Supreme Court overturns High Court decision, grants relief under Article 226, bars unconstitutional tax imposition

The Supreme Court allowed the appeal, holding that the High Court erred in dismissing the application for relief under Article 226. The Court directed the issuance of a writ restraining the State from imposing or authorizing the tax based on the unconstitutional Explanation II of the Central Provinces and Berar Sales Tax Act, 1947.

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Issues: Whether the appellant was entitled to relief under article 226 of the Constitution of India by way of mandamus restraining the State from enforcing a sales tax provision held ultra vires, notwithstanding the existence of a statutory remedy.

Analysis: The Explanation to section 2(g) of the Central Provinces and Berar Sales Tax Act, 1947, having been held ultra vires, any attempt to levy tax under it would be without authority of law and would threaten coercive action under the Act. In such a situation, the Court held that a writ of mandamus was an appropriate remedy to protect the appellant's fundamental right under article 19(1)(g) of the Constitution of India. The existence of a statutory remedy did not bar relief under article 226 where the complaint was of infringement of fundamental rights, and the deposit-based remedy under the Act was not an adequate alternative remedy.

Conclusion: The appellant was entitled to the writ sought, and the High Court erred in refusing relief under article 226 of the Constitution of India.

Ratio Decidendi: Where a tax is sought to be enforced under a provision already found ultra vires and the threatened enforcement infringes fundamental rights, the availability of a statutory remedy does not preclude a writ of mandamus under article 226.

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