Sales Tax Officer vs Byford Motors Limited
1995 Latest Caselaw 466 Del

JUDGMENT

M. Jagannadha Rao, C.J.

(1) This Appeal by the defendant Sales Tax Officer, Ward No. 47, Vikas Bhawan, New Delhi is directed against the order of the learned Single Judge dated 24th August,1993 in IAs 5606 and 6554/93 in Suit No. 1297/93. By virtue of the said order the learned Single Judge granted ad interim injunction in favor of plaintiff(respondent) against the recovery of sale-tax dues from the appellants for the years 1990-91 and 1991-92.The total amount of sales-tax involved in this case was said to come to Rs. 1,21,15,315. The operation of the impugned order was stayed by the learned Single Judge subject to the condition that the petitioner deposits a sum of Rs. 5 lacs in cash and furnishes security of immoveable properties in a sum of Rs. 20 lacs to the satisfaction of the appellate authority. The learned Single Judge also stated that the plaintiff would be at liberty to file an appeal before the Appellate Authority under the Local Act against the impugned assessment order during the pendency of this case.

(2) The reliefs in the two lAs mentioned above were as follows: Ia 5606/93 was filed by the plaintiff praying that the defendants 1 to 3 (namely Sales Tax Officer, New Delhi, Commissioner of Sales Tax, New Delhi and Lt. Governor, National Capital Union Territory of Delhi) be restrained from making any assessment on the basis of letters Annexures A & C or any other assessment in respect of sales which, according to the plaintiff-Com-pany, took place outside Delhi. In Ia 6554/93 the plaintiff prayed for stay of recovery of any amount under the two demand notices both dated 10th June, 1993 for the years 1990-91 as well as 1991-92 respectively. The suit itself was filed on 27th May,1993 praying for a declaration that the transactions of sales set out in Schedule for the financial years 1990-91 and 1991-92 were valid sales effected in the respective towns of Sates/Union Territories of Haryana, Chandigarh and Daman and the said sales were effected outside the National Capital Territory of Delhi and were not liable to sales tax under Delhi Sales Tax Act, for a mandatory injunction to cancel the letters of the department dated 20.7.1992 and 24.9.1992 Annexure 'A' and 'C' and for directing defendants 1 to 3 not to act upon the same and not to make any assessment order in respect of transactions sought to be covered by the said letters and set out in the Schedule. It was alternatively prayed that this Court should come to the conclusion that the aforesaid sales were effected within the National Capital Territory of Delhi and not in the territories of State of Haryana, Chandigarh and Daman, and the Court be pleased to direct defendants 4 to 12 (the officials of the above said three States) by mandatory injunction to refund the amounts received by them and direct defendants 1 to 3 (Delhi Sales-tax authorities and the Delhi Administration) to recover the balance amount from purchasers of the said vehicles on the basis of assessment which might be made by them.

(3) Subsequent to the filing of this suit, a demand notice filed as Annexure "E'_ in the Ia 6556/93 was issued on 10th June,1993 for 47,67,242 and another demand notice filed as Annexure 'H' was issued for Rs. 26,78,013 on the same date. In view of the said demand notices, the petitioner moved for amendment of the plaint by filing Ia 6556/94. Thereafter an application was filed for setting aside the assessment orders and consequential reliefs. After that, the defendant/appellant filed a reply in Ia 6554/93 stating that the suit was not maintainable and was barred by Section 67 of the Delhi Sales Tax Act,1975. The said Ia was disposed of on 24th August, 1993 as stated earlier granting injunction subject to the conditions referred to above. The learned Single Judge dealing with the question whether the suit could be filed to set aside the assessment order, came to the conclusion that the suit lay where fundamental principles of judicial procedure have not been complied with. Of course what fundamental principles were violated was not stated. The learned Single Judge referred to the judgments of the Supreme Court in the case of M/s. Kamala Mills Ltd. v. State of Bombay, . Reference was also made to State of Kerala v. Ramaswami Iyer & Sons, . The learned Single Judge observed: "THE question whether the provisions of the statute have been complied with or not in the present case will depend on the facts of the case and this point cannot be decided while disposing of these applications. In case it is held that the impugned assessment order passed by the Assessing Authority was within jurisdiction, the suit will not be maintainable and the remedy of the plaintiff will be only to challenge those orders before the Appellate Authority under the Local Act."

