judgement:
Appeal No. 542 of 1962.
Appeal from the judgment and order dated April 7, 1960, of the Andhra Pradesh High Court in Tax Revision case No. 27 of 1958.
Setalvad, K. Srinivasamurthy and Naunit Lal, for the appellant.
A.Ranganadham Chetty and B. R. G. K. Achar, for the respondent.
February 6, 1964.
The Judgment of the Court was delivered by SHAH, J.
With certificate of fitness granted by the High Court of Andhra Pradesh this appeal is preferred by Shree Bajrang Jute Mills Ltd. The appellant is engaged in the manufacture of jute goods, and is a registered dealer under the Madras General Sales Tax Act.
For the assessment year 1954 55 the appellant submitted its return for sales tax claiming a deduction of Rs. 21,80,118 1 3 from the turnover in respect 693 of the jute goods supplied by rail to the Associated Cement Company Ltd. hereinafter for the sake of brevity called 'the A.C.C. under despatch instructions from that Company.
The Commercial Tax Officer rejected the claim of the appellant for deduction and that order was confirmed in appeal to the Deputy Commissioner of Commercial Taxes.
In appeal to the Sales Tax Appellate Tribunal, the order was reversed, the Tribunal holding that the appellant was entitled to exemption in respect of the turnover for the goods supplied to the A.C.C. A revision petition presented against the order to the High Court of Andhra Pradesh was heard with a large number of other petitions which raised certain common questions.
The High Court reversed the order of the Tribunal and restored the order passed by the Deputy Commissioner of Commercial Taxes.
The factory of the appellant is situated at Guntur.
The A.C.C. owns cement factories at many places (including one at Tadepalli in the State of Andhra called the Krishna Cement Works) and for the purpose of marketing its products it requires jute packing bags.
For securing a regular supply of jute bags, the A.C.C. entered into a contract with the appellant of which the following four conditions are material : "1.
All the goods are sold F.O.R. Guntur unless otherwise expressly stated in this contract.
Goods to be packed . well pressed and marked in. bound bales of. per each.
Payments to be, made in cash, in exchange for Mills Delivery Order on sellers on due date or for Railway receipts or for Dock receipts, or for Mate 's receipts, (which Dock receipts or Mate 's receipts are to be handed by a Dock 's or Ship 's Officer to the seller 's representative).
The buyers agree that the property in the goods sold shall not pass from the sellers to the buyers so long as the sellers are in possession of any bills of lading, railway receipts, dock warrants or Mate 's receipts or any other document of 694 title whether such documents are in the names of sellers or buyers, until payment is made in full.
(a) The buyers agree that the risk of loss, deterioration or damage in the goods during transit whether by land or canal or sea or when the goods are in the custody of the seller or any third person in a warehouse, dock or any premises shall be borne by the buyers notwithstanding that the property in the goods does not pass to the buyers during such transit or custody." As and when the gunny bags were needed for packing its products the A.C.C. issued despatch instructions calling upon the appellant to send jute bags by railway to the cement factories of the A.C.C. outside the State of Andhra.
Pursuant to those instructions the appellant loaded the goods in the railway wagons, obtained railway receipts in the name of the A.C.C. as consignee and against payment of the price, delivered the receipts to the Krishna Cement Works, Tadepalli which, it is common ground, was for the purpose of receiving the railway receipts and making pay ment, the agent of the A.C.C.
It is also common ground that the jute bags were sold to the A.C.C. for the purpose of packing cement by the factories of the A.C.C. to which they were sent and not for any other purpose.
The assessing authority and the Deputy Commissioner held that as the railway receipts were delivered to the agent of the buyer within the State of Andhra, and price was also realized from the agent of the buyer within the State, the goods must be deemed to have been delivered to the buyer in the State of Andhra, and the appellant was liable to pay sales tax on the price of the goods sold.
With that view the High Court agreed Under the Government of India Act, 1935, the Legislatures of every Province could legislate for levying tax on sales of goods in respect of all transactions, whether the property in the goods passed within or without the Province, provided the Province had a territorial nexus with one or more elements constituting the transaction of sale : Poppat 695 Lal Shah vs The State of Madras(1) and The Tata Iron & Steel Company Ltd. vs State of Bihar(1).
