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Judgment
Jaganmohan Reddy, J.—These are three plaintiffs'' first appeals being A. S. No. 481 of 1951 in O. S. No. 28 of 1949, A. S. No 295 of 1952 in O. S. No 34 of 1950 and A. S. No. 296 of 1952 in O. S. No. 100 of 1949, against the judgment and decree of the Subordinate Judge, Kurnool dated 22nd February, 1951 in the aforesaid three suits which were tried together by common consent. In O. S. No. 28 of 1949 the plaintiff is Chunilal Lakshmichan Shaha, partner of C L. Shah and Co., purporting to file the suit on behalf of the dissolved firm and in O. S. No. 100 of 1949 and 34 of 1950 and M/s. Kanti Brothers are the plaintiff. All these suits were brought against the State of Madras in respect of the sales tax assessments. It was alleged in O. S. No. 28 of 1949 that a sum of Rs. 16,000/- were collected from the firm by coercion for the year 1945-46 and with respect to O. S. Nos. 100 of 1949 and 34 of 1950 for years 1947-48 and 1946-47, Rs. 37,632-2-9 and Rs. 3,402/- were imposed respectively upon the plaintiffs and while in the former case steps were being taken by the defendant-respondent for the collection of the amount by coercive process, in the latter it was stated that the plaintiffs had paid the sum under protest, though the claim with respect to this was confined to only Rs. 3,400/- in order to avoid payment of heavy court-fee. The plaintiffs alleged in all these three suits that the goods were being sent by railway to places beyond the Province of Madras, the railway receipts, invoices for the goods and the hundis being lodged with the bankers of the firm to be discounted and for collection of the amounts from the buyers with instructions to deliver the receipts to the buyers only on payment of money.
It was, therefore, contended that the ownership of the goods continued to be in the plaintiff firm till the actual payment by the buyers outside the Province where the goods would be transferred to* them. In these circumstances, the plaintiffs averred that the respondent-defendant had no right to impose sales-tax on such transactions and the collections in O. S. No. 28 of 1949 and 34 of 1950 for Rs. 16,000/- and Rs. 3,400/- respectively was illegal and ultra vires and prayed (sic) a decree for the amounts with subsequent inte(sic) and costs while in O. S. No. 100 of 1949 the pl(sic) lift prayed for a declaration that the levy of s(sic) tax was illegal and ultra vires and for orders (sic) training the defendant from collecting the ab(sic) tax.
In all the three suits notices under S.(sic) C. P. C. were issued. The defendant-respondent denied the allegations of the plaintiffs, am(sic) others the allegation that the property in the g(sic) continued in the seller or that the ownership (sic) the goods continued in the plaintiffs till the judgment of the value of the goods, or the trut(sic) the plaintiffs'' assertion that they had a right of (sic)posal of the goods till the payment.
The respondent further contended that i(sic) far as it was aware of the terms of the suit(sic) sections, the sale was complete within the Pro(sic) of Madras, that the order of the Board of Rev(sic) rejecting the plaintiffs'' objection was right(sic) therefore no suit would lie impeaching the correctness of the judgment, and that the suit was n(sic) accordance with the notices given by the plaintiff.
In so far as O. S. No. 28 of 1949 was concerned the defendant took the plea that the (sic) was barred by limitation and that the defendant was not aware of the truth of the allegations the plaintiff was entitled to sue on behalf of the o(sic) firm and with respect to O. S. No. 100 of 194(sic) adequacy of the court-fee paid was also raise (sic).
Except for this difference in the two (sic) three common issues were raised in all the (sic) (1) relating to the suit transactions taking (sic) outside the State of Madras and if so the le(sic) sales-tax being illegal. (2) jurisdiction of the (sic) to try the suits, and (3) the suits being in accordance with the suit notices. The Subordinate (sic) dismissed O. S. No. 28 of 1949 on the ground (sic) il was barred by limitation and with respect (sic) sale being outside the State of Madras h(sic) that the mere fact that the place of delivery shown as Veldurthi or Nandyal or Dronacha(sic) insufficient to hold that the sales were com(sic) at those places when the contracts show that the payment is to be made against R. R. and (sic) he held that those sales were outside the P(sic) in which goods were consigned to the name (sic) plaintiff or of a third party which amour (sic) Rs. 1,09,650-12-0 where the plaintiff was (sic) consignor and the consignee and Rs. 86,06 (sic) where a third party was shown as consign (sic) either that party or the plaintiff is shown (sic) consignee.
In the result his finding was that th(sic) sales outside the province amounted I(sic) 1,95,710-12-0. In O. S. No. 100 of 1949 (sic) that the sales outside the Province were (sic) regard to transactions in which the goods have despatched to ''self'' by the plaintiff prior to 1(sic) and those amounted to Rs. 9,26,775-2-6 (sic) therefore gave a declaration and injunction (sic) respect to the tax of Rs. 9,267-12-0 said (sic) levied thereon.