The learned Single Judge held that the suit was maintainable. He then passed the conditional order dated 24th August, 1993 granting injunction in respect of stay of collection of the amount covered by the demand notices subject to the condition that the petitioner should deposit Rs. 5 lacs in cash and furnishes security of the immovable properties in the sum of Rs. 20 lacs to the satisfaction of the defendant No.1.

(4) The Fao was filed by the appellant on 21st September, 1993. Stay of the proceedings in the suit was granted on 7th March,1994 in Cm 830/94. Thereafter plaintiff also filed Ia 6594/94 and Ia 6759/94 praying that pending the hearing of the Ia 6594/94 for extension of time, ex parte order may be passed restraining the assessing authorities from taking coercive steps for recovery of the sales tax for the assessment years 1990-91 and 1991-92. The application would show that even after one year of passing of the conditional order dated 24th August, 1993, the plaintiff had still not complied with the directions regarding the deposit etc. At that stage Ia 6759/94 was filed on 7th July, 1994 to restrain the defendants 1 to 3 from recovering any amount pending disposal of Ia 6594/94 contending that the amount of Rs. 5 lacs had been paid and furnished security of Rs. 20 lakhs. Ia 7698 / 94 was also filed by the plaintiff under Order 8 Rule 10. The amendment applications raised the questions, one was about validity of Section 67 which barred a suit to set aside an assessment and the other to permit the plea to set aside the assessments made after the suit.

(5) The Counsel for appellant (Department) argued that the suit was not maintainable for the reliefs prayed initially and also in respect of the relief for setting aside the assessment and refund. Counsel for plaintiff also argued elaborately on these questions. We have gone into the question of maintainability of the suit as stated above.

(6) It is, therefore, clear that the question of maintainability of the suit was argued before the learned Single Judge in the injunction application. The question was fully argued before us on 27.1.95,3.2.95,10.2.95, 15.2.95 and 27.3.95. We are mentioning these facts to make it clear that the respondents/plaintiff cannot again be permitted to raise contentions about the maintainability of the suit in case the amendment applications questioning Section 67 and questioning the assessments, since filed by the plaintiff I.A 466/94, I.A.6556/94 etc. are allowed. It will be taken that the question of maintainability of the suit has been fully argued in the injunction applications before us.

(7) Before we proceed with the discussion, we have to refer to certain orders passed by this Court in earlier writ petitions filed by various other dealers raising the same questions as raised by the present plaintiff in this suit. The Division Bench of this Court passed orders on 26th May, 1994 in Writ Petition 1947/94. The question there was whether the Sales Tax Officer could include the gross turn-over of the petitioner therein in respect of the sales made outside Delhi and transactions entered between the seller and the purchaser of the vehicle during the said years. The appeals were filed before the Appellate Authority. The Additional Commissioner of Sales-tax (Appeals) directed the petitioner company there to pay a sum of Rs. 4 lakhs each for the assessment years 1990-91 and 1991-92 against the demands created on account of sales by branch offices and Rs. 20 lakhs and Rs. 5 lakhs for assessment years 1990-91 and 1991-92 respectively against the demands created by taxing sales allegedly made to third parties. The Appellate Tribunal modified the said order of the Additional Commissioner of Sales-tax on 15th April, 1994. The petitioner there was directed to deposit Rs. 17 lakhs for the assessment year 1990-91 and Rs. 6 lakhs for the assessment year 1991-92. When the said order was questioned in the writ petition. Counsel on both sides were heard and on suggestion of the Counsel for the department, stay was granted directing the petitioner therein to deposit Rs. 4 lakhs in respect each of the two transactions involved in the case for each of the years and on payment thereof, the appeal before the Appellate Authority could be entertained. This suggestion was accepted by the learned Counsel for the petitioner in that writ petition represented by the same Counsel Mr. P.C. Khanna, Senior Advocate, who is also appearing in this case before us. We are only mentioning this fact as a matter of history and in fact in respect of a large number of other dealers who were similarly situate, they have been allowed to make a deposit of Rs. 4 lacs for each assessment year. On that basis departmental appeals were to be entertained. In the case before us arising out of the suit, the learned Single Judge has permitted the appellant to pay Rs. 5 lacs and give security for Rs. 20 lakhs for both years put together.