But this resulted in simultaneous levy of sales tax by many Provinces in respect of the same transaction each fixing upon one or more element constituting the sale, with which it had a territorial nexus.
With the dual purpose of maintaining an important source of revenue to the States, and simultaneously preventing imposition of an unduly heavy burden upon the consumers by multiple taxation upon a single transaction of sale, the Constitution made a special provision imposing restrictions upon the legislative power of the States in article 286 which as originally enacted ran as follows : "(1) No law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place (a) outside the State; or (b) in the course of the import of the goods into, or export of the goods out of, the territory of India.
Explanation.
For the purposes of sub clause (a) a sale or purchase shall be deemed to have taken place in the State in which the goods have actually been delivered as a direct result of such sale or purchase for the purpose of consumption in that State, notwithstanding the fact that under the general law relating to sale of goods the property in the goods has by reason of such sale or purchase passed in another State.
(2) Except in so far as Parliament may by law otherwise provide, no law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of any goods where such sale or purchase takes place in the course of inter State trade or commerce : Provided that the President may by order direct that any tax on the sale or purchase of goods which (1) ; (2) ; 696 was being lawfully levied by the Government of any State immediately before the commencement of this Constitution shall, notwithstanding that the imposition of such tax is contrary to the provisions of this clause, continue to be levied until the thirty first day of March, 1951.
(3) No law made by the Legislature of a State imposing, or authorising the imposition of, a tax on the sale or purchase of any such goods as have been declared by Parliament by law to be essential for the life of the community shall have effect unless it has been reserved for the consideration of the President and has received his assent." After the enactment of the Constitution, by a Presidential Order the Provincial Sales Tax Acts were made to accord with the restrictions imposed by article 286 of the Constitution.
It is manifest that by article 286 the legislative authority of the States to impose taxes on sales and purchases was restricted by four limitations in respect of sales or purchases outside the State, in respect of sales or purchases in the course of imports into or exports out of India, in respect of sales or purchases which take place in the course of interState trade or commerce and in respect of sales and purchases of goods declared by Parliament to be essential for the life of the community.
These limitations may overlap, but the power of the State to tax sale or purchase transactions may he exercised only if it is not hit by any of the limitations.
The restrictions are cumulative.
The sales in the present case are not sales, which have taken place in the course of inter State trade or commerce.
The only point of contest is whether they are "outside the State ' of Andhra.
It is now well settled that by article 286(1) (as it stood before it was amended by the Constitution Sixth Amendment Act, 1956) sales as a direct result of which goods were delivered in a State for consumption in such State i.e. the sales falling within the Explanation to article 286(1) were fictionally to be regarded as inside that State for the purpose of cl.
(1) (a) and so within the taxing 697 power of the State in which such delivery took place and being outside all other States exempt from sales tax by those other States : Tobacco Manufacturers (India) Ltd. vs The Commissioner of Sales tax, Bihar, Patna(1): Indian Copper Corporation Ltd, The State of Bihar and others (2) and The State of Kerala and others vs The Cochin Coal Com pany Ltd.(3).
But the Explanation is not exhaustive of what may be called "inside sales".
Clause (1)(a) excludes from the reach of tile power of the States sales outside the State but it does not follow from the Explanation that it localises the situs of all sales.
The power of the State under Entry 54 List II of the Seventh Schedule to tax sales [not falling within cls.
(1)(b), (2) and (3)] which are outside the Explanation, and which may for the sake of brevity be called 4non Explanation ' sales, remains unimaired.
It is not necessary for the purpose of this case to express an opinion, whether the theory of territorial nexus of ;the taxing State, with one or more elements which go to make a completed sale authorises since the promulgation of the Constitution the exercise of legislative power under Entry 54, List II of the Seventh Schedule to tax sales, where property in goods has not passed within the taxing State.
The question which then falls to be determined is whether the sales to the A.C.C. by the appellant may be regarded as "non Explanation sales".
There can be no doubt that if the goods were delivered pursuant to the contracts of sale outside the State of Andhra for the purpose of consumption in the State into which the goods were delivered, the State of Andhra could have no right to tax those sales by virtue of the restriction imposed by article 286(1) (a) read with the Explanation.
The facts found by the taxing authorities clearly establish that property in the goods despatched by the appellant passed to the A.C.C. within the State of Andhra when the railway receipts were handed over to the agent of the A.C.C. against payment of price.