In respect to despatches after 1-1-1(sic) held that they are gales within the Provi(sic) reason of explanation 2 to sub-s. (4) of S. 2(sic) Madras General Sales Tax Act and he the(sic) necessary to consider whether the plaintiff was entitled to any relief under S. 7 of the Act with regard to sales subsequent to 1-1-1948 where the consignee is not the buyer and where the suit was not filed for any relief under S. 7 of the Act. With respect to O. S. No. 34 of 1950 he held that the (sic)es where the consignor and the consignee himself is shown as the plaintiff amounting to Rs. (sic)458-1-0, (Sic) the plaintiff, was entitled to a decree for Rs. 714-9-0 after the tax payable thereon (sic)h proportionate costs.
The Subordinate Judge further held that (sic) plaintiff had a right to file a suit and therefore (sic) Civil Courts had jurisdiction to determine the questions arising under the Madras General Sales Tax Act. Further he held that the suit in O. S. (sic) 28 of 1949 was not in accordance with the suit (sic)ce while O. S. No. 100 of 1949 and 34 of 1950 (sic)e in conformity with the suit notice. The three (sic)eals as we have already stated, arise out of (sic)e aforesaid respective findings in the above (sic) by the Subordinate Judge.
The respondent-defendant has also filed (sic) appeals against the decision in O. S. No. 34 of 1950 and 106 of 1949 which are A. S. Nos. 993 of 1952 and 994 of 1952 respectively.
Learned advocate for the appellant con-(sic)s that in so far as A. S. No. 481 of 1951 is learned, the plaint is in conformity with the (sic)e and the mere mention of coercion in the (sic)t and the omission of this word in the suit (sic)e which merely stated that the payment was (sic)e under protest cannot render the suit not to (sic)n conformity with the suit notice; that the suit (sic)ot barred by limitation because in computing (sic)period of limitation of six months specified in (sic) 8 of the Madras General Sales Tax Act (hereinafter called the Act) the period of two months (sic) the issue of notice as prescribed by S. 80,(sic) C. should be excluded under S. 15 of the Limitation Act, and alternatively that S. 18of the (sic) does not apply; as such Art. 62 of the Limitation Act would become applicable.
In these appeals learned advocate has (sic)d common questions, namely, that having re-(sic) to the fact that in all cases delivery of the (sic) may receipts was against payment, the property (sic) goods passed to the buyers outside the Pro(sic) of Madras and the sale must be held to be (sic)le the Province; that the assessments for 1946-(sic)nd 1947-48 the subject matter of A. S. Nos. (sic)nd 298 of 1952 respectively were made under (sic)posite order both with respect to sales with-(sic) Province and sales outside the Province, as (sic) these sales cannot be split up and the whole judgment must be held to be bad; and that the (sic)ation to the definition of sale is ultra vires (sic)ate Legislature and in so far as A. S. No. 296, (sic)52 is concerned the assessment would be (sic)ive on that ground.
With respect to the first point, namely, (sic) it in O. S. No. 28 of 1949 is not in confor-(sic) with the suit notice, it is necessary to adverb (sic) relevant allegations in the suit notice and (sic)aint to determine what the allegations were (sic)94 is the suit notice dated.10-9-1947 given (sic)iri Bheem Rao, Advocate, Kurnool, to the (sic)ry to the Government of Madras, and District Collector, Kurnool, on behalf of M/s. C. L. Shah and Co.; under S. 80. C. P. C. In that notice after setting out that his clients deal in groundnut oil, it was stated that the sale of the goods sold by them, according to the terms of the contract, the intention of the parties and the law applicable to the course of the dealing adopted by his clients, was completed outside the Presidency to the buyers who got title only after payment of the value of the goods and therefore not liable to sales tax under the Act.
The notice further alleged that the plaintiff had to pay Rs. 16,208-14-2 as sales tax for the period 1944-45 under protest, and that that levy of tax was ultra vires and illegal and unjust and. therefore, called upon the Government to refund the sum, failing which the plaintiff would institute a suit for its refund. In sub-para (2) of paragraph 2 of the plaint, the plaintiff alleged that a sales tax amount of. Rs. 16,000/- for the period 1945-46 was disallowed by the Board of Revenue and that this tax was collected from the plaintiff under coercion by the Deputy Commercial Tax Officer, Kurnool without holding proper enquiry.
In paragraph 5 the plaintiff stated that the cause of action for the suit arose on the date of the order by the Board of Revenue refusing to refund the sales tax and on the date when the tax was collected from them. In paragraph 6 relating to jurisdiction of the Court it was stated that the tax was collected illegally by the Dy. Commercial Tax Officer, Kurnool. It is clear from the plaint averments that the cause of action is alleged to be the collection of the tax illegally by the Dy. Commercial Tax Officer and the refusal to refund it by the State of Madras.
The suit notice clearly states that the plaintiff was not liable for sales-tax under the Madras General Sales Tax Act, that the levy was ultra vires, illegal and unjust and in effect states that it was illegal and that it was paid under protest. S. 80, C. P. C. provides that no suit shall be instituted against the Government or against a public officer in respect of any act done or purporting to be done by such public officer in his official capacity until the expiration of two months next after notice in writing has been delivered to or left at the office of the persons specified therein suiting the cause of action, the name, description and place of residence of the plaintiff and the relief which he claims and the plaint shall contain a statement that Such notice has been so delivered.