(8) During the course of the hearing before us it was submitted by learned Counsel for the department that if the plaintiff is prepared to comply with the same directions which the other dealers have complied within the writ petitions, the plaintiff's appeal could be heard by the Appellate Authority. That would mean plaintiff has to pay Rs. 8 lakhs for the two assessment years put together. While the Counsel for the appellant-department was also willing for such a course in this F.A.O, the respondent/plaintiff's Counsel stated before us that the plaintiff in this suit is not willing to follow the same course adopted by the other dealers and wants a decision on the question of maintainability of the suit in this FAO. Obviously this is because the plaintiff has to pay Rs. 8 lakhs (Rs. 4 lakhs for each year) rather than a lumpsum of Rs. 5 lakhs and security of Rs. 20 lakhs as now directed by the learned Single Judge.

(9) With these preliminary remarks, we shall take up the main issue argued before us, namely, the question whether the suit is maintainable in the face of Section 6 of the Delhi Sales Tax Act, 1975.

(10) The Delhi Sales Tax Act, 1975 defines a 'dealer' in Section 2(e) as a person who carries on business in Delhi, Section 2(1) defines 'sale'. Section 2(m) defines "sales-price', and Section 2(0) defines 'turnover'. Section 3 deals with 'incidence of tax'. Section 4 deals with 'rates of tax'. Section 8 deals with certain sales and purchases not liable to tax. It reads as under:- "SECTION 8. Certain sales and purchases not liable to tax: Nothing in this Act or the Rules made thereunder shall be deemed to impose, or authorise the imposition of a tax on any sale or purchase of any goods when such sale or purchase takes place (i) in the course of inter-state trade or commerce; or (ii) outside Delhi; or (iii) in the course of import of goods into, or export of goods out of, the territory of India Explanation: Sections 3,4 and 5 of the Central Sales Tax Act,1956 shall apply for determining whether or not a particular sale or purchase takes place in the manner indicated in clause (i), clause (ii) or clause (iii) of this Section".

Therefore, the question whether the sale or purchase in question took place 'outside Delhi' falling under Section 8(ii) is a question that arises in the assessment proceedings and it has been decided by the assessing authority at Delhi, that the sale/purchase took place 'not outside Delhi' but within Delhi.

(11) Section 4 of the Central Sales Tax Act deals with the question as to when a sale or purchase of goods can be said to have taken place outside a State. It states: "SECTION 4:When is a sale or purchase of goods said to take place outside a State: (1) Subject to the provisions in Section 3, when a sale or purchase of goods is determined in accordance with Sub-section (2) to take place inside a State, such a sale or purchase shall be deemed to have taken place outside all other States. (2) A sale or purchase shall be deemed to take place inside a State if the goods are Within the State:- (a) in the case of specific or ascertained goods, at the time the contract of sale is made; and (b) in the case of unascertained goods or future goods, at the time of their appropriation to the contract of sale by the seller or by the buyer, whether assent of the other party is prior to subsequent to such appropriation. Explanation: When there is a single contract of sale or purchase of goods situated at more places than one, the provisions of this sub-section shall apply as if there were separate contracts in respect of the goods at each of such places. Now, the Assessing Authority at Delhi applied Sections 4 and 8 of the Delhi Sales Tax Act,1975 and Section 4 of the Central Sales Tax Act and held that the sales/purchases have taken place inside Delhi. The plaintiff has filed an I.A. under Order 6 Rule 17 Civil Procedure Code in suit to question the assessment. The plaintiff has filed another I.A. under Order 6, Rule 17 Civil Procedure Code questioning the validity of Section 67 of the Delhi Sales Tax Act. The question of maintainability of the suit challenge Section 67 and the assessment orders are argued in the injunction application itself.