The question still remains : were (1) ; (2) ; (3) ; 698 the transactions 'non Explanation sales ' i.e. falling outside the Explanation to article 286(1)? To attract the Explanation, the goods had to be actually delivered as a direct result of the sale, for the purpose of consumption in the State in which they were delivered.
It is not disputed that the goods were supplied for the purpose of consumption outside the State of Andhra, and in the States in which they were supplied.
It is submitted that the goods were actually delivered within the State, when the railway receipts were handed over to the agent of the buyer.
But the expression "a actually delivered" in the context in which it occurs, can only mean physical delivery of the goods, or such action as puts the goods in the possession of the purchaser : it does not contemplate mere symbolical or notional delivery e.g. by entrusting the goods to a common carrier, or even delivery of documents of title like railway receipts.
In C. Govindarajulu Naidu & Company vs State of Madras(1) Venkatarama Ayyar, J., dealing with the concept of actual delivery of goods, so as to attract the application of the Explanation to article 286(1) (a) rightly observed: "In the context it can mean only physical delivery and not constructive delivery such as by transfer of documents of title to the goods.
The whole object of the Explanation is to give a power of taxation in respect of goods actually entering the State for the purpose of use therein and it will defeat such a purpose if notional delivery of goods as by transfer of documents of title to the goods within the State is held to give the State a power to tax, when the good are actually delivered in another State.
" A similar view has been expressed in two other cases M/s. Capco Ltd. vs The Sales Tax Officer and another (2 ) and Khaitan Minerals vs Sales Tax Appellate Tribunal for Mysore (3).
(1) A.I.R. 1953 Mad.
(3) A.I.R. (2) A.I.R. 1960 AM.
699 Counsel for the respondent State relied upon section 39ofthe Indian , which provides inso far as it is material, by the first sub section that where,in pursuance of a contract of sale, the seller is authorisedto send the goods to the buyer, delivery of the goods toa carrier, for the purpose of transmission to the buyer, is prima facie deemed to be delivery of the goods to the buyer.
But that provision will not make mere delivery of the railway receipts representing title to the goods, actual delivery of goods for the purpose of article 286.
The rule contained in section 39(1) of the Indian raises a prima facie inference that the goods have been delivered if the conditions prescribed thereby are satisfied: it has no application in dealing with a constitutional provision which while imposing a restriction upon the legislative power of the States entrusts exclusive power to levy sales tax to the State in which the goods have been actually delivered for the purpose of consumption.
The High Court was therefore in error in inferring from the fact that the property had passed within the State of Andhra against delivery of the railway receipts, that the goods were actually delivered within the State.
If the inference raised by the High Court that the goods were actually delivered within the State of Andhra cannot be accepted, on the facts found there is no escape from the conclusion that the State of Andhra had no authority to levy tax in respect of those sale transactions in which the goods were sent under railway receipts to places outside the State of Andhra and actually delivered for the purpose of consumption in those States.
The appeal must therefore be allowed.
The order of the High Court is set aside and the order of the Appellate Tribunal is restored.
The appellant to get its costs in this Court and the High Court from the respondent State.

summary:
The appellant, carrying on business as a manufacturer of jute goods with its factory at Guntur, used to send jute bags by railway to the cement factories of the A.C.C. outside the State of Andhra.
For securing a regular supply of jute bags, the A.C.C. entered into a contract with the appellant and under the despatch instructions from that company, the appellant loaded the goods in the railway wagons, obtained railway receipts in the name of the A.C.C. as consignee and against payment of the price, delivered the receipts to the Krishna Cement Works, Tadepalli, which was for the purpose of receiving the railway receipt and making payment, the agent of the A.C.C. From the amounts shown as gross turnover in the return for the assessment year 1954 55, the appellant claimed reduction of certain amounts in respect of the goods supplied by rail to the A.C.C. outside the State of Andhra Pradesh under its despatch instructions.
The Commercial Tax Officer and the Deputy Commissioner of Commercial Taxes disallowed the claim and held that as the railway receipts were delivered to the agent of the buyer within the State of Andhra, and price was also realized from the agent of the buyer within the State, goods must be deemed to have been delivered to the buyer in the State of Andhra Pradesh, and the appellant was liable to pay tax on the sales.
On appeal, this order was reversed by the Appellate Tribunal.
