The State of Jharkhand & Ors. v. M/S. Akash Coke Industries Pvt. Ltd.
Background
The respondent company bought coal within Jharkhand (paying State sales tax), converted it into coke, and sold the coke in an inter-state sale (paying Central Sales Tax). Since coal and coke are both "declared goods" of special importance under Section 14 of the Central Sales Tax Act, 1956, the company sought reimbursement of the State sales tax it had paid on the coal, under Section 15(b) of the Act, which allows such reimbursement when the same/related goods are later sold inter-state. The tax department resisted processing the refund on procedural grounds, so the company went to the Jharkhand High Court, which ruled in its favour and ordered reimbursement with interest; the State appealed to the Supreme Court.
Decision Breakdown
Before the Supreme Court, the State raised an entirely new argument for the first time: that coal and coke are legally different goods, so tax paid on coal purchase could not be reimbursed against tax paid on coke's inter-state sale. The Court examined the full record and found that this specific contention had never been raised at any earlier stage (not in the High Court writ proceedings, not in the counter-affidavits, not even in the departmental correspondence): the dispute there had only been about procedural refund formalities (which form to use, whether an excess-demand notice was required). Since the "coal is not coke" argument was a completely new case being set up for the first time in the Supreme Court, the Court held it could not entertain it at this late stage, and dismissed the State's appeals, upholding the reimbursement.
Lesson Learnt
A party cannot raise a brand-new factual or legal contention for the first time before the Supreme Court if it was never pleaded or argued in the courts below: litigation must proceed on the case actually set up and contested at the outset, not on fresh grounds invented later during appeal.