As we have observed the cause of action set out in the suit notice and the plaint with respect to which objection has been taken by the Subordinate Judge as not being in conformity with one another has been clearly stated in both to be the illegal levy and collection of tax and the relief which the plaintiff claims both in the suit notice and the plaint is the refund thereof.
The main requirements of the Section having been complied with, it does not make the suit defective because of the different words used by the plaintiff to describe the manner or the circumstances under which tax was paid by him or collected from him in the suit notice and in the plaint. All that S. 80, C. P. C. requires is that there should be a substantial compliance in the suit notice with respect to the matters specified in the section.
If authority is necessary we may refer to the case of Secretary of State v. Perumal Pillai, ILR 24 Mad 279 (A), where a Bench consisting of Subrahmania Ayyar and Benson, JJ. following the case of Jones v. Bird, (1822) 5 B & Ald 837 (B), held that the cause of action in the section should not be taken in a narrow sense, the object of the section being merely to inform the defendant substantially of the ground of complaint. In Jehangir v. Secretary of State, ILR 27 Bom 189 (C), it was observed that
these notices'' must not be too strictly or too narrowly construed. They must not be construed as if they were pleadings and that they need not set our all the details and facts of the case which the plaintiff intends to prove and that the notice must be considered sufficient if it substantially fulfils its object in informing the parties concerned generally of the nature of the suit intended to be filed.
There are several decisions on this point which we find it unnecessary to refer. No doubt the Privy Council in AIR 1927 176 (Privy Council) did observe at page 747 (of ILR Bom): (at pp. 184-185 of AIR), that S. 80 is express, explicit and mandatory, & it admits of no implications or exceptions. But these observations must be construed in the light of the facts of that case where the suit was filed within two months from the date of the suit notice against the specific inhibition in the section.
The mandatory or explicit provisions are with respect to the matter to be specified in the notice, namely, the cause of action, address and the relief claimed. Learned Advocate for the Government, Shri Venkatesam, did not seriously contest this point and in the view we have taken the suit is not defective for non-compliance of the provisions of S. 80, C. P. C.
In so far as the question of limitation is concerned, it is necessary to state that the suit notice was issued on 10-9-1947 for the refund of the amount alleged to be illegally collected after the dismissal of the plaintiffs appeal under S. 11 of the Sales Tax Act on 14-5-1947. A revision was filed before the Board of Revenue which by its order dated 4-3-1948 (Ex. B-95) dismissed it. It does not appear that this order was served on the plaintiff, but as the learned Subordinate Judge has stated it was prepared on 12-3-?948 for being forwarded to the plaintiff and since he has produced it on 16-1-1951, it would have been served in the ordinary course by 15-3-1948. The date when the tax was collected is not evident, but even putting it at the latest, it must have been collected by 10-9-1947 which is the date of the suit notice in which it was categorically stated that tax was collected. Learned Advocate for the appellants contends that the suit in O. S. No. 28 of 1949 is within time from 15-3-1948 as it was filed within six months from this date as provided under S. 18 after deducting two months allowed for suit notice under S. 15(2) of the Limitation Act, i.e., it is within 8 months from the date of revision petition which fixes the last day of the filing of the suit either on 4-11-1948 or at the latest by 15-11-1948.
He further contends that S. 18 of the Act does not apply to suits for illegal levy, assessment and collection of taxes, as the period of limitation is (sic) that prescribed under S. 18 of the Act, but under S. 62 of the Limitation Act.
Under Sec. 18 of the Act a suit with respect to any act done or purporting to be done under the Act must be filed within six months from the act: complained of. The section is in the following terms:
No suit shall be instituted against the Government and no suit, prosecution or other proceeding shall be instituted against any officer or servant of the State Government in respect of any (sic) done or purporting to be done under this Act, under the suit, prosecution or other proceedings is in(sic)tuted within six months from the date of the (sic) complained of.
The act complained of, according to the Subordinate Judge, is the illegal collection of the tax (sic) 8 months would terminate on 10th May, 1948 (sic) consequently the suit will be barred By limitation. Learned Advocate, however, contends that if S(sic) of the. Act is applicable to such suits, 8 months (sic) be reckoned from the date of the Revision and Subordinate Judge was wrong in relying upon decision of Chinnamalachi v. Saminatha Ma(sic) rayan, ILR 30 Mad 367 (E), where it was held the period of six months, under S. 59 of Madras Act 2 of 1864 must be calculated from the (sic) when the Collector on revision under Regulati(sic) of 1826 passed his final order, because the (sic) upon which reliance had been placed has (sic) overruled by a Full Bench in B. Venkata Narasi(sic) charyulu v. Secy, of State, ILR 1942 Mad 264: (sic) 1941 Mad 933) (F). In the Full Bench it was (sic) that the period of six months allowed for a s(sic) set aside the sale under S. 59 must be calcu(sic) from the date when the Collector on revision (sic) S. 3 of the Madras Regulation 7 of 1828 passed (sic) final order and not from the date when the s(sic) confirmed under S. 38 by the Deputy Coll(sic) The cases of Baijnath Sahai v. Ramgut Singh, 23 Cal 775 (PC) (G) & Muthu Korakki Chetti v. (sic) Madar Aramal, ILR 43 Mad 185: (AIR 1920 (sic) (1) (FB) (H), were also cited by the learned Advocate in support of the aforesaid proposition, (sic) is not necessary for us to refer to these cases b(sic) even if the contention of the learned advocate accepted as correct on the assumption that S. (sic) applied to suits of this nature, the six months (sic) can only be reckoned from the date when the (sic)sion was dismissed, viz., from 4-3-1948 or 15-(sic) as the case may be, in which case he cannot (sic) the benefit of the period of two months sp(sic) in S. 80, C. P. C. with respect to a notice (sic) prior to the dismissal of the revision. Under (sic) C. P. C. issue of a suit notice pre-suppos(sic) accrual of a cause of action and if, as it is intended, the cause of action only arose on the (sic) of the dismissal of the revision, the suit notice (sic) cannot be considered to be validly issued under S. 80, C.P.C. If this is so, cl. (2) of S. 15 (sic) Limitation Act which provides for the exclu(sic) the period of notice to be given in accordance the requirements of any statute in force dur(sic) period of limitation prescribed for a suit, (sic) be of any assistance. The contention of the (sic)ed advocate on any view of the matter (sic) aspect of the case is without force.
