# PANNALAL MODI v. SALES TAX OFFICER, RA TLAM AND OTHERS

- **Citation:** [1965] 1 S.C.R. 686
- **Court:** Supreme Court of India
- **Decided:** 1964-10-07
- **Case number:** Civil Appeal No. 249 of 1964
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/pannalal-modi-v-sales-tax-officer-ra-tlam-and-others-3380
- **Pages:** 7

## Headnote

696
DEVILAL MODI, PROPRIETOR, M/S. DALURAM
A
PANNALAL MODI
v.
SALES TAX OFFICER, RA TLAM AND OTHERS
October 7, 1964
(P. B. GAJENDRAGADKAR, C.J., K. N. WANCHOO,
B
M. HIDAYATULLAH, RAGHUBAR DAYAL
AND J. R. MUDHOLKA!l JJ.)
Practice-Principle of constructive res judicata-App/icabU/ty to writ
petitions.
The appellant was a...=ed to sales tax and the order of useMment was
challenged by a writ petition in the High Court. The High Court dismissed the petition and he appealed to the Supreme Court.
At the hearing
of the appeal additional contentions were sought to be raised.
The appeal
was dismissed and the additional contentions were not permitted to be railed.
Thereupon. he filed another writ petition in the High Court railing those
additional contentions and challenging the order of assessment for tlM'
same year.
The High Court dismissed the petition on merit&.
On appeal
to the Supreme Court,
HELD : The appeal should be dismissed as the principle of comtructive
us judicata is applicable in these circumstane<:S. [692 E-F].
Though the courts dealing with questions of infringement of fundamental rights must coru;istently endeavour to sustain them and strike down
their unconstitutional invasion, it would not be right to ignore the principle
of res judicata altogether in dealing with writ petitions. Considerations of
public policy and the basic doctrine that judgments of competent courb are
final and binding as between the parties must receive due consideration.
{691 C-E].
The Ama/11amated Coal Field" Lrd. & Anr. v. The Janapada Sa~loa.
C/1hlndwara, [1963] Supp. 1 S.C.R. 172, explained.

## Text

696
DEVILAL MODI, PROPRIETOR, M/S. DALURAM
A
PANNALAL MODI
v.
SALES TAX OFFICER, RA TLAM AND OTHERS
October 7, 1964
(P. B. GAJENDRAGADKAR, C.J., K. N. WANCHOO,
B
M. HIDAYATULLAH, RAGHUBAR DAYAL
AND J. R. MUDHOLKA!l JJ.)
Practice-Principle of constructive res judicata-App/icabU/ty to writ
petitions.
The appellant was a...=ed to sales tax and the order of useMment was
challenged by a writ petition in the High Court. The High Court dismissed the petition and he appealed to the Supreme Court.
At the hearing
of the appeal additional contentions were sought to be raised.
The appeal
was dismissed and the additional contentions were not permitted to be railed.
Thereupon. he filed another writ petition in the High Court railing those
additional contentions and challenging the order of assessment for tlM'
same year.
The High Court dismissed the petition on merit&.
On appeal
to the Supreme Court,
HELD : The appeal should be dismissed as the principle of comtructive
us judicata is applicable in these circumstane<:S. [692 E-F].
Though the courts dealing with questions of infringement of fundamental rights must coru;istently endeavour to sustain them and strike down
their unconstitutional invasion, it would not be right to ignore the principle
of res judicata altogether in dealing with writ petitions. Considerations of
public policy and the basic doctrine that judgments of competent courb are
final and binding as between the parties must receive due consideration.
{691 C-E].
The Ama/11amated Coal Field" Lrd. & Anr. v. The Janapada Sa~loa.
C/1hlndwara, [1963] Supp. 1 S.C.R. 172, explained.
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 249 of
1964.
Appeal by special leave from the judgment and order dated
April 29, 1963, of the Madhya Pradesh High Court in Misc.
Petition No. 129 of 1963.
U. M. Trivedi, R. C. Koohatta, S. C. Dafrz'a, S. S. Khanduja,
S. K. Manchanda and Ganpat Rai, for the appellant.
B. Sen and /. N. Shroff, for the respondents.
The Judgment of the Court was delivered by
Gajendragadkar CJ. The short question which this appeal
raises for our decision is whether the principle of con~tructive
res j11dicata can be invoked against a writ petition filed by the
appellant Devilal Modi, who is the Proprietor of M/s. Daluram
Pannalal Modi, under Art. 226 of the Constitution.
