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SINHA
BHARTIA ELECTRIC STEEL CO. LTD. – Appellant
Versus
COMMERCIAL TAX OFFICER – Respondent
What is the scope of exemption under Section 5(2)(a)(ii) of the Bengal Finance (Sales Tax) Act, 1941? What is the authority and scope of amendment to a registration certificate under Section 7(4) of the Act? What is the appropriate remedy if the registration certificate amendment is challenged?
Key Points: - (!) The exemption under Section 5(2)(a)(ii) applies only to goods directly used in the manufacturing process, not for construction/maintenance of factory buildings and adjuncts. - (!) The amendment of the registration certificate is authorized under Section 7(4) of the Act, based on information received, including information from Government. - (!) The petitioner had an alternative remedy via revision under Section 20(3) of the Act; the application was dismissed without prejudice to other legal proceedings. - (!) Goods like building materials/fixtures used for construction or repair of buildings are not generally considered "intended for use in the manufacture of goods" for exemption under Section 5(2)(a)(ii). - (!) The court rejected the challenge to the amendment as authorized and upheld the construction of the statute; the petition was dismissed. - (!) Expert evidence may be needed to decide whether certain construction materials are directly required in the manufacturing process; in ordinary cases, such materials for buildings are not part of the manufacturing process. - (!) The amended certificate can delete exempted items if not warranted by the statute, and the prior exemptions may be corrected to reflect proper interpretation. - (!) The decision emphasizes not to compel continuation of exemptions that are not warranted by law, to avoid discrimination among dealers. - (!) The petitioner may pursue other legal avenues to establish rights if desired. - (!) The final order: rule discharged; no costs; without prejudice to other proceedings.
( 1 ) THE petitioner in this case is Messrs. Bhartia Electric Steel Co. , Ltd. It carries on the business of manufacturing steel casting, ingots, bars, rounds, flats and squares and selling the same after such manufacture. The petitioner is a registered dealer under Section 7 of the Bengal Finance (Sales Tax) Act 1941 (Bengal Act VI of 1941) hereinafter referred to as the 'act' ). Under Section 7 of the Act, no dealer, while being liable to pay tax under Section 4 of the Act, can carry on business unless he has been registered under the Act, and possesses a registration certificate. That is to say, a dealer whose turnover exceeds the taxable quantum and who had thus become liable to pay tax under the Act, must get himself registered and possess a registration certificate. The turnover of this particular company admittedly exceeds the taxable quantum and therefore it had to get itself registered. The petitioner company made application in the prescribed form. The application for registration 'for the year ending 31-12-1940 was made on 4-9-1941. The application was made by Nandalal Bhartia, one of the directors of the company, stating that the business was mainly wholesale
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