# BATA SHOE CO v. CITY OF JABALPUR CORPORATION - **Citation:** [1977] 3 S.C.R. 182 - **Court:** Supreme Court of India - **Decided:** 1977-03-11 - **Bench:** Y'. V. Chandrachud, P. N. Shinghal - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/bata-shoe-co-v-city-of-jabalpur-corporation-7180 - **Pages:** 13 ## Headnote Central Pl'ovinces & Berar Municipalities Act, 1922 s. 84(3 )-Scope ofAct sefj.contained Code-"".Obiections 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. The (~entrai Provinces and Berar Municipalities Act, 1922, empowers a municipality to assess and recover octroi duty on goods brought within the municipal I imits for sale. consumption and use therein. Under the Act an appeal against assessment or levy or refusal to refund any tax lies to a desig· nated official. A person aggrieved by the decisic1n. of the appellate authority has a right to apply to the State Government for revision. The. Act also provides for reference to the High Court on questions like liability to assessment 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 n1anner 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 ti.e 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 uf 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 tate. 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 pay1n~nt of duty on the goods. The appellate authority modified the decision of the· municipality but upheld the assessment of double duty. The plaintiffs' revj5ion application was rejected by the Board of Revenue. The plaintiffs pai({ the duty and penalty under protest and filed a suit for rtecovery of the amount on the ground that the municipality was not entitled to recover the amount of octroi duty and penalty. Overruling the defendant municipality's objection as regards the civil court's jurisdiction to entertain the suit the trial court decreed the suit. On appeal. the High Court held that the dcfendessment 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 co~nsel, the reop~m?g of assessment is wholly without jurisdiction the smt to challenge 1t 1s 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 th~ Act or the Rules but it cannot bar a suit to challenge an act which 1s outside the Act or the Rules and is therefore wholly Jacking in jurisdiction. In support of the contention that the civil Court has jurisdiction to entertain the suit plaintiffs rely principally on the decisions of this Court in Bharat Kala Bhandar Ltd. v. Municipal Committee, Dhamangaon('), B. M. Lakhani. v. Malkapur Municipality(') and Dlmlabhai and others v. The State of Madhya Pradesh("). The appellants in Bharat Kala Bhandar's(') 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 Committee and that after the coming into force of the Constitution, imposition of tax in excess of Rs. 250/- per annum was unconstitutional. 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 provision under which the present suit, according to the defendants, 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 insofar 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 M_unicipa~ity (supra) was similar, the contention being that the reeovenes wh1~h were made in contravention of s. 142-A of the Government of Jndrn Act. 1935 and art. 276(2) of the Constitution were wholly without jurisdiction and therefore a suit for refm.1d of tax . ~ecovered by ~he Municipality in violation of the constitutional prov1s1ons was mamtamable. That contention was accepted by this Court which treated the matter as concluded by the decision in Bharat Kala Bhandar's (supra) case. (I) [1965] 3 S.C.R. 499. (2) A.LR. 1970 S.C. 1002. (3) [I 96i] J S.C.R. 662. • ,J " -- ,- - --- BATA SHOE co. v. JABALPUR CORP. (Chandrachud, J.) 189 In Dhulabhai and others v. The State of Madhya Pradesh (supra) foe position was similar to that in the two cases noticed above. Section 1 7 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 un- (:Onstitutional 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 vari,ous decisions including those to which we have referred in this judgment Hidayatullah, J., who spoke for the Constitution 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 Bhandar 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 constitutionality of any provis'on 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, arc 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 "xpress prohibition in the particular Act. In eith•:r case the sch~me ·of the particular Ac:t must be cxammed because 1t 1s a relevant enqrnry. T~e plaintiffs' contention that the suit is not barred from the cognizance of the civil Court is effectively answered by these propositions but even so, a discussion of the jurisdictional issue will not be complete withou.t reference to a decision rendered by a seven-Judge Bench of this Court in Kam/a Mills Ltd. v. State of Bombay('). 