In revision the High Court restored the order of the Deputy Commissioner of Commercial Taxes.
The question for determination in this appeal was whether the sales to the A.C.C. by the appellant may be regarded as "non Explanation sales", i.e. falling outside the Explanation to article 286(1).
Held:(i) If the goods were delivered pursuant to the contracts of sale outside the State of Andhra for the purpose of consumption in the State into which the goods were delivered, the State of Andhra could have no right to tax those sales by virtue of the restriction imposed by article 286(1)(a) read with Explanation.
To attract the Explanation, the goods had to be actually delivered as a direct result of the sale, for the purpose of consumption in the State in which they were delivered.
The expression "actually delivered ' in the context in which it occurs, can only mean physical delivery of 692 the goods, or such action as puts the goods in the possession of the purchaser; it does not contemplate mere symbolical or notional delivery.
C.Govindarajulu Naidu & Co. vs State of Madras, A.I.R. 1953 Mad.
116, M/s. Capco Ltd. vs Sales Tax Officer, A.I.R. 1960 All.
62 and Khaitan Minerals vs Sales Tax Appellate Tribunal for Mysore, A.I.R. followed.
Poppat Lal Shah vs State of Madras, ; , Tata Iron & Steel Co. Ltd. vs State of Bihar, ; , Tobacco Manufacturers(India) Ltd. vs Commissioner of Sales Tax, Bihar, [1961] 2 S.C.R.106, Indian Copper Corporation Ltd. vs State of Bihar, [1961] 2 S.C.R.276 and State of Kerala vs Cochin Coal Co. Ltd., [1961] 2 S.C.R. 219, referred to.
(ii)Section 39 of the Indian will not make mere delivery of the railway receipts representing title to the goods, actual delivery of goods for the purpose of article 286.
The rule contained is section 39(1) has no application in dealing with a constitutional provision which while imposing a restriction upon the legislative power of the States entrusts exclusive power to levy sales tax to the State in which the goods, have been actually delivered for the purpose of consumption.


judgement:
Appeals Nos. 86 to 97 of 1962.
Appeals from the judgment and order dated July 25, 1955, of the Assam High Court in Civil Rule Nos.
94 97, 105, 106, 114 and 175 to 179 of 1953.
M. C. Setalvad, Sohan Shroff, P. K. Kapila and Sukumar Ghosh, for the appellants.
Naunit Lal, for the respondents.
February 4, 1964.
The Judgment of the Court was delivered by SHAH J.
These appeals have been filed with certificates granted by the High Court of Assam under article 132 of the Constitution against orders passed in certain petitions filed by the appellants praying for writs of certiorari or other appropriate writs quashing orders relating to assessment of sales tax, and prohibiting the Superintendent of Taxes, Dhubri and other officers from taking action in enforcement of the said orders.
The appeals raise common questions and may be disposed of by a common judgment.
The appellants are merchants carrying on business as dealers in jute, and have their principal place of business at Calcutta.
The appellants have a branch office at Dhubri in the State of Assam and are registered dealers under the Assam Sales Tax Act, 1947 (17 of 1947).
The appellants purchased jute at Dhubri and other places in the State of Assam and despatched bales 'of jute to diverse factories ,outside the Province of Assam.
The appellants submitted returns of turnover for purposes of sales tax before the Superintendent of Taxes, Dhubri, under the Assam Sales Tax Act in respect of transactions of sale during the period 657 between March 1948 to March 1950.
The Superintendent of Taxes called upon the appellants under section 17(2) of the Act to produce their books of account and other evidence in support of their returns and granted them time to enable them to comply with the requisition, but the appellants failed to do so.
The Superintendent of Taxes then made "best judgment assessments" exercising his powers under section 17(4) of the Act and issued demand notices for the tax determined.
Against the orders passed by the Superintendent of Taxes appeals were preferred to the Assistant Com missioner of Taxes.
Before the appellate authority the appellants produced some but not all their books of account and documents in support of their returns.
Before the appellant authority it was contended, inter alia, that the definition of "sale" in section 2(12) of the Act was beyond the legislative competence of the Provincial Legislature, that tax was sought to be levied on sales effected outside the State, and that imposition of sales tax on the transactions of the appellant amounted to levying an "export tax" which was not open to the Provincial Legislature.
