Dhulabhai v. State of M.P.

Dhulabhai lays down clear tests on when civil court power is excluded by a special statute (like a tax law) and when refund suits lie. Tobacco dealers in Ujjain challenged sales tax collected under notifications later held void. The Supreme Court said the suits were maintainable because the levy lacked proper legal backing. It also explained how to read “finality” clauses, writ remedies under Article 226, and refund machinery in the statute.

• Is a civil suit barred by the Act (expressly or by necessary implication)?
• Should repayment of illegally collected tax be sought in a civil court or by writ under Article 226?
• Do tax authorities have power to decide the nature of the transaction, or is that a collateral issue beyond them?

• Section 9 CPC: Civil courts can try all civil disputes unless a statute clearly bars them.
• Even with appeals/revisions under a special Act, if charging provisions fail or notifications are void, civil suits for refund may lie.
• “Finality” clauses may exclude civil courts only when adequate remedies exist and due process is followed. They do not cover breaches of fundamental judicial procedure.
• When no refund machinery exists in the Act, a civil suit is open.
• Questions of constitutionality of the Act cannot be decided by tribunals under that Act.

The Supreme Court held that the civil suits were maintainable. Where a levy is without proper authority or the Act lacks a refund process, a civil suit for refund lies. The Court listed structured tests for when civil court jurisdiction is excluded and clarified that writs may grant refund but do not necessarily replace suits.

• Exclusion of civil court is not readily inferred; look for express words or necessary implication plus adequate remedies.
• No bar where the Act is not followed, basic judicial procedure is ignored, or refund machinery is missing.
• Tribunals under an Act cannot test that Act’s constitutionality.

Dhulabhai is the go-to map for navigating special statutes. It guards access to civil courts when levies are illegal and prevents “finality” clauses from hiding procedural unfairness.

• Check for express bar and the Act’s overall scheme.
• No refund path in the Act → civil suit possible.
• Writs can help but do not always replace suits.

Mnemonic: BAR–REMEDY–REFUND

1. Is there a clear bar (words or necessary implication)?
2. Is the statutory remedy adequate and followed?
3. If refund machinery is missing or levy is void → civil suit/ refund.

Issue: Are civil suits for refund barred by the Sales Tax Act scheme?

Rule: Civil court power stands unless expressly/implicitly barred with adequate remedies; no bar for void levy or absent refund machinery.

Application: Notifications void; levy lacked full authority; Act did not offer a complete refund path → suits lie.

Conclusion: Suits maintainable; Dhulabhai tests govern future cases.

Exclusion of Jurisdiction

When a special statute limits civil court power and routes disputes to a tribunal.

Charging Section

The core provision that imposes a tax; without it, levy fails.

Finality Clause

Text stating tribunal decisions are final; read with limits set by Dhulabhai.