(12) Section 67 of the Delhi Sales Tax Act, 1975 reads: SECTION 67: Bar suits in Civil Courts: No suit shall be brought in any Civil Court to set aside or modify any assessment made or any order passed under this Act or the rules made thereunder and no prosecution, suit or other proceeding shall lie against the Government or any officer of the Government for anything done in good faith or intended to be done under this Act or the rules made thereunder."

Learned Counsel for the plaintiff-respondent submits that in regard to these transactions, one or other of the States/Union Territories of Haryana or Chandigarh or Daman has already imposed sales tax and tax has been paid and, therefore, the said States/Union Territories have been imploded in this suit and an adjudication is to take place in their presence. No such adjudication in the presence of the Haryana or Chandigarh or Daman Sales Tax Authorities has been undertaken by the Delhi Sales Tax Authorities and there is, therefore, violation of fundamental principles i.e. natural justice. As fundamental principles have not been followed as stated in Secretary of State v. Mark & Co. (AIR 1940 P.C. 105), the suit lies in the Civil Court to challenge the validity of Section 67 of the Act and the assessments.

(13) That brings us to the issue of jurisdiction of the Civil Court. Now in so far as the plaintiff proposes to challenge the validity of Section 67 of the Act, which debars the jurisdiction of the Civil Court, we are of the view, it is open to a litigant, - having regard to Section 9 of the Code of Civil Procedure - to challenge the validity of Section 67 of the Delhi Sales Tax Act, 1975 in a Civil Court. Suffice it to say, at this stage, that the learned Counsel for the plaintiff has not been able to make out any prima facie case as to why Section 67 is liable to be struck down. In Kamla Mill's case it was held towards the end of the judgment that a civil suit lies to declare any provision in a statute - including the one barring jurisdiction of the Civil Court as ultra vires.

(14) It is common legislative practice in this country to create an appropriate authority for adjudication of disputes - particularly in regard to to taxes (e.g. Sales-tax, Income-tax, Central Excise etc.) and when such authority is constituted and Appellate Authorities arid a judicial Tribuanal to hear further appeals are constituted, the said procedure does not prima facie violate Article 14 of the Constitution nor the basic principles of rule of law. It is true that the authorities or Tribunals cannot decide the questions relating to the validity of any provisions of the statute and it is only a Civil Court or a High Court exercising jurisdiction under Article 226 (or the Supreme Court under Article 32) that can decide about the validity of the statutory provisions. But, merely because the Civil Court can decide about the validity of Section 67 of the Delhi Sales Tax Act, 1975 ousting the jurisdiction of the Civil Court, it does not mean the Civil Court can straightaway proceed on the basis that Section 67 is ultra vires. A prim fade case has to be made out to say that the provision is ultra vires of legislative powers of the Legislature or is ultra vires of any constitutional provision or is violative of any Fundamental Rights. Firstly, we do not think there is prim fade any want of power in Parliament while enacting Section 67 of Delhi Sales Tax Act, 1975. Secondly no other provision of the Constitution is referred to before us to say that Section 67 is' otherwise ultra vires of such a provision. Nor has any provision in Part Iii of the Constitution brought to our notice to say that the bar to approach the Civil Court created by Section 67 prima facie offends any fundamental right. We do not therefore think that merely because the plaintiff is proposing to attack Section 67, the Civil Court should straightaway ignore the said bar created by Section 67 and proceed with the suit and the interlocutory application. A very strong case has to be made to enable a Civil Court, where jurisdiction is ousted by a statutory provision, to ignore the same or to suspend the same, pending suit and proceed to decide issues barred by the statute. We, therefore, hold that the proposed attack on Section 67 cannot by itself, without a strong case, enable the Civil Court (here, the Delhi High Court, in its original jurisdiction) to entertain and proceed with the suitor with the injunction applications filed therein.