It was however not contended before the Assistant Commissioner of Taxes that the jute bales, sale price of which was included in the turnover were not at the time of the contracts in the form of jute bales actually within the State of Assam and there fore the Explanation to section 2(12) did not make that sale price liable to be included in the turnover of the appellants.
The Assistant Commissioner of Taxes, Assam, dismissed the appeals.
In the revision applications preferred to the Commissioner of Taxes, Assam, against the order of the Assistant Com missioner of Taxes it was contended for the first time that the price of jute included in the turnover under the orders passed by the Superintendent of Taxes was not liable to be taxed because within the meaning of the Explanation to section 2(12) the goods were not at the time of the contracts actually in the Province of Assam.
The Commissioner rejected the contention after examining what he called the "time table of cultivation".
He observed that the usual time for marketing jute of the new crop was between July and June of the following year, jute being planted in or 134 159 S.C. 42.
658 about February and being ready for marketing some time about the month of June.
The Commissioner further observed that the contracts were made on diverse dates between March and September and deliveries under the contracts were made after the month of July when the new crop was brought into the market.
The contracts between the months of March and July were therefore in respect of the last year 's crop and the goods sold must actually have been in the Province of Assam at the date of the contracts.
The Commissioner made certain modifications in the assessment order, but with those modifications we are not concerned in these appeals.
Against the order passed by the Commissioner, petitions under article 226 of the Constitution were filed by the appellants for writs of certiorari and prohibition.
Amongst the grounds urged before the High Court were the following two grounds, which alone survive for determination in these appeals: (1) that the Explanation to section 2(12) of the Act was ultra vires the Assam Legislature under the provisions of the Government of India Act, 1935, and therefore tax could not be levied on sales irrespective of the place where the contracts were made merely relying upon the circumstance that at the time of the contracts of sale the goods contracted to be sold were actually in the Province of Assam; and (2) that the finding recorded by the Commissioner that the goods were actually in the Province of Assam at the time when the contracts were made was "speculative".
The High Court held that the Explanation to section 2(12) was.
in respect of the period prior to the Constitution, not ultra vires the authority of the Provincial Legislature, and that no attempt was made to establish before the appellate authority that the books of account supported the contention that the goods were not actually in existence in the State of Assam at the time of the contracts of sale.
Holding that the reasons which the Commissioner had given in support of his finding were not "altogether unjustified" and that the taxing 659 authorities being "fully conscious" that one of the essential ingredients of tax liability was that the goods must be actually in existence in the State of Assam at the time of the contracts of sale, the High Court declined to consider whether the conclusions of the taxing authorities on questions of fact were correct.
But the High Court held that the plea about the vires of section 2(12) and the Explanation thereto raised a substantial question as to the interpretation of the Constitution, and accordingly granted certificates of fitness under article 132 of the Constitution.
At the hearing of these appeals counsel for the appellants sought leave to challenge the correctness of the decision that the goods were when the contracts were made actually within the Province of Assam.
We have heard counsel for the appellants at great length upon this application for leave to appeal on grounds other than constitutional on which the certificates were granted by the High Court.
After carefully considering the arguments, we are of the view that no case has been made out for acceding to that request.
A person appealing to this Court under article 132 of the Constitution may not challenge the correctness or propriety of the decision appealed against on grounds other than those on which the certificate is granted, unless this Court grants him leave to raise other questions.
Such leave is generally granted where the trial before the High Court has resulted in grave miscarriage of justice or where the appeal raises such substantial questions that on an application made to this Court under article 136 of the Constitution leave would be granted to the applicant to appeal against the decision on those questions.
The Assam Sales Tax Act, 1947, was enacted in 1947.
By section 2(3) the expression "dealer" is defined as meaning any person who carries on the business of selling or supplying goods in the Province, and by the Explanation the manager or agent of a dealer who resides outside the Province and carries on the business of selling or supplying goods in the Province is in respect of such business to be deemed a dealer for the purpose of the Act.
Clause (12) of section 2 defines 'sale '.
Section 3 is the charging section and section 4 prescribes the rates of tax.
The sales tax authority may, 660 if he is not satisfied that the return furnished by the dealer is correct and complete, serve on the dealer a notice requiring him either to attend in person and to produce or cause to be produced any evidence on which he may rely in support of his return [sub section
(2) of section 17], and may make an assessment to the best of his judgment if the dealer fails to make a return or fails to comply with the terms of the notice issued under sub section
(2) of section 17.
