Constructive res judicata and invalid tax enhancement barred reopening final assessments and enforced only the sanctioned levy.

Constructive res judicata was not applied to bar writ petitions under Articles 32 and 226 where later assessment periods and distinct grounds were involved, so the assessees could raise new challenges. A levy at an enhanced rate could not be sustained without the prior sanction required by the governing local self-government law, and only the sanctioned rate could be recovered unless the statutory enhancement procedure was followed. Completed assessments treated as final under the rules could not be reopened in the absence of express authority, so reassessment of already final periods was impermissible.

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Issues: (i) whether constructive res judicata barred the assessees from challenging the impugned demand notices in petitions under Articles 32 and 226 of the Constitution of India in respect of later assessment periods; (ii) whether the levy at 9 pies per ton was valid when the enhanced rate had not obtained the previous sanction required by Section 51(2) of the Central Provinces Local-Self Government Act, 1920; and (iii) whether the respondent could reopen assessments already made and treated as final under Rule 10 of the Rules framed under the Central Provinces Local-Self Government Act, 1920.

Issue (i): whether constructive res judicata barred the assessees from challenging the impugned demand notices in petitions under Articles 32 and 226 of the Constitution of India in respect of later assessment periods

Analysis: The earlier decision had determined the validity of notices for an earlier period, but the present proceedings concerned liability for different later periods and rested on distinct grounds. Constructive res judicata, being an artificial extension of the doctrine embodied in section 11 of the Code of Civil Procedure, was not to be mechanically applied to writ petitions under Articles 32 and 226, particularly where the challenge related to separate yearly liabilities and the earlier refusal to permit one contention to be raised did not amount to its decision on merits.

Conclusion: The bar of constructive res judicata did not apply, and the assessees were not precluded from raising the new grounds.

Issue (ii): whether the levy at 9 pies per ton was valid when the enhanced rate had not obtained the previous sanction required by Section 51(2) of the Central Provinces Local-Self Government Act, 1920

Analysis: Section 51(2) required previous governmental sanction for the first imposition of the tax, and in the context of the statutory scheme and the absence of any subsisting maximum rate under the Rules, the expression was construed to include an increase in the rate at which the levy was continued. The record showed that the later enhancements were made by the local authority itself and not with the required previous sanction. A levy at an enhanced rate without such sanction could not be sustained.

Conclusion: The demand at 9 pies per ton was invalid, and the respondent could levy only at the sanctioned rate of 3 pies per ton unless the statutory procedure for enhancement was followed.

Issue (iii): whether the respondent could reopen assessments already made and treated as final under Rule 10 of the Rules framed under the Central Provinces Local-Self Government Act, 1920

Analysis: The scheme of the Rules required periodic assessment, notice, objection, consideration of objections, and final determination, with Rule 10 declaring the assessment final where no objection was filed and the Board's decision final where objections were decided. In the absence of any provision authorising reopening, completed assessments could not be revived merely because the respondent later sought to include exported coal in the tax base for periods already assessed.

Conclusion: Reopening of assessments already finalized under Rule 10 was impermissible.

Final Conclusion: The assessees succeeded on the substantive challenges, and the notices demanding tax at the enhanced rate and reopening completed assessments could not be enforced.

Ratio Decidendi: Constructive res judicata does not ordinarily bar writ petitions under Articles 32 and 226 where the later challenge concerns a different period and distinct grounds, and a tax levy or reassessment contrary to the mandatory statutory procedure and finality provisions cannot be sustained.

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