court. The Petitioner
did not take any proceedings under· the Act against .
. the order.in appeal'dated l\Ia;v 11 1959, anq that 4a& ..
peco!lle fmal.
·
.
.
.
. .
·
·r
-~
1 S. C.R.
SUPREME COURT REPORTS
789
While Appeal No. 441 of 1959 was pending,
the petitioner also filed under Art. 226 of the
Constitution a petition in the High Court
of
Alla.ha.bad, for a. writ of certiorari to qua.sh the
assessment order dated December 20, 1958. That
was dismiSBed on January 27, 1959, by the learned
Judges on the ground that, as the assessee could
contest the validity of the order in appropriate proceedings under the Act, and as, in fact, an appeal had
b~en filed, there was no ground for exercising the
extra.ordinary jurisdiction under Art. 226. In this
view, the learned Judges did not decide the case on
the merits, but observed that the "language of the
notification might well be read as meaning that the
notification is to apply only to those goods on
which an additional Central excise duty had been
levied and paid." The petitioner then field an
application under Art. 133 of the Constitution for
certificate for appeal to this Courts against the
above order, and that was granted. But instead
of pursuing that remedy, the petitioner has chosen
to file the present application under Art. 32 challenging the validity of the order of assessment dateed December 20, 1958. It is alleged in the petition
that t.he imposition and levy of tax aforesaid
"amounts to tP,e infringement of the fundamental
rights of the petitioner to carry on trade and
busineSB guaranteed by Art. 19 (1) (g) of the Constitution," and that it is further "an illegal confisoation of property without compensation and contravenes the provisions of Art. 31 of the Constitution." The prayer in the petition is that this
Courts might be "pleased to issue-
( a)
a writ of certiorari or other order in the
na.ture of certiorari qua.ahing the ~order of the Sales
Tax Officer, Al1ahabad, dated 20th December 1958;
(b) a writ of mandamus directing the opposit.e
parties not to realise any sales tax from the petitioner on the basis of the said order dated 20th
Deoember, 1958."
196B
Smt. Ujjam Bai
v.
Stet1 of Uttu
Praduh
.AiyarJ.
1962
Slilt. Ujja,. Bo;
v.
Sl•I• of Utltrr
p •tfnh
790
SUPREME COURT .REPORTS (1963]
No argument has been addressed to Ull that
the impugned nrder of aEsessment is in contnvention of Art. 31. Such a contention would be wholly
untenable in view of the decision of this Court in
Ramjilal v. Inwme-t,ax Officer (') and Laxmanappa
Hanumant,appa v. Union of India' ('), where it has
been held that when tax is authorised by law as
required by Art. 265, the levy is not open to attack
under Art. 31 of the Constitution. Th whole of the
argument on behalf of the petitioner is that the
assessinen t order is unconstitutional as infringing
Art. 19(1 )(g ). It is contended in support of this
position that the Sales Tax Officer has misconstrued
tlie notification dated December 14, 1957, in holding
that exemption of tax thereunder is limited to biris
OD which additional excise duty had b1 en levied,
that as s result of such misconstruction
tax he.6
been imposed which is unauthorised, and that
constitutes an interference with the light of the
petitioner to <'arry on business guarantePd by
:Art. l9(l)(g). That is how the jurisdiction of this
Court un<ler Art. 32 is invoked.
To this, the answer of the respondents is that
the Sales Tax Officer had correctly construed the
notification in limiting the exemption to iroods on
which additional euise duty had been paid
The
respondents fort her raise a preliminary o bjeotion
to the maintainability of this petition on the ground
that Jaws of taxation which are protected by
Art. 26.'i fall outside the purview of Part III of the
Constitution, and are not open to attack as infringing fundamental rights iruaranteed therein, 1tnd that
even if they are subject to the restrictions in Part
III, an order of assessment made by a tribunal
acting iudicially under a statute which b intra i>ires
such as the impugned order dat<'d DecPmber 20
1958. does not infringe Art. 19(1\(g), and that, further, a petition un<ler Art.32 is not maintainable
(1) [1951] S.C.R. 127. 136, 137.
(2) (1"55) 1 S.C.R 769, 772.
l S.C.R.
SUPREME COURT REPORTS
791
for challenging it, even if it is erroneous on the
merits.