Section 30 confers a right of appeal to an aggrieved dealer to the authority prescribed by the rules, and by section 31 revisional jurisdiction may be exercised by the Commissioner of Sales Tax against the order of the sales tax authorities.
By section 32, within sixty days from the date of service of any order in appeal or revision, the dealer may, by application in writing, require the Board of Revenue or the Commissioner, as the case may be, to refer to the High Court any question of law arising out of such order, and if the Board or the Commissioner decline to state the case, the dealer may apply to the High Court calling upon the Board or the Commissioner to state the case, and the High Court may if it be not satisfied with the correctness of the decision of the Com missioner, require the authority concerned to state the case and refer it and on receipt of any such requisition, such authority shall state and refer the case.
The High Court upon hearing any such case decides the question of law raised on the reference and delivers its judgment thereon containing the grounds on which such decision is founded [sub section
The Act therefore provides a hierarchy of taxing tribunals competent to decide question as to the liability of the tax payer under the Assam Sales Tax Act, with a right to have questions of law arising out of the order decided by the High Court of the Province.
Primarily it is the Superintendent of Taxes who assesses the liability to pay tax.
An appeal against the order of the Superintendent lies to the Assistant Commissioner of Taxes and against the order of the Assistant Commissioner a revision application lies to the Commissioner Against the order of the Commissioner a reference may be demanded on questions of law to the High Court and if reference is refused the High Court may be moved to call for a reference.
The scheme evolved by the Legislature for determination 661 of tax liability is that all questions of fact are to be decided by the taxing authorities and on questions of law arising out of the decision of the taxing authorities the opinion of High Court may be obtained.
The High Court has however no power to decide questions of fact, which are exclusively within the competence of the taxing authorities.
The High Court is again not an appellate authority over the decision of the Commissioner; it has merely to give its opinion on questions of law arising out of the order of the Commissioner.
Whether the decision of the Commissioner is not supported by any evidence, or is based upon a view of facts which could never be reasonably entertained, is a question of law which arises out of the order.
Against the order of the Commissioner an order for reference could have been claimed if the appellants satisfied the Commissioner or the High Court that a question of law arose out of the order.
But the procedure provided by the Act to invoke the jurisdiction of the High Court was bypassed.
The appellants moved the High Court challenging the competence of the Provincial Legislature to extend the concept of sale, and invoked the extraordinary jurisdiction of the High Court under article 226 and sought to reopen the decision of the taxing authorities on questions of fact.
The jurisdiction of the High Court under article 226 of the Constitution is couched in wide terms and the exercise thereof is not subject to any restrictions except the territorial restric tions which are expressly provided in the Article.
But the exercise of the jurisdiction is discretionary; it is not exercised merely because it is lawful to do so.
The very amplitude of the jurisdiction demands that it will ordinarily be exercised subject to certain self imposed limitations.
Resort to that jurisdiction is not intended as an alternative remedy for relief which may be obtained in a suit or other mode prescribed by statute.
Ordinarily the Court will not entertain a petition for a writ under article 226, where the petitioner has an alternative remedy which, without being unduly onerous, provides an equally efficacious remedy.
Again the High Court does not generally enter upon a determination of questions which demand an elaborate examination of evidence to establish the right to enforce which the writ is 662 claimed.
The High Court does not therefore act as a court of appeal against the decision of a court or tribunal, to correct errors of fact, and does not by assuming jurisdiction under article 226 trench upon an alternative remedy provided by statute for obtaining relief.
Where it is open to the aggrieved petitioner to move another tribunal, or even itself in another jurisdiction for obtaining redress in the manner provided by a statute, the High Court normally will not permit, by entertaining a petition under article 226 of the Constitution, the machinery created under the statute to be by passed, and will leave the party applying to it to seek resort to the machinery so set up.
In the present case the appellants had the right to move the Commissioner to refer a case to the High Court under section 32 of the Act, and to move the High Court if the Commissioner refused to refer the case.
But they did not do so and moved the High Court in its jurisdiction under article 226 of the Constitution, and invited the High Court to reopen the decision of the taxing authorities on questions of fact, which jurisdiction by the statute constituting them is exclusively vested in the taxing authorities.