The appellant has been assessed to sales-lax for the year 1957-58 under
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DEVILAL MODI v. SALES TAX OFFICER (Gajendragadkar C.J.) 687
A the Madhya Bharat Sales Tax Act, 1950.
He challenged the
validity of the said order of assessment by a writ petition filed
by him (No. 114/1961) in the High Court of Madhya Pradesh
on the 25th April, 1961. The High Court dismissed his writ
petition and by special leave, the appellant came to t:ris Court
in appeal against the said decision of the High Court.
On the
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8th March, 1963, the appellant's appeal by special leave was
dismissed by this Court.
Thereafter, the appellant filed the present writ petition in the
same High Court on the 23rd April, 1963 (No. 129/1963).
By. this writ petition the appellant challenges the validity of the
c same order of assessment.
The High Court !\as considered the
merits of the additional grounds urged by the' appellant on this
occasion and has rejected them. In the result, this second writ
petition filed by the appellant has been dismissed by the High
Court on the 29th April, 1963. It is against this decision that
the appellant has come to this Court by special leave; and that
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raises the question as to whether it is open to the appellant to
challenge the validity of · the same order of assessment twice by
two consecutive writ petitions under Art. 226.
It appears that the Madhya Bharat Sales Tax Act, 1950, under
which the impugned order of assessment against the appellant
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ti:> pay sales-tax for the. year 1957-58 has been passed, was repealed by the Madhya Pradesh General Sales Tax Act. 1958
on the 1st April, 1959. It was on the 31st December, 1960 that
a notice was issued to the appellant by the Assistant Commissioner of Sales Tax under the 1958 Act.
This notice recited
that the Assistant Commissioner was satisfied that the appellant's
F 'sales during the period from 1-4-1957 to 31-3-1958 had escaped
assessment and thereby the appellant had rendered himself liable
to be reassessed under s. 19 ( 1) of the Act.
Pursuant to this
notice, fresh assessment proceedings were started against the
appellant in respect of the sales in the year 1957-58, and as a
result of the said proceedings, an order was passed on the 31st
G March, 1961, imposing an additional tax on the appellant to the
extent of Rs. 31,250 for the year in question and a penalty of
Rs. 15,000. It is this order which is the subject-matter of both
the writ petitions.
In his first writ petition, the appellant had substantially raised
two contentions. He had urged that though s. 30 of the Act had
H
made provision for the delegation of the duties of the Commissioner, in fact by his order passed by the Commissioner in pursuance of the said authority, he had delegated to the Assistant
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(1965] I S.C.R.
Commissioner his power under s. 19, but not his duties; and the
said delegation, therefore, made the proceedings taken by the
Assistant Commissioner invalid in law.
The other contention
raised by the appellant against the validity of the said order was
that it was in respect of sales which had been assessed earlier
under the Act of 1950 and the same could not be reassessed
under the subsequent Act.
It is true that the said earlier assessment had been subsequently cancelled by an order made under
>. 39(2} of the Act of 1958; but it was argued that the said
order of cancellation was itself invalid.
Both these contentions
were rejected by this Court, with the result that the appeal preferred by the appellant was dismissed with costs.
It appears that at the hearing of the appeal before this Court,
Mr. Trivedi for the appellant sought to raise two additional
points, but he was not permitted to do so on the ground that
they had not been specified in the writ petition filed before the
High Court and had not been raised at an earlier stage.
While
refusing p~rrnission to Mr. Trivedi to raise the said points, this
Court indicated what these points were.
The first of these two
points was that under s. 19( l) of the 1958 Act only those sales
could be reassessed which were chargeable to tait under that
Act and the sales brought to tax under the impugned order were
in respect of sale of sugar, a commodity the sale of which was
not chargeable under the Act.
The other point was that the
penalty which had been imposed against the appellant by the
impugned order under s. 14 of the Act of 1950 was illegal inasmuch as the said Act had been repealed and the right to impose
a penalty under it had not been saved by the saving section 52
of the 1958 Act.
Sinee this Court had refused pem1ission to
Mr. Trivedi to raise these two additional grounds, it was observed
in the course of the judgment that the Court did. not express any
opinion as to their tenability on the merits.
The present writ petition raises these two contentions and
as we have a.Jready indicated, the High Court has examined them
on the merits and has rejected them.