On these contentions, the points that arise for
decision are whether taxa.tion laws are subject to
the limitations imposed bv Part III; whether th~
order of assessment dated December 20, 1958, is in
contravention of Art. 19(l)(g); and whether it can
be impugned in a. petition under Art. 32 of the
Constitution. The first question that fa.Hs to be
considered is whether the restrictions imposed in
Part m of the Constitution have application to
taxation laws. The contention of the respondl"nts
is that ·taxation is a topic which is dealt with separately in Pa.rt XII of the Constitution, that the
governing provision is Art.265, which enacts that no
tax shall be levied or collected except by authority
of la.w, that when there is a law authorising the
imposition of tax and that does not contravene any
of the inhibitions in Part XII, then the lery thereunder cannot be attacked as infringing any of the
fundamental rights declared in Pa.rt III. In support
qf thi.s contention, the following observations in
Ramjil,al,'s case (1) were relied on:
"Reference ha.a next to be ma.de to article
265 which is in Part XII, Chaptt•r I, dealing
with · 'Finanoe''. That article provides th11t ·tax
shall be levied or collected except by authority
of law. There was no similar provision in
the correspond in~ chapter of the Government
of India. Act, 1935. If collection of taxes
amounts to de.privation of property within the
meanin~ of Art. 31(1), then there was·no point
in making a. separate provision again as ·has
been made in article 265. It, therefore, follows
tha.t clause ( 1) of Article 31 must be regarded
as concerned with deprivation of propert.y
otherwise thnn by the imposition or collection
or tax, for otherwise article 265 becomes
(I l (1951) S C.R. 127, 136, 137.
1161
Smt U'J]tD11 Bai
'·
S~lefUtlti'
PNll'ish
A.iyar J.
19'2
Sml. Ujjam Bai
v.
Sl•I• of UUar
Pra'4sh
792
SUPREME COtmT REPORTs [1963)
wholly redundant. In the United States
of America the power of
taxation
is
regarded aa
distinct from
t,he
exercise
"of police power or eminent domain. Our
Constitution evidently has also treated taxation as distinct from compulsory acquistion of
property and has made independent provisition
giving protection
&gainst taxation save by
authority of law ......... In our opinion, the
protection against imposition and collectiol}
of taxes save by authority of law directly
comes from article 265, and is not secure<:l. by
clause (1) of Article 31. Article 265 not being
in Cha.pter III of the Constitution, its protection is not a fundamental right which can be
enforced by an applicAtion to this court under
article 32. It is not our purpose to say that
the right secured by article 265 may not be
enforced. It may certainly be enforced by
adopting proper proceedings. All that we wish
to state is that this application in so far as it
purports to be founded on article 32 read with
article 31 ( 1) to this court is misconceived
and must fail."
A similar decision was given
in LaxmanaJYP<J
Hanurnant.appa v. Union of lntlMt (1). Where an
order of assessment made in November, 1953, was
attacked in a petition under Art. 32 on the ground
that the Act under which it was made, viz,, the
Taxation on Inoome (Investigation Commission)
Act (30 of 1947) was void under Art. 14 of the
Constitution. !{ejecting this contention, Mahajan,
C. J., delivering the Judgment of the Court, observed:
"The assessment orders under the Incometax Act itself were made against the petitioner
in November. 1953. In these circumstances
(I) (1955) I s.c.R. 769, 772.
I
l S.C.R.
SUPREME OOORT REPORTS
793
we are of the opinion that he is entitled to no
Pelief under the provisions of article 32 of the
Constitution. It was held by this Court in
Bamji'lal v. lncome1f.az Officer, Mohindergarh(1)
that as there is a. specie.I provision in article
26.5 of the Constitution that no tax shall be
levied or collected accept by authority of law,
clause (1) of artiole:&l must therefore be r6garded as concerned with deprivation of property
otherwise than by the iimposition or collection
of taix, and ina~muoh as the right conferred
by article 265 is not a right conferred by
Part III of the Constituiion, it could not be
enforced under article 32."
The argument of the re~pondents based on the
a.hove decisions is tha.t a law imposing a ta.x enacted
by a. competent Jegisla.tur~ .is not open to atta.1:k
under the provisions of Pa.rt III.
The contt>ntion of the petitioner, on the other
hand, is that a. law of taxation is.also subject to the
limitations prescribed in Part III of the Constitution, and the recent decision of this Cour:t in K. T.
MoopilNair. v. The 8wte of Keral,a (2) ie relied on
in support of it.
There, the question was whether
the provisions of the Tra.vanoore-Coohin Land Tax
Act 15 of 1955, as amended by the 'l'ra..vanooreOoohin Land Tax (Amendment) Act 10 of 1957,
contravened Art. 14 of the Constitution. The Court
wurof:the opinion that the.y did. Then the contention WAS raised that in view of Art. 265 the legislation wae not open to attaok .under therprovisions of
Pa'dt III. •In repelling this contention, the Co.urt
Observed:
"Article 265 i~poses a. limitation on the
ta.zing power of the State in so far as it
prov:ides that. the State sba.11 not levy or
collect a tax, except by authority of law, that
(I) (19Sl) S.(;.R. 127, 136, 137.
(2) ( 1961) 3 s.c.a. 71.
1911
Sml. Ujjam B d
v.
s1ai. •I f1 ,,.,.
J96J
Smi. Ujjam Bai
••
S1at1 If UlltW
p,.tJ4s'
A\yar I.