The next contention of the learned Advocate not only deals with the question of jurisdiction of Civil Courts to try suits with respect to recovery of tax but also determines whether Art, 62 of Limitation Act would apply, because if S. 18, as contended by him, is confined only to suits for compensation or damages against the State Government with respect to acts done or purporting to be done by them under that Act, the Court has not only jurisdiction to entertain suits relating to the levy, imposition and collection of tax but also Art. 62 would apply prescribing three years as the period of limitation for the recovery of tax. A case similar to the one we are considering arose (sic) decision by Panchapakesa Ayyar, J., in The State of Madras Vs. A.M.N.A. Abdul Kader Tharaganar Firm, The point for consideration in that case was whether in a suit for the recovery of Rs. 900/- said to have been collected legally from the plaintiff as sales tax by the defendants, State of Madras, the suit would become (sic)rred by limitation in six months under S. 18 of the Act or at least within a year under Art. 16 of the Limitation Act or whether Art. 62 of the Limitation Act giving 3 years will apply. The tax in that case was collected from the plaintiff on 27-5-(sic)16 and the suit was filed only on 10-1-48 so that (sic)18 of the Act or Art. 16 of the Limitation Act applied the suit would be barred by limitation. The learned Judge after referring to the Full Bench Division in The Panchayat Board Vs. The Western India Matches Company by Agent Henrik Hybbidnettee, and that in the Pro(sic) of The Province of Madras Vs. Chekka Satyanarayanamurthy, held that (sic) the analogy of the language of S. 225 of the Madras. Local Boards Act (14 of 1920) as amended by Act 11 of 1930, which contained more or less same provision and wording as S. 18 of the (sic) the latter section was limited to suits for compensation and damages and so inapplicable to cases (sic) taxes illegally collected, nor has Art 16 of the Limitation Act any application to such a case where (sic) was merely recovered as arrears of land revenue and the claim was not made by the revenue authorities on account of arrears of revenue or on (sic)nt of demand recoverable as such arrears particularly where the tax had been paid within the (sic)ys prescribed and had not become a tax liable (sic) recovered as arrears of land revenue. In the result Art. 62 was applied. With respect we (sic) with this view of the learned Judge. Leach, (sic) delivered the judgment of the Full Bench i The Panchayat Board Vs. The Western India Matches Company by Agent Henrik Hybbidnettee, after examining S. 156 of the Madras Local (sic)s Act of 1884 which corresponded to S. 225 (sic) Madras Local Boards Act of 1920, the (sic)lment in 1900 of S. 156 and the amendment (sic)30 of S. 225 and the various decisions on the (sic) said section, held that S. 225 of the Madras (sic) Boards Act is limited to suits for compensation for damages. S. 156 of 1884 prohibited any (sic) from being brought against any local board (sic) an account of anything done or purporting to (sic)e under the Act the language of which is (sic) to S. 18 of the Act. It is not necessary (sic) to traverse the same ground as that covered (sic)e Full Bench judgment except to say that (sic) regard to the long line of decisions upon (sic)alogous provisions of S. 225 of the Madras
Local Boards Act, the provisions of S. 18 are also limited to suits for compensation or damages and do not apply to cases relating to the imposition, levy or collection of sales tax illegally. Learned Advocate for the Government did not contest this proposition having regard to the aforesaid decisions. If S. 18 is not applicable to such suits the question is whether having regard to the provisions of the Act is the jurisdiction of the ordinary Civil Courts ousted or should remedy be found under the Act? This point was also considered by a Bench of the Madras High Court in 1951 2 Mad LJ 340: The Province of Madras Vs. Chekka Satyanarayanamurthy, ), and after discussing'' the relevant cases on this point it was held that the Act with its subsequent amendments had not ousted the jurisdiction of the ordinary Courts. There can be no doubt that an assessee who is called on to pay a tax has a right to seek his remedy in a Court of law by challenging the legality of that order. This he is entitled to do unless that right has been barred or taken away statutorily. The fact that there is under the taxing statute a right of appeal or revision against assessments is not by itself sufficient to take away the right of the assessee to have recourse to a Court of law. Having regard to the fact that Civil Courts have jurisdiction to entertain such suits and also the fact that S. 18 of the Act does not apply to such suits, the only Article that is applicable is Art. 62 of the Limitation Act which prescribes three years. We, therefore, hold that the suit O. S. 28 of 49 is within time.