That is how the question
which arises for our decision is, is it permissible to the appellant
to attack the validity of the same order imposing a sales-tax and
penalty on him for the year 1957-58 by two consecutive wril
petitions ?
In other words, is the principle of constructive res
judicata applicable to writ petitions of this kind or not?
Mr. Trivedi for the appellant has strenuously c::mtended that
"'here a citizen seeks for redress from the High Court by invoking
its high prerogative jurisdiction under Art. 226, it would be
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DEVILAL MODI v. SALES TAX OFFICER (Gajendragadkar C.J.) 689
inappropriate to invoke the prinicple of res judicata against him.
What the appellant contends is that he has been exposed to the
risk of paying a large amount by way of sales-tax and penalty
when the said liability has not been lawfully incurred by him
and the impugned order is contrary to law. It is a case of deprivation of property of the citizen contrary to law, and the High
Court should allow a citizen who feels aggrieved by an illegal
order to challenge the validity of the impugned order even by
a second writ petition as he has sought to do fa the present case.
There can be no doubt that the fundamental rights guaranteed to the citizens are a significant feature of our Constitution
and the High Courts under Art. 226 are bound to protect these
fundamental rights.
There can also be no doubt that if a case
is made out for the exercise of its jurisdiction under Art. 226 in
support of a citizen's fundamental rights, the High Court will
not hesitate to exercise that jurisdiction.
But the question as to
whether a citizen should be allowed to challonge the validity of
the same order by successive petitions under Art. 226, cannot be
answered merely in the light of the significance and importance
of the citizens' fundamental rights.
The general principle underlying the doctrine of res judicata is ultimately based on consider:.•tions of public policy.
One important consideration of public
policy is that the decisions pronounced by courts of competent
jurisdiction should be final, unless they are modified or reversed
by appellate authorities; and the other principle is that no one
,110uld be made to face the same kind of litigation twice over.
because such a process would be contrary to considerations of
fair play and justice, vide : Daryao and Others v. The State of
U.P. & Others. (1).
It may be conceded in favour of Mr. Trivedi that the rule of
constructive res judicata which is pleaded against him m the
present appeal is in a sense a somewhat technical or artificial
rule prescribed by the Code of Civil Procedure.
This rule postulates that if a plea could have been taken by a party in a
proceeding between him and his opponent, he would not be permitted to take that plea against the same party in a subsequent
proceeding which is based on the same cause of action; but basically, even this view is founded on the same considerations of
public policy, because if the doctrine of constructive res judicatn
is not applied to writ proceedings, it would be open to the party
to take one proceeding after :mother and urge new grounds every
(!) 1962] I S.C.R. 574.
/
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(1965) I S.C.R.
time; and that plainly is inconsistent with considerations of public
A
policy to which we have just referred.
In regard to orders of assessment for different years, the
position may be different.
Even if the said orders are passed
under the same provisions of Jaw, it may theoretically be open to
the party to contend that the liability being recurring from year
to year, the cause of action is not the same; and so, even if a
citizen's petition challenging the order of
assessment
passed
against him for one year is rejected, it may be open to him to
challenge a similar assessment order passed for the ne~t year.
In that case, the court may ultimately adopt the same view which
had been adopted on the earlier occasion; but if a new ground
is urged, the court may have to consider it on the merits, because,
strictly, speaking the prinicple of res judicata may not apply to
such a case. That, in fact, is the effect of the decision of this Court
in The Amalgamated Coalfields Lui. ar:d A11r. v. The Jallllpada
Sabha, C11hi11dwara(').
fn that case, this Court had occasion
to consider the question, abOut the applicability of constructive
res judicata to proceedings taken by the appellant, the Amalgamated Coalfields Ltd., challenging the tax levied against it for
different periods.
The petition first filed by it for challenging
the validity of the tax imposed against it for one year was dismissed by t11is Court in The Amalgamated Coalfields Ltd. & Anr.
v. The Janapada Sabha, Chhindwara( 2 ).
At the time when the
appeal of the Amalgamated Coalfields Ltd. was argued before
th.is Court, some new points of law were sought to be raised,
but this Court did not allow them to be raised on the ground
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that they should have been raised at an earlier stage.
When a
similar order was passed against the said Company for a subsequent year, the said additional points were raised by it in its
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petition before the High Court.
The High Court held that it
was not open to the Company to raise those points on the ground
of constructive res judicata; and that brought the Company to
this Court in appeal by special leave.