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 'out- ,;de sales' and therefore non-taxable under the Bombay Sales Tax Act, 1046, After the decision in Bengal Immunity(') case which came on September 6, 1955 the appellants discovered that they were illegally 'ubjected to sales tax and since the period prescribed by the Act for adopting the remedies thereunder had expired, the appellants filed a -suit for recovery of the sales tax illegally .collected from them in respect 0) [1966] t S.C.R. 64. (2) J,t955] 2 S.C.R. 603. A B c D E F G H A B c D E F G H 190 SUPREME COURT REPORTS [1977) 3 S.C.R. 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 authorities under the Act whether the assessments were made correctly or not. Observing that if ~he 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 ca@ot 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(') which had taken the view, while interpreting a similar provision in s. 1 SA 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· r,r not. The decision in Bharat Kala Bhandar (supra) was brought to· the notice of tile Court in Kam/a Mills (supra) case but that decision was distinguished on the ground that the provision which fell for conslruction therein was worded differently and as observed in Mask & Co. (supra) "decisions on other statutory provisions are not of material assistance, except in so far as general principles of construction 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 jurisdiction 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 Kam/a Mflls (supra) case it was observed that if a statute c1cates a special right or liability, provides 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 r.e exclusively determined by the tribunals so comtituted, it becomes pertinent to enquire whether r~medies normally associated with_actions in a civil Court are prescribed by the said statute or not. If ihe Court is satisfied that the Act provides no remedy for maki~ a claim for the· re~overy 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 ab~olute 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 statut F G 192 SUPREME COURT REPORTS (1977] 3 s.c.R. In ex~rcise of the powers conferred by s. 71, 76 and 85 and in supersess1on 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 1 provides tbat 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 current 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 prescribes the details of the procedure for assessing the octroi duty. The note to that rule says that the duty shall be ~ssessed on invoice and not on V. P. covers, Bank receipts, letters and hundies. Rules 9(a) (b) (c), lO(b), 12, 13(a) and 13(b) provide for various matters relating to assessment and levy of octroi duty. Rule J4(b) provides that any person importing or bringing any dutiable articles within the octroi limits of the municipality '"withou: paying the duty" or without giving 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. 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 defendants indubitably possess the right and the power to assess and recover octroi duty and double duty on goods which are brought within the municipal Emits 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 Kam/a Mills (supra), if the appropriate authority while exerci,iog its jurisdiction 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), iu fact, does not justify such an imposition, it cannot be said that the decision of the authority is without jurisdiction. Questions of th~ correctness of the assessment apart from its constitutionality are, as held in DhulaBhai (supra), for the dedsion of the authorities set up by the Act and a civil suit cannot lie if the orders of those authorities are given finality. There is uo constitutional prohibition to the assessment which is impeached in the instant case as there was in Bharat Kala Bha11dar (supra), B. M. Lakhani (supra), and Dhulabhai (supra). The tax imposed in those cases being uncoustitutional, its levy, as said by Mudholkar J. who spoke for the majority in Bharat Kala Bhandar (supra), was "without a vestige or sembl~nce 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 H 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. ( :"' •' BATA SHOE co. v. JABALPUR C-ORP. (Chandrachud, J.) 193 The argument that double duty was levied on the plaintiffs though A not justified by the terms of rule 14 (b) goes to the correctness (1[ the Je\y, not to the jurisdiction of the assessing authority. That rule authorizes the imposition of double duty if dutiable articles arc 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 justification for imposing double duty. But the error could be corrected only in the manner provided B in the Act and by the authority prescribed therein. The remedy by way of a suit is barred. Plamtiffs sought support to their contention as regards the maintainability of the suit for refund of double duty and revised duly, from certain observations contained in Firm Seth Radha Kisha11 v. AdminLitrator, Municipal Committee, Ludhiana(') to the effect that "a :,uit 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 necessary implication, made final, if the said tribunal abnses its power or does not act under c 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 tlie Act while revising the assessment and imposing double duty. It had the power to assess and levy double duty.