The next point that has been urged in these appeals is that having regard to the nature of the transactions and the fact that in all cases the railway receipt was handed over to the buyer only against payment through a bank outside the Province, the sale should be held to have been effected outside the Province where the railway receipt has been delivered and hence no liability attaches for levy of tax under the Act.
The documentary evidence in this case consists of contracts and other papers relating to contracts, railway receipts, invoices, demand drafts, etc., the genuineness of which has not been questioned by the respondent. On the basis of the documents produced consolidated statements of the course of transactions were prepared and have been treated as evidence with the consent of the respondents counsel without admitting the legal effect of the transactions as disclosed by these statements.
The oral evidence of P. W. 1 Vardhaman and P. W. 3 Hemchand Devchand, the sole proprietor of Kanti Bros., was recorded in the suits and the depositions of K. Jagannadharao, employee examined as 6th witness and T. Harirao, Station Master, examined as 2nd witness, of the plaintiff in O. S. 14/50, were marked by consent as Exts. A-96 and A-85 respectively and treated as evidence in the suits. The statement A-93 is one where the plaintiff is the consignor and the consignee. The goods are despatched from Kurnool, Dronachalam Veldurthi, Dhone, Gutti, Salt Kotars, and Tadiparti.
This exhibit also shows the position of the seller consignor and buyer consignee. Stations from which the goods were despatched are admitted to be within the State of Madras, The third state ment discloses the position where the buyer is the consignor and also the consignee and the fourth statement shows the plaintiff as consignor and buyer as consignee. Ex. A-92 series are statements of goods sold and documents sent for collection through the Central Bank of India Ltd., and the Imperial Bank of India Ltd., from 1-4-1945 to March, 1946 for a whole year and the verification at the foot of each statement by the bank would show that all relative railway receipts were delivered to the parties concerned after payment only at the destination.
Ex. A-25 is the statement which shows the buyer as consignor and consignee. The millers in each case have despatched the goods from stations within the State. All the contracts produced, that is, A-25, A-20, A-22, A-6, A-23 and A-38, etc., show that the places of delivery is F. O. R. Kurnool or places within the Kurnool District and that the terms and conditions of payment are that R. R. should be sent through the bank for payment.
In so far as the cause of transactions is concerned, there is no dispute on the evidence between the appellants and the respondent. The facts that have been held proved and which are admitted by both sides are that oil was purchased from the millers as well as merchants at Kurnool by the appellants for ready delivery. The delivery was F. O. R. at Kurnool or some other railway station in Kurnool District.
The mode of transport is through the common carrier and payment was against Railway receipt at the place of destination through the Bank. The railway receipts disclose four types of transactions, (1) where the seller is the consignor and the consignee, (2) where the seller is the consignor and the buyer consignee, (3) where the buyer is the consignor and the consignee, and (4) where the miller is the consignor and the plaintiff is the consignee.
It is now necessary to see from the course of business set out above where the sale has taken place whether in the province of Madras or outside. Sale with all its grammatical variations and cognate expressions has been defined in S. 2(h) of the Act to mean every transfer of property in goods by one person to another in the course of trade or business for cash or for deferred payment or other valuable considerations. The question therefore is where and when the property in the goods passed to the buyer.
This will be determined under the Indian Sale of Goods Act. Under sub-s. (2) of S. 23 of the Sale of Goods Act where in pursuance of a contract a seller delivered the goods to the buyer or a carrier or other bailee (whether named buyer or not) for the purpose of transmission to the buyer and does not reserve the right of disposal he is deemed to have unconditionally appropriated the goods to the contract, and according to sub-s. (3) of S. 19 unless a different intention appears the rules contained in Ss. 20 to 24 are rules for ascertaining the intention of the parties as to the time at which the property in the goods is to pass to the buyer.
Section 23 therefore is subject to the intention the parties, and ordinarily the appropriation of the goods as specified in S. 23 (2) of the Sale of Goods Act will pass the property in the goods to the buyer. But notwithstanding the delivery to the carrier or other bailee for the purpose of transmission to the buyer if the intention appears otherwise the property in the goods may not pass to the buyer until the conditions imposed by the seller and fulfilled such as envisaged under S. 25 of the said Act, wherein a contract for sale of specific goods or where the goods are subsequently appropriate to the contract the seller may by the terms of the contract or appropriations reserve the right of disposal of goods until certain conditions are fulfilled.
Where the contract is F. O. R. contract delivery of goods to the railway passes the risk to the buyer; and ordinarily delivery of the goods to (sic) buyer and passing the risk in respect of the goods from the seller to the buyer are strong indication of the passing of the property in the goods to the buyer but these are not conclusive and may (sic) negatived by the seller reserving to himself (sic) right of disposal as under S. 25 until fulfilment (sic) certain conditions thereby preventing the passing of the property in the goods from him to the buyer.