(15) The next question is with regard to the power of the Civil Court to set aside the assessments made under the Act.

(16) The law in this behalf is too well settled to admit of any doubt. Though large number of rulings have been cited before us by both sides, we shall refer to those which are relevant. At the outset, we would like to refer to the well settled legal principles. These principles have been summarised in Principles of Statutory Interpretations by Justice G.P. Singh (5th Ed, 1993)(P. 433 at P. 436 to 439): "In Income-tax and Sales Tax Acts, it is common to find provisions to the effect that 'no suit shall lie to challenge an assessment made under the Act shall be called into question in any Court except as otherwise provided in the Act'. In Raleigh Investment Co. v. G.G. in Council Air 1947 Pc 78, p. 81; See further, Commr. of Income tax v .Tribune Trust . The Privy Council construing a provision of this nature (Section 67 of the Income-tax Act, 1922 (held that an assessment could not be challenged in Civil Court on the ground that it was based on a provision of law which was ultra vires. It was pointed out that the correct meaning of the phrase 'assessment made under the Act' is an assessment finding its origin in any activity of the assessing officer acting as such, and that an assessment under the machinery of the Act relying on a provision which is later found ultra vires is not a nullity but only erroneous in law. This Privy Council decision has not been accepted by the Supreme Court. In K.S. Venkatraman & Co. v. State of Madras, it was held by the Supreme Court that an assessment which is based on a charging section which is ultra vires is not an assessment under the Act, and a suit to challenge such an assessment is not barred. It was also held that assessing authorities cannot entertain a question relating to validity of the Act, and hence, it is open to a Civil Court to entertain and decide such a question not with standing that assessment has already been made. This case was followed in Dhulabhai v. State of Madhya Pradesh, . See further, Cit v. Straw Products, ; Even the High Court in a reference and the Supreme Court in appeal against the order passed in reference cannot decide the question of the validity of the Taxing Act and a statutory order issued under it. See also State of Tripura v. Province of East Bengal, ; and State of Bombay v. Jagmohandas, ; a suit to restrain an assessment on the ground that the Taxing Act is ultra vires is not barred. Where assessment was based not 'under the Act', and could be challenged by a suit in Civil Court, Income Tax and Sales Tax Acts, however, contain an elaborate machinery for assessment and for termination of questions of fact and law arising in assessment proceedings and an assessment cannot be questioned except in the manner provided under the Act on the ground that it is erroneous in fact or in law. Titaghur Paper Mills Co. Ltd. v. State of Orissa, . Thus, if purchases only and not sales can be taxed, a suit challenging an assessment is not maintainable on the ground that the transactions taxed were sales and they were wrongly held to be purchases by the assessing authorities Kamala Mills Ltd. v. State of Bombay, . In Provincial Govt. of Madras v. J. S. Basappa, where there was only a finality clause but no express bar to challenge an assessment a similar suit was held to be maintainable. Basappa's case supra was disapproved in State of Kerala v. Ramaswami, , but the correctness of the disapproval was doubted in Dhulabhai v. State of M.P., . Similarly if sales taking place inside a State are alone taxable, a suit to challenge the assessment is not maintainable on the ground that the sales were in factorize sales and were wrongly held to be inside sales State of U.P. v.Yodavendra Air 1966, p. 731. In this connection it must be kept in mind that speaking generally the taxing authorities have authority to decide finally even collateral questions of fact and law touching their jurisdiction. The factors that liability to pay income-tax or sales tax is a creature of the taxing Act which normally provides an elaborate machinery for assessment; that the taxing authorities have in general authority to decide finally questions of fact and law pertaining to their own jurisdiction; and that these Acts usually contain an exclusionary provision expressly restraining a suit to challenge an assessment made under the Act, leave little room for a suit to challenge anassessment. In addition to the case where assessment is based on an ultravires provision, assessment may also be open to challenge on the ground that It was made in violation of fundamental principles of judicial procedure e.g.without any notice to the assessee.A provision enacted in terms: 'No order made in exercise of any power conferred by or under this Act shall be called in question in any Court',assumes that the order is made in exercise of the power, which clearly leaves it open to challenge on the ground that it was not made in conformity with the power conferred. Collector of Kamrup v. Kamakhya Ram, ; Emperor v. Shibnath Banerji ; Emperor v.Vimalabai Deshpande ; but see Bhagwat Bakse v.Secretary of State . Similarly a provision using theformula: 'No order or decision under this Act shall be called in question in anyCourt' will not stand in the way of a suit challenging an order or decision when the order or decision is really not an order or decision under the Act buta nullity Anisminic Ltd. v. Foreign Compensation Commission, (HL)(Rajendra Prakash Sharma v. Gyan Chandra, <(1969) I All ER 208A href="javascript:fnOpenGlobalPopUp('/citation/crosscitations.asp','','1');">, Union of India v. Tarachand, ; Ramsarup v.Shikharchand, , pp. 897,898; Bhupendra Singh v. G.K. Umath,, . Therefore, when there is a non-compliance with fundamental provisions of the Act or fundamental principles of judicial procedure which makes proceedings before the Tribunal or authority illegal and void, a civil suit to challenge the order or decisions passed in such a proceeding is not barred. Secretary of State v. Mask b Co , as explained in Firm of Illuri Subbayya Chetty & Sons v. State of A.P.,, which is further referred in Provincial Govt. of Madras v. J.S. Basappa, ; Custodian of E.P. v. JafranBegum, ; Dhulabhai v. State of M.P., ; State of Tamil Nadu v. Ramlinga Samigal Madam, ; Gurbax Singh v. The Financial Commmissioner, .The reason is that an order or a decision which is a nullity or void, is not an'order or a decision under the Act' and jurisdiction of the Civil Court to challenge such an order is not barred by the exclusionary provision using the above formula. See cases in note 15 supra. For fuller discussion of nullity cases see under title 20(b) 'cases of nullity'. For the same reason when an order is required to be passed on subjective-satisfaction of an authority is to existence of certain matters, a satisfaction based on wholly irrelevant grounds is regarded as no satisfaction and the order based on it can be challenged in a Court in spite of the exclusionary clause providing that the satisfaction of the authority "shall be final and conclusive and shall not be questioned in any Court of law. State of Rajasthan & Others v. Union of India, .