This they did, without even raising the questions before the Superin tendent of Taxes and the Assistant Commissioner.
The appellants who are dealers registered under the Assam Sales Tax Act submitted their returns to the Superintendent of Taxes, but failed when called upon to produce their books of account and other evidence in support of their returns.
Even before the Assistant Commissioner, they produced some but not all their books of account and evidence demanded by the Superintendent.
By the Explanation to section 2(12) of the Act the expression 'sale ', notwithstanding anything contained in the Indian , includes sale of any goods which are actually in the Province at the time when the contract of sale in respect thereof is made, irrespective of the place where the said contract is made and such sales are deemed for the purposes of the Act to have taken place in the Province.
Under the Indian , a sale takes place when property in the goods passes.
But, for the purposes of the Assam Sales Tax Act situation of the goods 663 is seized by the Legislature for the purpose of fictionally regarding the sale as having taken place within the Province of Assam if at the time of the contract of sale the goods are within the Province.
Liability to sales tax in respect of the goods where the transfer in the property of the goods has taken place outside the Province of Assam undoubtedly arose if the conditions prescribed by the Explanation, exist : viz. the goods are actually in the Province when the contract of sale is made, and not otherwise.
But the question whether the goods at the date of the contract of sale were actually in the Province is a question of fact which had to be determined by the sales tax authorities.
Before the Superintendent of Taxes liability to pay tax was challenged but it does not, appear to have been contended that at the time of the contract of sale, :the goods were not actually within the Province, and no such contention appears to have been even raised before the Assistant Commissioner of Taxes.
Before the Commissioner in the revision application filed by the appellants it was urged that part of the goods the price of which was sought to be included in the turnover were not within the Province at the time of the contract of sale and therefore the price of those goods could not be taken into account in computing the taxable turnover.
The Commissioner held having regard to the "time table of cultivation of jute" and the time when the jute is brought into the market for sale, that the goods sold were within the Province on the dates of the contracts and therefore the price thereof was liable to be included in the taxable turnover.
The High Court, as we have already observed, took the view that the finding of the Commissioner was not "altogether unjustified", nor could it be said that the Commissioner and the other taxing authorities "were not quite conscious of" the requirements which attracted the application of the Explanation to section 2(12) and declined to enter upon a reappraisal of the evidence which in the view of the High Court the taxing authorities alone were competent to enter upon.
In these appeals Mr. Setalvad on behalf of the appellants contends that there is clear evidence on the record to show that even applying the test laid down by the Commissioner 664 some of the contracts of sale were made before the goods were marketable and therefore the view taken by the taxing authorities that the goods were at the date of the contract in existence within the Province of Assam was "without any foundation".
Counsel also submitted that some of the contracts related to jute grown in Pakistan and with respect to those contracts also the assumption made by the Com missioner that the goods were within the State of Assam at the date of the contract of sale could not be warranted.
Counsel then said that the description of the goods in the contracts of sale indicated that they related to bales whereas the contracts for purchase by the appellants were in respect of loose jute and as the goods purchased were not identical or ascertainable with reference to the contracts of sale made by the appellants, liability to pay tax was not attracted under section 2(12) of the Act.
We are unable to entertain these pleas because they were never raised before the Superintendent of Taxes and the Assistant Commissioner and no evidence was produced by the appellants to support those pleas.
Before the Commissioner it was broadly urged that the goods in respect of the con tracts could not have been in existence within the Province at the date of the respective contracts of sale but that argument was for reasons already mentioned rejected by the Commissioner and the High Court declined to allow the question whether the findings of the Commissioner were "speculative" to be agitated.
The appellants now seek to plead that the taxing authorities were in error in holding that the goods conformed to the conditions as to the sites of the goods at the dates of the contracts of sale, prescribed by section 2(12) so as to make the price liable to be included in the taxable turnover.
The Legislature has entrusted power to ascertain facts on which the price received on sales becomes taxable, to the authorities appointed in that behalf with right of recourse to the High Court on questions of law arising out of the order of the Commissioner of Taxes.
It is therefore contemplated by the Legislature that all material evidence on which a tax payer relies to justify his claim that his transactions are not taxable, should be placed before the taxing authorities so that they may have an opportunity to adjudicate upon the claim.
If after a proper trial, the claim is negatived, 665 because the facts on which it is founded are not proved, the proceeding must end.