Prima facie therefore the property passes to the buyer upon the goods being delivered to (sic) railway or the common carrier. But that inference may be rebutted. For instance where he deals was the railway receipt in such a way as to show (sic) he did not intend to part with the goods until payment in cash. Again the mere fact that payment is to be made against the delivery of R. R. in(sic) F. O. R. contract is not conclusive of the fact the property in the goods has not passed to the buyer on the seller, delivering the goods to the (sic) way.
It is now necessary to see what the contention of the seller was with respect to the pa(sic) of the property to the buyer. The contention (sic) the learned advocate for the appellants is that (sic) sellers clearly manifested their intention no(sic) pass the property in the goods in Madras Property but only outside when they stipulated with the buyer that the Railway receipt was only t(sic) delivered against payment of the buyer. Chag(sic) (as he then was) in Dinkerrai Lalit Kumar v. (sic)dayal Bambilas, 48 Bom LR 821 at p. 824: 1947 Bom 293 at p. 295) (L), repelled a s(sic) contention raised thus:
We do not agree with Mr. Setalwad that expression R/R through bank merely deals with the mode of payment. This provision has g(sic) be taken into consideration with all the othe(sic)visions in the contract in order to arrive at (sic) conclusion as to whether under the contract (sic) were to be delivered at Calcutta or at the (sic) places mentioned in the contract.
From the admitted evidence in the(sic) it is clear that in two cases, namely, where (sic) seller is consignor and consignee, and (b) the (sic) is consignor and plaintiff consignee, there was(sic) sale within the Province of Madras by the plaintiffs. The property in the goods under the transaction only passed to the buyer, outside (sic) Province on the delivery of R. R. against pa(sic) In transactions where the buyer is consign (sic) consignee it is equally clear that the sale(sic) already taken place within the State before (sic)buyer could transport the goods.
This conclusion is sought to be rebutted by stating that there was a permit system prevailing requiring the permit holder alone to transport the goods from the Province and where the permit was given to the plaintiff only on condition that the sale should be to a particular Vanaspathi factory (sic)e consignee was being shown as the buyer. It (sic) clear on the admission of P. W. 1 that goods had to be booked by the buyer within the province and he was the person entitled to despatch the goods; as such the property in the goods has passed to. him before despatch.
In the case where the consignor is the seller (sic)d the consignee is the buyer also we must hold (sic)e seller, upon whom the burden of showing a different intention is cast which burden he has not discharged, to have despatched the goods and that the sale took place within the State. The plaintiff produced in evidence EXS. A-3, A-3 (a), A-4 d A-4 (a) being letters written by the buyer and (sic) sellers'' representative to show that even though compensation for loss of goods in transit was paid (sic) the buyer he made over the monies to the seller (sic) the seller was the owner.
In the first place the correspondence was in (sic) April, 1947 about 5 months before the suit notice (sic)en the assessment had either taken place or was (sic)ng made or at any rate it does not show why (sic)se letters had to be written; in the second place (sic) interpretation, put by the buyer is not conclusion (sic) as to where the sale took place or property in (sic) goods passed. We may here refer to the observations in M. Siddique and Co. v. Mysore Textiles (sic)neies, 1947 1 Mad LJ 249: (AIR 1947 Mad (sic)) (M), by a Bench consisting of Wadsworth, (sic)C. J. and Rajamannar, J., as he then was, which (sic)s up the legal position thus : at page 251 (of (sic) LJ): (at p. 456 of AIR):
Having regard to the terms of S. 23 (2) of (sic) Act, it must, we think, be held that the sale (sic)d be completed by the delivery of the goods (sic) the -railway for the purpose of transmitting (sic) to the buyer, provided'' that the seller did not (sic)ve the right of disposal. Translating this into (sic) terms of ordinary commerce, if the seller delivered the goods to the railway for conveyance to (sic)" at Calcutta, there would not be such an appropriation as would pass title to the purchaser.
In order to complete the transaction it would (sic) necessary to endorse the railway receipt and (sic)er it to the buyer. If, on the other hand (sic) this consignment was booked at the railway (sic) in in Cochin State the railway receipt was (sic) out to the buyer, this would become a docu(sic) of title vesting in the buyer alone the right (sic) ownership in the goods while in transit. The (sic) fact that the document of title was retained (sic)e custody of the seller, though it might give (sic) some equitable lien over the goods, would (sic)revent the title from passing to the buyer.
Having regard to what has been stated (sic) we hold that where the consignor and con-(sic) is the seller and the consignor is miller and (sic)mee plaintiff, the sales took place outside (sic) sales tax is leviable on those transactions (sic)n the other two cases where the consignor (sic)ler and consignee buyer and where the con-(sic) and consignor is buyer the sales took place
inside the province and are liable to sales-tax under the Act.
Two other points raised by the learned advocate Mr. Srinivasa Rao for the appellants remain to be considered. The first one of those is that the assessment being a composite one dealing with transactions which are taxable and those that are not taxable in each of A. S. 295 and 296 of 1952 it cannot be split up and the whole thing is said to be infected and must be held to be invalid. In support of this contention a judgment of the Supreme Court in Ramnarain Sons Ltd. v. Assistant Commissioner of Sales Tax, (S) AIR 1955 SG 765(N), is cited. There an assessment was made by the respondent which included in the composite order an assessment for pre-constitution and post-constitution period.