(17) From the above principles, it is clear that while a Civil Court has jurisdiction to decide the validity of an assessment where the taxing provisions of the statute or a notification made thereunder is challenged as ultra vires, no suit lies on the ground that the assessment is erroneous in fact or law. If sales taking place inside a State alone are taxable, a suit to challenge the assessment is not maintainable on the ground that the sales were in fact outside sales and were wrongly held to be inside sales. This aspect is very clear for Kamla Mills case rendered by a Bench of Seven Judges where the identical question was so decided.This was followed in State of Kerala v. Ramaswami, .

(18) Learned Counsel for plaintiff-respondent has made elaborate submissions in regard to Kamla Mills case . But it has to be noticed that in that case the Supreme Court clearly held that the decision whether a transaction is an inside sale or not as per the Bombay Sales Tax Act, is indeed not a decision ona 'collateral' fact which can be gone into by a Civil Court. The principle that by wrongly deciding a collateral fact, an authority.or Tribunal can not confer jurisdiction on itself, is not applicable. The Court said : "....WEfind it impossible to accept Mr. Sastri's argument that the finding of the Appropriate Authority that a particular transaction is taxable under the provisions of the Act, is a finding on a collateral fact which gives the appropriate authority jurisdiction to take a further steps and make the actual order of assessment".

The whole activity of assessment from the filing of the return to the assessment falls within the officer's jurisdiction and no part of it can be said constitute a collateral fact or activity.

(19) If that be the law decided by the Supreme Court, then the fact that the period there related to 1950-51, that the decision of the Supreme Court in Bengal immunity case (1955(2) Sc p. 603) came later, that subsequently, the provisions of Article 286 of the Constitution were amended in 1956 and the Central Sales Tax Act,1956 was enacted, in our opinion, make no difference. These aspects have no relevance to the principle whether the issue is a collateral one or not.

