Case Note & Summary
The Supreme Court considered three civil appeals by special leave arising from sales tax assessments under the Bihar Sales Tax Act, 1947. The appellant, a registered dealer under the Bihar Sales Tax Act, 1944, carried on business in raw jute at Sahebganj, Bihar. For three assessment periods from October 1, 1947 to March 31, 1950, the Sales Tax Officer disallowed deductions claimed by the assessee on the ground that purchases made on behalf of two jute mills outside Bihar and dispatches of jute to the assessee's own firm in Calcutta were not 'sales' within the meaning of the Act. The Deputy Commissioner of Commercial Taxes dismissed the assessee's appeals, and the Board of Revenue, Bihar, dismissed the revision petitions by orders dated August 20, 1953, September 3, 1953, and April 30, 1954. The Board also refused to state a case to the High Court under Section 25(1) of the Act, holding that no questions of law arose. The High Court of Patna dismissed the assessee's applications for the first two periods but directed the Board to state a case for the third period on one question relating to deduction for mustard seed sales to a registered dealer. The High Court answered that question against the assessee on January 21, 1957. The assessee had filed special leave petitions against the Board's orders dated August 20, 1953, September 3, 1953, and August 30, 1954; special leave was granted on December 23, 1955. At the hearing of the appeals, the respondent State of Bihar raised a preliminary objection that the appeals were not maintainable because no leave had been sought against the subsequent orders of the Board and the High Court, and the appeals would effectively bypass the High Court. The Supreme Court upheld this objection, holding that although Article 136 is worded broadly, the Court's rule of practice requires exceptional and special circumstances for granting special leave. The Court further held that special leave could not be used to by-pass the High Court by ignoring its orders, and that even if leave had been granted, the Court was not precluded from concluding at the hearing that it ought not to have been granted. The Court found no exceptional circumstances and dismissed all three appeals. The decision reinforced the principle that special leave jurisdiction is discretionary and should not be invoked to circumvent the normal appellate process.
Headnote
A) Constitutional Law - Special Leave to Appeal - Article 136 Constitution of India - Supreme Court's discretionary power to grant special leave requires exceptional and special circumstances; ordinary errors do not justify exercise - Held that the rule of practice uniformly followed restricts grant to cases of exceptional and special circumstances (Paras 1-11). B) Practice and Procedure - Maintainability of Appeal by Special Leave - Appeals against Board of Revenue orders bypassing High Court are not maintainable when High Court orders exist - Held that special leave cannot be used to by-pass the High Court by ignoring its orders; no exceptional circumstances existed in present case (Paras 1-11). C) Sales Tax - Deduction Claims - Bihar Sales Tax Act, 1947, Section 24, 25(1) - Assessee's claim that purchases and dispatches were not sales involved findings of fact and no question of law arose - Held that Board of Revenue was justified in refusing to state a case to High Court; High Court's dismissal of applications and adverse answer on mustard seed question were not challenged in special leave petition (Paras 1-11). D) Practice and Procedure - Revocation of Special Leave at Hearing - Once special leave granted, Court may at hearing hold it ought not to have been granted if exceptional circumstances absent - Held that the Court is not precluded from concluding at the time of hearing that such leave ought not to have been granted (Paras 1-11).
Issue of Consideration
Whether appeals by special leave against orders of Board of Revenue were maintainable when no applications for leave to appeal were filed against subsequent orders of the High Court and Board, and whether the grant of special leave could be questioned at the hearing of the appeal.
Final Decision
The Supreme Court dismissed all three appeals as not maintainable. It held that the assessee was not entitled to a grant of special leave against the orders of the Board of Revenue where the result would be to by-pass the High Court by ignoring its orders. Although special leave had been granted, the Court at the hearing was not precluded from concluding that such leave ought not to have been granted. No exceptional and special circumstances existed to justify the exercise of discretion under Article 136.
Law Points
- Article 136 Constitution of India
- special leave to appeal
- exceptional circumstances
- maintainability of appeal
- bypassing High Court
- revision
- statement of case
- sales tax deduction
- question of law
- rule of practice