The pre-constitution and post-constitution assessment being field invalid the whole order was held invalid. In so far as this ease is concerned, learned advocate for the respondent sought to distinguish it on the ground that the remedy sought in the High Court by the assessee was by way of a writ under Art. 226 of the Constitution, and as it will not, by the nature of the remedy sought in a writ proceedings, be practicable to separate legal from the illegal assessment, he contends that the whole assessment was held to be invalid.
Further he urges that the learned Advocate General, Madhya Pradesh, did not seriously contest the position that that assessment which was bad in part was infected throughout and consequently the decision is not an authority for the proposition that where in a suit it is possible to separate from the composite order on the basis of evidence the taxable and non-taxable items, the order is bad. There is no doubt that the nature of the remedy sought in the three appeals before their Lordships was by way of a writ under Art. 226 and on a petition, under Art. 32 of the Constitution. It is, therefore, necessary to examine the decision of the Supreme-Court with particular regard to the facts in that ease.
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The appellants entered into an agreement with several nulls to buy as their agents on their account and on their behalf kapas in various markets of Madhya Pradesh and in this capacity they so worked from 1-10-49 to 30-9-1950. The Sales Tax Authorities included the kapas transactions in the appellants'' turnover and ordered them to pay sales tax on the said transactions. It. was held that in so far as the post-constitution transactions were concerned they were bad as the ban imposed under Art. 286 (1) (a) and the explanation thereto could not be removed by the President''s order.
It was further held in the petition under Art. 32 that apart from the invalidity on the above ground, the assessment was also bad by reason of the transactions being of inter-State nature, and also for the reason that the sale had taken place in Uttar Pradesh. It was upon this basis that the composite orders were deemed to be invalid, The contention of the learned advocate for the respondent on a prima facie reading of the decision in Appeals Nos. 132,133 & 137 of 1955 dealt first by the judgment of Bhagawati, J. would appear to support him in the contention that since the remedy sought for was by way of a writ the assessment could not be split; but this argument does not best closer scrutiny. Their Lordships relying on the judgment of the Privy Council in Bennett & White (Calgary) Ltd. v. Municipal District of Sugar City, (1951) AC 786 (O), observed at page 790 as follows:
There is authority for the proposition that when an assessment consists of a single undivided sum in respect of the totality of the property treated as assessable the wrongful inclusion in it of certain items of property which by virtue of a provision of law were expressly exempted from taxation renders the assessment invalid in toto.
The decision upon which their Lordships relied was not one where in a writ the composite order of assessment was held invalid. It was, as in the instant case, one where after the remedies permitted to the assessee under the taxing Acts he questioned the legality of the assessment in a suit in civil courts. In that case also a question was urged that where a remedy was given by way of appeal no right of suit exists or that civil Courts have no jurisdiction. This argument was negatived after examining several authorities, the effect of which was stated in these words at pages 808-809:
In their Lordships'' judgment the effect of these authorises is that a tax payer called on to pay a tax in respect of certain property has a right to submit to the ordinary Courts the question whether he is taxable in respect of that property unless his right to do so has been clearly and validly taken away by some enactment, and that the fact that the statute which authorises assessment allows an appeal or a series of appeals against assessments to other tribunals is not sufficient to deprive the tax-payer of that right.
In the above Privy Council case which was from Canada three motor vehicles of the type called ''Dumptors'' under an agreement with the assessee deemed to be the property of the Crown were included in the assessee''s property and assessed. As their Lordships pointed out they were not an insignificant component of the total subject-matter of the assessment and they expressed the view that the course of action adopted by the Supreme Court of Canada in holding the assessee entitled to a declaration that the assessment and taxation of all personal property in question........except the dumptors were properly made and imposed was not warranted. In other words, the deletion of the three dumptor items and approving the assessment subject to this deletion was disapproved and it was dealing with this aspect they observed at page 816:
...When an assessments not for an entire sum, but for separate sums, dissected and earmarked each of them to a separate assessable item, a Court can sever the items and cut out one or mere along with the sum attributed to it, while affirming the residue. But where the assessment consists of the single undivided sum in respect of the totality of property treated as assessable, & when one component (not admissible as ''do minimis'') is on any view not assessable and wrongly included, it would seem clear that such a procedure is barred, and the assessment is bad wholly.
The observations of Anglih, C. J. in Montreal Light, Heat & Power Consolidated v. City of West Mount, (1926) SCR (Can) 515 (P), were also referred to with approval by Supreme Court and relied upon. The above principle of law was held to apply not only to the appeals arising out of the Writ Petitions under Art. 226, but also in the assessment the subject-matter of the petition under Art. 32 where the sales outside the States, namely, Kanpur, Bombay, Lucknow and Faizabad, were separately shown as item (d) was held to have been completed in Uttar Pradesh and the turnover could not be taxed by the State of Madhya Pradesh. With respect to said item also which could easily be separated even where the remedy was sought by way of (sic) writ Bhagawati, J., said at page 773 that
the assessment, moreover, is a composite on covering the pre-constitution period as well. The case therefore falls within our judgment in Civil Appeals Nos. 132, 133 and 137 of 1955 just delivered.
Following this reasoning the assessment order was set aside. In the circumstances set out above in our view, the matter can no longer be said (sic) be res integra and we are bound by the decision of the Supreme Court.
