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Issues: (i) Whether section 20 of the Bombay Sales Tax Act, 1946 barred a civil suit challenging an assessment made under the Act on the ground that the assessment was without jurisdiction because the sales were outside sales protected by article 286 of the Constitution of India. (ii) Whether section 20, if construed as barring such a suit, was constitutionally invalid. (iii) Whether the suit was nevertheless competent to the extent it challenged the validity of section 20 itself.
Issue (i): Whether section 20 of the Bombay Sales Tax Act, 1946 barred a civil suit challenging an assessment made under the Act on the ground that the assessment was without jurisdiction because the sales were outside sales protected by article 286 of the Constitution of India.
Analysis: The words "assessment made under the Act" were held to be wide enough to include not only correct assessments but also erroneous assessments made by the appropriate authorities in exercise of their statutory jurisdiction. The scheme of the Act vested in the assessing authorities the power to decide whether transactions were liable to tax, and that determination was treated as part of the assessment process itself, not as a collateral fact. The contention that an erroneous conclusion about the taxability of the transactions made the assessment a nullity and therefore outside section 20 was rejected. The availability of statutory refund, appeal, revision, and rectification machinery also supported the construction that the civil court's jurisdiction was excluded.
Conclusion: Section 20 barred the suit for refund and the challenge to the assessment on the ground of want of jurisdiction failed.
Issue (ii): Whether section 20, if construed as barring such a suit, was constitutionally invalid.
Analysis: The Act provided an adequate statutory mechanism for refund and for testing the assessment by appeal, revision, and enlargement of time for sufficient cause. Since the statute contained machinery for redress, the wide exclusion enacted by section 20 did not offend the Constitution on the facts of the case. The constitutional challenge to section 20 therefore did not succeed.
Conclusion: Section 20 was upheld as constitutionally valid.
Issue (iii): Whether the suit was nevertheless competent to the extent it challenged the validity of section 20 itself.
Analysis: A provision barring suits against assessments could not, on its own terms, be used to defeat a direct challenge to its own validity. The challenge to section 20 was therefore technically maintainable, but that did not assist the appellant because the substantive claim for refund remained barred by the section once its validity was upheld.
Conclusion: The suit was technically competent only as a challenge to section 20 itself, but that did not affect the bar against the refund claim.
Final Conclusion: The assessment was treated as protected by the statutory bar, the civil suit for refund was incompetent, and the appeal failed.
Ratio Decidendi: Where a taxing statute confers on the assessing authority jurisdiction to determine taxability and provides an internal remedial scheme, a civil suit challenging the assessment as without jurisdiction is barred if the statute expressly excludes such suits, even when the assessment is alleged to be erroneous or based on mistake of law.
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