Writ maintainability and export-sale exemption upheld for coal supply to East Pakistan under sales tax law

The rule requiring exhaustion of statutory remedies before invoking Article 226 is a rule of practice, not a jurisdictional bar, so the High Court may entertain a writ petition where facts are undisputed and interference on the merits is justified. The supply of coal to East Pakistan was treated as a sale in the course of export under section 5(2)(a)(v) of the Bengal Finance (Sales Tax) Act, 1941, and therefore fell outside the taxable turnover. On that basis, the levy of sales tax on the disputed coal supply could not be sustained and the exemption was upheld.

---

---

Issues: (i) Whether the writ petition was not maintainable because the respondent had not exhausted the statutory revisional remedy before approaching the High Court under Article 226; (ii) Whether the supply of coal to East Pakistan was exempt from sales tax as a sale in the course of export under section 5(2)(a)(v) of the Bengal Finance (Sales Tax) Act, 1941.

Issue (i): Whether the writ petition was not maintainable because the respondent had not exhausted the statutory revisional remedy before approaching the High Court under Article 226.

Analysis: The requirement to pursue statutory remedies before invoking writ jurisdiction is a rule of practice and not one of jurisdiction. Where the facts are not in dispute and the case calls for interference on the merits, the High Court may entertain a petition under Article 226 even though the party has not exhausted departmental remedies.

Conclusion: The writ petition was maintainable and the High Court rightly entertained it.

Issue (ii): Whether the supply of coal to East Pakistan was exempt from sales tax as a sale in the course of export under section 5(2)(a)(v) of the Bengal Finance (Sales Tax) Act, 1941.

Analysis: The transaction was connected with the supply of coal for consumption in East Pakistan under an arrangement between the Governments of India and Pakistan. Even assuming the precise contractual form of the sale, the sale, if any, fell within the statutory exemption because it was a sale in the course of export and therefore outside the taxable turnover under the Act.

Conclusion: The transaction was exempt from sales tax under section 5(2)(a)(v) of the Bengal Finance (Sales Tax) Act, 1941.

Final Conclusion: The levy of sales tax on the disputed coal supply could not be sustained, and the assessee was entitled to the exemption claimed.

Ratio Decidendi: The rule requiring exhaustion of statutory remedies before invoking writ jurisdiction is discretionary and does not bar maintainability where the High Court finds a fit case for interference, and a sale falling in the course of export is exempt from sales tax under the governing statutory provision.

---