The last point argued on behalf of the appellants relates to appeal No. 296 of 1952 pertaining to the assessment for the year 1947-48. In the view we have taken above, we find it unnecessary to decide this paint. Suffice it merely to (sic) out the contention of the learned advocate challenging the legislative competence of the Madras Legislature to enact and the validity of explanation (sic) to S.2 (1) of the Act. Explanation (2) which (sic) added by Cl. (b) of sub-s. (1) of S. 2 of the Madras General Sales Tax (Amendment) Act 25 of 19 (sic) came into force on 1-1-1948 and is in the following terms:
Notwithstanding anything to the contrary (sic) the Indian Sale of Goods Act, 1930, the sale (sic) purchase of any goods shall be deemed, for (sic) purposes of this Act, to have taken place in (sic) State, wherever the contract of sale or purch(sic) might have been made....
(a) If the goods were actually in this S(sic) at the time when the contract of sale or purc(sic) in respect thereof was made, or
(b) in case the contract for the sale or (sic) chase of future goods by description, then, if (sic) goods are actually produced in this State at (sic) time after the contract of sale or purchase in (sic) respect thereof was made.
The submission of the learned counsel for the appellant was that in effect the explanation enables sales tax to be levied not on sale of g(sic) but only on contracts of sale by reason of the g(sic) being in the State, that it is ultra vires the Ma(sic) Legislature to enact the statute having an e(sic) territorial operation, that this Provision is repug(sic) to the provisions of the Sale of Goods Act and therefore should not prevail as the previous san(sic) of the Governor-General was not obtained for (sic) acting the amendment introduced in 1947.
This is the very contention raised before (sic) benches, one of the Madras High Court in Louis Dreyfus and Co. Ltd., Madras Vs. State of Madras, the other in Pari Kameswara Rao v. State of Madras 1955 AP LT (Civ) 168: ((S) AIR 1955 A(sic) 129) (R). Both these decisions proceed on assumption of the finality of the decision Poppatlal Shah Vs. The State of Madras, and the The State of Bombay and Another Vs. The United Motors (India) Ltd. and Others,
It was held in these cases that any of the ele-(sic)nts which constitute a sale would go to established (sic) sufficient nexus with the territory to justify the (sic) position of a tax, that the provision of the impugned explanation is not repugnant to the provisions of the Indian Sale of Goods Act, each being (sic)cted under distinct legislative items in the State (sic) concurrent lists dealing with different subjects (sic) traceable to one another and hence the assent (sic) the Governor-General was not necessary. It is contended by the learned counsel for (sic) appellant that having regard to certain observations of their Lordships of the Supreme Court (sic)heir latest judgment in Bengal Immunity Co. (sic) v. State of Bihar, 1955 AP WR 422 at p. 457: (sic)R 1955 SC 661 at pp. 691-692) (U), we must (sic) that the above bench judgments are no longer (sic) law. As we have already observed, in the (sic)r we have taken, it is not necessary to deter-(sic) these questions and in any case we under-(sic) that the case decided by this Court is pend-(sic) appeal before the Supreme Court which would (sic)ly determine the question raised before us. (22) In the result appeal A. S. No. 481 of (sic)is allowed partly to the extent of refund (sic)tax on the turnover of Rs. 1,95,710-12-0 (sic)g sales outside the Province. There will be a (sic)e for the refund of the tax on the above (sic)ver with proportionate costs here and in the (sic) below. Appeals Nos. 295 and 296 of 1952 (sic) be allowed with costs throughout. In A. S. (sic) of 1952 there will be a decree for declaration (sic) injunction as prayed for with respect to Rs. (sic)2-2-9 being tax sought to be collected. In (sic) No. 295 of 1952 there will be a decree for (sic),400/-. Appeals of the State Nos. 993 "and (sic)of 1952 are dismissed with costs.
These appeals having been set down on (sic)y 11th day of January, 19J57 for being men-(sic) on the letter of the advocate and no orders (sic)g been passed on that day and having been (sic)own tins day again for being mentioned, the (sic) made the following order :) (sic)A RAO, C. J.:
These appeals are posted for being men-(sic) on the ground that there are certain rais(sic) in the judgment. In appeals Nos. 295 of (sic) and 481 of 1951, learned Counsel points out (sic)O interest was awarded to him from the date (sic) plaint till date of payment. The omission in (sic) judgment, in our view, is due to oversight. We, (sic)re, amend the judgment and give the ap(sic)t interest at 6 per cent, per annum from date (sic)int till date of payment.
Another point is raised in Appeal No. 481 (sic)il. It is said that by the same parity of rea-(sic) we adopted in the connected appeals, we (sic) have allowed this appeal also in full. This (sic)sly cannot be decided at this stage. The (sic)int, if advised may take out an application (sic)iew of the judgment.
In A. S. No. 296 of 1952, it is contend-(sic)t we should, in exercise of our discretion, (sic)e appellant advocate''s fee not on the amount at which the plaint was valued for jurisdictional purposes but on the amount in respect of which the declaration was asked for. We do not think there are any extra-ordinary circumstances in this case to exercise our discretion in the manner indicated by the learned counsel. We order accordingly.