This Court held that the
High Court was in error in holding t)iat the principle of constructive res judicata precluded the Company from raising the said
points.
Accordingly, the merit~ of the said points were considered and in fact, the said points were upheld.
In dealing with
the question of constructive res j11dicata. this Court observed
that constructive res judicata was an artificial form of res judicata
'nacted by s. 11 of the Code of Civil Procedure and it should
,not be generally applied to writ petitions filed under Art. 32 or
(I) [19631 Supp. I S.C.R. 172.
(2) (1962] I S.C.R. I.
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DEVILAL MODI 1• SALES TAX OFFICER (Gajendragadkar C.J.' <i9 l
A Art. 226.
It was in that connoction that iliii Court also pointed
out that the appeal before the Court was in relation to an assessment levfod for a different year, and that made the doctrine of
res judicata itself inapplicable.
Mt. Trivedi
contends that in
dealing with writ petitions, no distinction should be made between
cases where the impugned order of assessment is in ~ect of
B the same year or for different years; and in support of this contention, he relied on the general observations made by this Court
in The Amalgamated Coalfields Ltd. case('). In our opinion,
the said general observations must be read in the light of the
important fact that the order which was challenged in the second
writ petition was in relation to a different period and not for
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the same period as was covered by the earlier petition.
As we have already mentioned, though the courts dealing
with the questions
of the infringement of fundamental rights
must consistently endeavour to sustain the said rights and should
strike down their unconstitutional invasion, it would not be right
D to ignore the principle of res judicata ·altogether in dealing with
writ petitions filed by citizens alleging the contravention of their
fundamental rights.
Considerations of public policy cannot be
ignored in such cases, and the basic doctrine that judgments pronounced by this Court are binding and must be regarded as final
between the parties in respect of matters covered by them, must
E receive due consideration.
The result of the decision of this Court in the earlier appeal
brought by the appellant be(ore it is clear and unambiguous,
and that is that the appellant had failed to challenge the validity
of the impugned order which had been passed by the Assistant
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Commissioner against him.
In other words, the effect of the
earlier decision of this Court is that the appellant is liable to pay
the tax and penalty imposed on him by the impugned order. It
would, we think, be unreasonable to sugg~t that after this judgment was pronounced by this Court, it should still be open to
the appellant to file a subsequent writ petition before the Madhya
G Pradesh High Court and urge that the said impugned order was
invalid for some additional groundii.
In case the Madhya Pradesh High Court had upheld these contentiops and had given
effect to its decision, its order would have been plainly inconsistent with the earlier decision of this Court, and that would be
inconsistent with the finality which must attach to the decisions of
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this Court as between the parties before it, in respect of the subject-matter directly covered by the said decision.
Considerations
(I) [1963] Supp, I S.C,R. 172.
SUPREMJ:
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[1965) IS.CR.
of public policy and the principle of the finality of judgments arc
important constituents of the rule of law and they cannot be
allowed to be violated just because a citizen contends that his
fundamental rights have been contravened by an impugned order
and wants liberty to agitate the question about its validity by
filing one writ petition after another.
The present proceedings illustrate how a citizen who has been
ordered to pay a tax can postpone the payment of the tax by
prolonging legal procoedings intcm1inably. We have already seen
that in the present case the appellant sought to raise additional
points when he brought his appeal before this Court by special
leave; that is to say, he did not take all the points in the Writ
petition and thought of taking new points in appeal. When leave
was refused to him by this Court to take those points in appeal.
he filed a new petition in the High Court and took those points.
and finding that the High Court had decided against him on
the merits of those points, he has come to this Court; but that is
not all.
At the hearing of .this appeal, he has filed another
petition asking for leave from this Court to take some more
additional points and that shows that if constructive res· judicma
is not applied to such proceedings a party can file as many writ
petitions as he likes and take one or two points every time. That
clearly is opposed to considerations of public policy on which
res j11dicata is based and would mean harassment and hardship
to the opponent.
Besides, if such a course
is allowed to he
adopted, the doctrine of finality of judgments pronounced by
this Court would also be materially affected.
We ar~. therefore.
satisfied that the second writ petition filed hy the appellant in
1 he present case is barred by constructive res j11dimta.
TI1e result is, the appeal fails and is dismissed.
There would.
however, b~ no order as to costs.
Appeal dismissed.
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