794
SUPREME COURT REPORTS (1963]
ia to say, a tax cannot be levied or collected
by a mere executive fiat. It has to be done
by authority of law, which must mean valid
law. In order that the law may be valid,
the tax proposed to be levied must be within
the legislative competence of the Legislature
imposing a tax and authorising the collection
thereof and, secondly, the tax must be subject
to the conditions laid down in Art.13 of the
Constitution. One of such conditions envisaged by Art. 13( 2) is that the Legislature shall
not make any law which takes away or abridges the equality clause in Art. 14, which
enjoins the State not to deny to any person
equality before the law or the equal protec.
tion of the laws of the country. It cannot be
disputed that if the Act infringes the provisions
of Art. 14 of the Constitution, it must be
struck down as unconstitutional."
In the result, the impugned legislation was struck
down as unconstitutional.
It might appear at first sight that this decision
is in conflict with the decisions in Ramjilal's case (1)
and Laxmanapp's case ('). But when the matter
is closely examined, it will be seen that it is not so.
In Ramjilal's case (1) and in Laxmnappa's case('),
the contention urged was that the tax which is duly
authorised by valid legislation a.s required by
Art. 265 will still be bad under Art. 31(1) a.s a.mounting to deprivation of property. This was negatived,
and it was held that Art. 31(1) had no application
to a law, which was within the protection afforded by Art. 265.
There are observations in the
above decisions which might be read a.s meaning
that taxation la.we a.re altoirether outside the operation of Pa.rt III. But, in the context, they have
reference to the application of A~ 31(1.). In
(I) ( 1951) s.c.R.127. 156, IS7.
(2) ( 1955) I S.C.R 769. 17Z.
1 S.C.R
SUPREME OOURT REPORTS
795
Moopil Nair's oase (1), the contention urged was
that even though a taxing law might be discriminatory. it was not open to attach under Art. 14 by
reason of Art. 265. In negativing this contention, this Court held that a law which authorised
the imposition of a tax under Art. 265 was also a
law within Art. 13, and that, therefore, if it contravened Art. 14 it was liable to be struck down.
This decision js clearly an authority for the position that laws of taxation must also pass the test
of the limitations prescribed in Part III of the
Constitution. But it is not an authority for the
position that a.11 the provisions contained in Part
III are necessarily applicable to those laws. It
did not decide contrary to Ramjilal's case (2) and
LaxmJJnappa's Qase.(3) that Art.31(1) would apply to
a taxation law, which is otherwise valid. In our
judgment. the correct position in law is that a
taxation law infringes a. fundamental right cannot
be shut. out on the ground that Art. 265 grants
immunity to it from attack under the provisions of
Part III, but that whether there has been infringement must be decided on a consideration of the
terms of the particular Article, which is alleged to
have been infringed, It is on this reasoning that
taxation laws were held in Rumjilal's case (2) and
in LaxmJJooppa's case C) to be unaffected by
Art. 31(1), whereas in Moopit Nair's case (1) tht1y
· were held to be within the purview of Art. 14.
In this view. the ·question that arises for
decision is whether Art. 19(1) (g), which is alleged
to have been infringed, is applicable to a sales tax
law which bas been enacted by a competent
legislature and which is not otherwise Ultra vires.
Article 19(1) (g) enacts that all citizens have the
right to practise any profession or to carry on
any occupation, trade or busines~. Is a law
imposing a tax on ea.le by a dealer an infringement of his right to carry on trade ? We . must
(l) (1961) S s.C.ll. '7.
·
(2) (1951) S.C.ll. 127, 136. 137.
($) (1VS5) 1 S.C.ll. 769, 722.
1962
81111. Ujjom Bai
v.
State of Uttar
Praduh
1962
Smt. Ujjam Bai
••
Stat1 oj Uttar
Praderh
796
SUPREME COURT REPORTS [1963J
assume for the purpose of the prosent diaoussion
that the sales tax statute in question is within
the competenca of the legislature and is not ultra
vires.
Where a law is passed by a
legislature
which has no competence to enact it as when a
States Legislature imposes what is in substance, a
tax on income, a subject which is within the exclusive competence· of the Centre under Entry 82,
that legislation has no existence in the eye of 'law
and any levy of tax under the provisions of that
law will not be within the protection afforded by
Art. 265, and will, in consequence, be hit by
Art.
19( 1) (g). The same result would follow
when a law though disguised as a taxation law,
is, in substance a law which is intended to destroy
or even burden trade and not to raise revenue.
That is colourable legislation which cannot claim
the benefit of Art. 2tl5, and it must be held 'to
contravene Art. 19(1) (g) unless saved by Art. 19(6).
But where the law in within the competence of
the legislature and i9 otherwise valid and is not
colourable can it be said that it is liable to b~
attacked as infringing Art. 19(1) -(g)? The.object
of the legislation is not to prevent the dealer
from carrying on his business. Far from it it envi·
sages that the tra'ler will carry on his business
and carry it on a large scale so that the State
might iiarn the tax. It.