(20) The further contention that Section 20 of the Bombay Act 1946 is different in language from Section 67 of the Delhi Act has no substance. Section 20 of the Bombay Act read: "SECTION20. Save as otherwise provided in Section 23, no assessment and no order passed 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 it provided in Sections 21 and 22,no appeal or application for assistance shall be against any such assessment order."

We are unable to find any substantial difference between Section 20 of the Bombay Act and Section 67 of the Delhi Act. Though the language is different, the substance is the same. As long as a decision as to whether a sale is an inside sale or outside sale is not a decision on a collateral fact relating to jurisdiction -as held by the Supreme Court in Kamla Mills' case - there is no way that plaintiff can question the assessment contending that the decision on merits by the assessing authority is ona collateral issue and that it is a jurisdictional issue. This is so, notwithstanding the amendment to Article 286 of the Constipation of India in 1956. Merely because of the amendment, the decision of the Assessing Authority does not become a decision on a collateral issue relating to jurisdiction. The seven Judges judgment is binding on us on this aspect.

(21) It is then argued that Kamla Mill's case lays down exceptions, namely that where the taxing provision is ultra vires or where the fundamental procedure is notfollowed, the Civil Court can entertain the suit to set aside the assessment. Here it must be noted that so far as vires of the charging provision is concerned, there is no attack before us or before the learned Single Judge. Learned Counsel for the plaintiff failed to notice that attack to the validity of Section 67 of the Delhi Sales Tax Act is different from attack on the charging provisions of the said Act. If there is no attack upon the charging provisions, no question of vires of the assessment on that ground arises.

(22) So far as the assessment is concerned, it is true that if the fundamental procedure is not followed, the Civil Court can examine the contention that the assessment order is valid. But here the contention is that the order is passed without giving notice to the State/Union Territories of Haryana or Chandigarh or Daman which have already made assessments and which are said to have collected sale-tax from the plaintiff in relation to the same transaction. Learned Counsel submits that the Assessing Authority ought to have given notice to the above three States/Union Territories and decided the question whether there was a sale inside Delhi or not. It is pointed out that in the 7 Judges case (Kamla Mills), the Supreme Court did not overrule Secretary of State v. Mask & Co. as understood in Dhulabhai's case .

(23) We are of the view that there is a serious misconception in the contention.The sales-tax laws of the above three States/Union Territories are self-contained as are the sales-tax laws in Delhi. The Assessing Authority in Haryana might decide that the sales took place within Haryana but that decision cannot bind the Assessing Authority in Delhi. Likewise, the Assessing Authority in Delhi might decide that the sale is within Delhi. But such a decision is not binding on the Assessing Authorities in Haryana. The assessee, who is common to the proceedings, is entitled to contest the case in any of these 3 States. The assessee has his remedies of appeal under each of the State laws. The law does not contemplate an Assessing Authority to give notice to Assessing Authorities in various States which might be more than one, and which might consider that the same transaction was liable to sales-tax entitling them to make assessments in their respective States. The very scheme of levying sales tax by various States will come to a standstill if a procedure is to be adopted by the Assessing Authorities of any State of giving notice to other States. Each State is here exercising its own sovereign power of levying tax and it is not bound to exercise that power by issuing notices to various other States in connection with transactions which concern more than one State. Infact, in such a situation, the aggrieved party has a remedy of ultimately carrying the matter to the highest Court of the land, namely the Supreme Court of India, and have the conflict resolved. Therefore, the absence of a notice by the Assessing Authorities at Delhi to the State of Haryana or to other States does not bring the case within the principles laid down in Mask's case. There is no violation of any fundamental principle by the Delhi Assessing Authorities merely because they did not issue any notice to the Haryana Authorities or other States. Admittedly, so faras the assessee is concerned, the Delhi Authorities followed the principles of natural justice and there is, in fact, no submission that the assessment orders were passed without notice to the plaintiff. It is therefore clear that the case on hand does not come within the limited exceptions mentioned in Kamla Mills case or as accepted in Dhulabhai's case (.