If, however, the adjudication of the Commissioner is vitiated because there is no evidence to support it or it is based on conjectures, suspicions or irrelevant materials, or the proceedings of the taxing authorities are otherwise vitiated so that there has been no fair trial, the High Court may undoubtedly advise the Com missioner on questions properly referred to it in the manner provided by the Act.
But the High Court cannot be asked to assume the role of an appellate authority over the decision of the Commissioner on questions of fact or even of law.
Assuming that there is some substance in the contention that the adjudication by the Commissioner proceeded on grounds which the appellants characterised as "speculative", it was open to them to resort to the machinery provided by the Act, and having failed to do so, they could not ask the High Court to act as an appellate authority in clear violation of the statutory provisions and to bypass the machinery provided by the Act.
We accordingly decline to entertain the application to raise questions other than those raised by the certificate granted by the High Court, because the questions sought to be raised are questions of fact which were not canvassed at the appropriate stage before the taxing authorities and the machinery provided under the Act for determination of questions relating to liability to tax is attempted to be bypassed.
The constitutional question on which certificate was granted does not need consideration in any detail.
By the Explanation to section 2(12) of the Act notwithstanding anything to the contrary contained in the provisions of the Indian , a sale is deemed to be complete when the goods which are actually within the State of Assam at the time when the contract of sale is made, irrespective of the place where the contract is made.
Under the , in the absence of a contract to the contrary a sale is complete when property in the goods passes, but by the Assam Sales Tax Act the Legislature has attempted to locate the sites of sale for the purpose of levy 666 of sales tax by fixing upon the actual situation of the goods within the Province at the date of the contract, for the purposes of levying tax on sales.
The Legislature has thereby not overstepped the limits of its authority : The Tata Iron & Steel Company Ltd. vs The State of Bihar(1).
No argument has therefore been advanced before us to support the plea of unconstitutionality.
All the appeals fail and are dismissed with costs.
One hearing fee.
Appeals dismissed.

dataset_name: IN-Abs

summary:
The appellants who are merchants carrying on business as dealers in jute in Calcutta, submitted returns of turnover for purposes of sales tax due under the Assam Sales Tax Act, 1947, but as they did not comply with the requisition of the Superintendent of Taxes to produce their books, the latter made a "best judgment assessment" under section 17(4) of the Act.
Their appeals to the Assistant Commissioner of Taxes and revision petitions to the Commissioner of Taxes, Assam were dismissed.
The appellants then moved the High Court of Assam by petitions under article 226 and contended that Explanation to section 2(12) of the Act was ultra vires the Assam Legislature and that the tax could not be levied on sales irrespective of the place where the contracts were made.
They also contended that the finding of the Commissioner that the goods were actually in the State of Assam at the time when the contract was made was based on mere speculation.
The writ petitions were dismissed by the High Court and the appellants appealed to the Supreme Court with certificate under article 132(1) of the Constitution.
Before the Supreme Court the appellants applied for leave under article 132(3) of the Constitution to challenge the correctness of the decision of the High Court that the goods were actually within the State of Assam when the contracts were made.
Held:(i) Leave under article 132(3) be refused and the appeal must be restricted to the question of law as to the interpretation of the Constitution, certified by the High Court.
If these questions were desired to be raised the appellants ought to have moved the Commissioner to refer the case to the High Court under section 32 of the Act.
They could have moved the High Court if the Commissioner refused to refer the case to the High Court.
The Act provided machinery for obtaining relief and the same had to be resorted to and could not be allowed to be by passed.
Ordinarily, the High Court does not entertain a petition for a writ under article 226, where the petitioner has an alternative remedy, which without being unduly onerous, provides an equally efficacious remedy.
The High Court does not generally enter upon questions which demand an elaborate examination of evidence to establish the rights to enforce which the writ is claimed.
The High Court does not in exercise of its jurisdiction under article 226 act as a court of appeal against the decision of a court or Tribunal correct errors of fact.
656 The scheme of the Assam Sales Tax Act is that all questions of fact are to be decided by the taxing authorities.
The opinion of the High Court can be obtained on questions of law arising out of the decisions of the taxing authorities.
The High Court has under the Act no power to decide questions of fact which are exclusively within the competence of the taxing authorities.
(ii)Explanation to section 2(12) of the Act is not ultra vires the Legislature.