Constructive res judicata and unauthorised tax enhancement: final assessments could not be reopened, and later demands failed.

Constructive res judicata did not bar writ challenges to tax notices for later assessment periods because the earlier proceedings concerned different years and had not decided the new grounds on merits. The enhanced levy at 9 pies per ton was invalid because the statutory requirement of previous sanction under section 51(2) extended to rate increases, and the record did not show sanction for the enhancement; recovery could proceed only at the sanctioned rate, if otherwise lawful. Final assessments under the rules could not be reopened by later notices, since the scheme treated completed assessments as conclusive and contained no separate reopening power. The impugned demands therefore failed.

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Issues: (i) whether a challenge to tax notices for later periods was barred by res judicata or constructive res judicata because similar questions had been decided in earlier writ proceedings; (ii) whether the levy at 9 pies per ton was valid in the absence of previous governmental sanction under section 51(2) and whether the rate could exceed the sanctioned 3 pies; (iii) whether the authority could reopen assessments already made and treated as final under the rules.

Issue (i): Whether a challenge to tax notices for later periods was barred by res judicata or constructive res judicata because similar questions had been decided in earlier writ proceedings.

Analysis: The earlier decision had decided only the questions actually raised for the earlier period. The present notices related to different assessment periods and the new grounds of challenge were distinct. The principle of constructive res judicata under section 11 of the Code of Civil Procedure, 1908 was not to be applied generally to writ petitions under Articles 32 and 226, especially where the dispute concerned different years and the earlier point had not been adjudicated on merits.

Conclusion: The bar of res judicata did not apply, and the new challenges were maintainable.

Issue (ii): Whether the levy at 9 pies per ton was valid in the absence of previous governmental sanction under section 51(2) and whether the rate could exceed the sanctioned 3 pies.

Analysis: Section 51(2) required previous sanction for the first imposition of the tax, and in the context of the scheme of the Act and rules, an enhancement of the rate was treated as falling within that requirement. Rule 3, which had originally fixed the rate at 3 pies per ton, had been deleted, so it could not support a levy at the old ceiling. The record did not show that the increases to 9 pies per ton had received the necessary sanction. The levy at the enhanced rate therefore lacked legal authority.

Conclusion: The levy at 9 pies per ton was invalid, and recovery could proceed only at the sanctioned rate of 3 pies per ton, if otherwise permissible.

Issue (iii): Whether the authority could reopen assessments already made and treated as final under the rules.

Analysis: The rules provided a complete assessment scheme for each half-year and declared the assessment final once the prescribed process was completed. There was no separate power comparable to reopening provisions in income-tax law. Final assessments could not be unsettled by later notices demanding additional tax for the same periods after the assessments had attained finality under the rules.

Conclusion: Reopening of concluded assessments was impermissible.

Final Conclusion: The impugned demands failed on the merits because the enhanced levy was unauthorised and the earlier assessments for the relevant periods could not be reopened; the petitions and appeals were therefore allowed.

Ratio Decidendi: Constructive res judicata is not ordinarily applied to writ challenges concerning distinct assessment years, and a tax enhancement or fresh demand is invalid unless the statutory preconditions for sanction and reassessment authority are strictly satisfied.

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