(24) As per Kamla Mills case and Dhulabhai's case, there could also be a challenge that there is no provision in the Statute for a proper adjudication of theissues. But there is no such case pleaded or argued before us. We need not therefore refer to cases cited in regard to this aspect. In the latest decision of the Supreme Court inSrikant K. Jituri v. Corporation of City of Bulgaria, it has been held that the fact that the tax has to be paid for availing a remedy under the Act, is not a ground for contending that the remedy under the Act is notefficacious. If conditions are onerous, the party could move under Article 226 of the Constitution of India.

(25) Yet another principle decided in Kamla Mill's case and accepted inDhulabhai's case goes against the plaintiff. Sales-tax liability is a liability created by statute and is not a liability arising at common law. Matters relating to such special rights or liabilities created by special statutes can be agitated only by availing remedies provided in the said statutes. This principle has been explained in greater detail in the recent decision of the Supreme Court in Shiv Kumar Chadha v.Municipal Corporation of Delhi 1993(3) Scc 162:50 (1993) Dlt 492 (SC). The entire case-law, English and Indian, was reviewed and it was held that regulation of demolition of structures by Delhi Municipality was only a modification ofa common law right and hence in spite of the bar in Sub-clause (4) and (5) of Section 347-E of the Delhi Municipal Corporation Act, a Civil suit would be maintainable in certain situations and injunction under Order 39 Rule 1 Civil Procedure Code could be granted.But if the right or liability is created for the first time by Statute, the bar of suit wouldapply.

(26) We have dealt with the relevant rulings quoted by the Counsel on bothsides. Though some other decisions were cited, we do not think it necessary to refer to them because either they are not relevant or they refer to the same principles mentioned above.

(27) We, therefore, reject the submissions of the plaintiff and held that though the suit is maintainable for questioning the validity or Section 67 of the Act, there is no challenge to the charging provisions of the Delhi Act. Further no prima facie case is made out to say that Section 67 which ousts the jurisdiction of Civil Court is bad. Though the plaintiff could contend that in the assessment proceedings,fundamental principles were not followed, no such violation was prima facie pointed out. The fact that the States of Haryana or Union Territories of Chandigarh and Daman were not given notice by the Delhi assessing authorities is not a ground for saying that fundamental principles were not followed by the Assessing Authorities of Delhi. The law is settled that a decision as to whether a sale is an 'outsidesale' or 'inside sale' is not a collateral fact relating to jurisdiction. The Act provides adequate remedies and there is no compelling reason to resort to Civil Court on ground of want of adequate remedy. The Act creates a special liability not known to common law and the remedy is the one provided by the statute.

(28) The result is that prima facie there is no ground for granting injunction restraining the authorities from recovering the sales-tax assessed.

(29) The Learned Single Judge thought that a suit was maintainable if fundamental principles were not followed but did not say what principles were no.tfollowed so far as the plaintiff was concerned. In fact, he observed (see extract givenearlier) that at this stage it is not necessary to set out what fundamental principle were violated in the present case. This, in our opinion, is a wrong approach. At the stage of injunction application, plaintiff has to specify and point out a prima facie case of violation of fundamental principles. This has not been done. We have already held that it is not contemplated by law that the Delhi Assessing Authorities should give notice to the State of Haryana or Union Territories of Chandigarh andDaman. There is prima facie no violation of any fundamental principle of law orprocedure.

(30) For the aforesaid reasons, the temporary injunction granted by the learned Single Judge is liable to be vacated and is accordingly vacated. As the plaintiff has not chosen to pay Rs. 8 lakhs (4 lakhs per year) as per the arrangement arrived at between similar dealers and the Delhi State in connected cases, - inspite of an option given before us by the learned Counsel for the State - we are unable to pass any other order in favor of the plaintiff.

(31) In the result, the appeal is allowed and the injunction order passed by the learned Single Judge is vacated.