(1.) THIS appeal is directed against a reversing order of the lower appeal Court by which it set aside an order of the Court of first instance dismissing the suit on the ground that it was barred by section 37 of the Madhya Pradesh General Sales Tax Act, 1958 (hereinafter called the Act) and remanded the suit for disposal according to law.
(2.) THE material facts are these. THE plaintiff is a dealer registered under the provisions of the Act. He had to pay for the period 1 November 1959 to 20 October 1960 a sum of Rs. 7, 615 as sales tax and he paid the amount in smaller sums into the State Bank which issued chalans in triplicate. One of these chalans, No. 306 dated 25 April 1960, related to a payment of Rs. 2, 382. 62. By a notice of demand dated 23 April 1964 issued under section 22 (4) (a) of the Act, the plaintiff was required to pay within 30 days a sum of Rs. 2, 300 on the ground that, upon verification from the Treasury, it was found that, only Rs. 82. 62 was deposited under the aforesaid chalan No. 306 dated 25 April 1960 and he was also intimated that, if he failed so to do, it would be recovered from him as arrears of land revenue. In his reply to the notice, the plaintiff stated that he had paid the full amount of Rs. 2, 382. 62 and he was not responsible if the Treasury records were not properly maintained. THEreupon, proceedings for recovery of Rs. 2, 300 as arrears of land revenue were initiated and a notice under section 146 of the Madhya Pradesh Land Revenue Code, 1959, was served upon the plaintiff who, in response thereto, reiterated his objection to recovery of the amount from him. Even so, without passing any order on his objection, the revenue authorities issued a warrant and attached from his possession certain movables. Following this, the plaintiff served the required statutory notice under section 80 of the Code of Civil Procedure and filed the suit for a permanent injunction to restrain the authorities from recovering the same dues once again.
The defendants resisted the claim inter alia on the ground that the suit was barred by section 37 of the Act. As already indicated, the Court of first instance accepted that contention but the lower appeal Court took a contrary view.
Section 37 of the Act, which has been relied upon as barring a suit of this kind, reads:
"Save as provided in section 44, no assessment order or the determination of liability to pay any tax or penalty or the recovery of any tax or penalty made under this Act or the rules made thereunder by the Commissioner or any person appointed under section 3 to assist him shall be called into question in any civil Court and save as provided in sections 38 and 39, no appeal or application for revision shall lie against any such assessment or order".
(3.) SECTION 9 of the Code of Civil Procedure provides that civil Courts have jurisdiction to try all suits of a civil nature except those of which cognizance is either expressly or by necessary implication barred. Exclusion of the jurisdiction of civil Courts is not to be readily inferred and it is now firmly established that a party seeking to oust the jurisdiction of an ordinary civil Court in regard to any class of suits has to show that the Court is not competent to try them: Sri Vedagiri Lakshmi Narasimha Swami Temple v. Induru Pattabbirami Reddi (AIR l967 SC 78l). Where, however, the exclusion is expressly provided for, the question must be considered in the light of the statutory provision on which the plea is rested. This question was considered by the Supreme Court in Kamala Mills v. Bombay State (AIR l965 SC. 1942). Their Lordships observed:
"In every case, the question about the exclusion of the jurisdiction of civil Courts either expressly or by necessary implication must be considered in the light of the words used in the statutory provision on which the plea is rested, the scheme of the relevant provisions, their object and their purpose".
(Paragraph 30, page 1951)
"Whenever it is urged before a civil Court that its jurisdiction is excluded either expressly or by necessary implication to entertain claims of a civil nature, the Court naturally feels inclined to consider whether the remedy afforded by an alternative provision prescribed by a special statute is sufficient or adequate. In cases where the exclusion of the civil Courts' jurisdiction is expressly provided for, the consideration as to the scheme of the statute in question and the adequacy or the sufficiency of the remedies provided for by it may be relevant but cannot be decisive".
(Paragraph 32, page 1952) The words employed in the enactment relevant here, namely section 37 of the Act, are of very wide amplitude and provide that "no assessment, order or the determination of liability to pay any tax or penalty or the recovery of any tax or penalty made under the Act or the rules made thereunder.... shall be called into question in any civil Court.. .". In this case, the plaintiff accepts, and does not challenge, any assessment or the determination of liability to pay the tax or penalty. He does not also dispute that he was liable to pay the tax assessed on his sales. He, however, contends that he had already paid the tax, that such payment was accepted by the sales tax authorities and that, therefore, the proceedings started for recovery of the same amount over again could not be regarded as initiated for recovery of any tax "under this Act or the rules made thereunder".
In Raleigh Investment Co. v. Governor-General in Council (AIR1947 PC 78), the Judicial Committee observed:
" 'Assessment made under the Act' is an assessment finding its origin in an activity of the assessing officer acting as such. The circumstances that the assessing officer has taken into account an ultra vires provision of the Act is in this view immaterial in determining whether the assessment is 'made under the Act'. The phrase describes the provenance of the assessment; it docs not relate to its accuracy in point of law. The use of the machinery provided by the Act, and not the result of that use, is the test"
(Page 81) These observations were accepted by the Supreme Court in Firm I. S. Chetty and Sons v. State of Andhra Pradesh (AIR 1964 SC 322) and Kamala Mills v. Bombay State. However, their correctness in so far as they relate to tax assessed under provisions declared to be ultra vires, was doubted in B. K. Bhandar v. Dhamangaon Municipality (1966 MPLJ 201 SC=AIR 1966 SC 249) and it was held by majority in Venkatraman and Co. v. State of Madras (AIR1966 SC 1089) that a suit for refund of sales tax assessed under provisions which were declared to be ultra vires was maintainable even though there was a statutory provision excluding the jurisdiction of civil Courts because, in such a case, the sales tax authorities had acted outside the provisions of the relevant Act and not under the provisions of that Act, Subba Rao J. who spoke for the majority, observed:
"The legal position that emerges from the decision may be summarized thus. If a statute imposes a liability and creates an effective machinery for deciding questions of law or fact arising in regard to that liability, it may, by necessary implication, bar the maintainability of a civil suit in respect of the said liability. A statute may also confer exclusive jurisdiction on the authorities constituting the said machinery to decide finally a jurisdictional fact thereby excluding by necessary implication the jurisdiction of a civil Court in that regard. But an authority created by a statute cannot question the vires of that statute or any of the provisions thereof where under it functions. It must act under the Act and not outside it. If it acts on the basis of a provision of the statute which is ultra vires, to that extent it would be acting outside the Act. In that event, a suit to question the validity of such an order made outside the Act would certainly lie in a civil Court".
(Page 1100) Here there is no question of vires of the taxing statute or any provision thereof and, therefore, this case is governed by the view taken in Raleigh Investment Co. v. Governor-General in Council, Firm I. S. Chetty and Sons v. State of Andhra Pradesh and Kamala Mills v. Bombay State.;