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1989 Supreme(Cal) 466
High Court Of Calcutta
Prabir Kumar Majumdar
ABN FOOD AND BEVERAGE PVT.LTD. - Appellant
Versus
ASSISTANT COMMISSIONER OF COMMERCIAL TAXES - Respondent
Matter 4013 Of 1988
Decided On : 09/18/1989
Bhaskar Gupta, J.C.SAHA, S.N.BOSE, Sudipta Bose
The exemption from tax granted under Notification No. 1177-F. T. dated 31st March, 1983, issued under Section 4aa of the West Bengal Sales Tax Act, 1954, covered turnover tax and the petitioner was not liable to pay turnover tax during the period of tax holiday.
Headnote:
TAX HOLIDAY - WEST BENGAL SALES TAX ACT, 1954 - SECTION 4AA - NOTIFICATION NO. 1177-F. T. DATED 31ST MARCH, 1983 - EXEMPTION FROM TAX - TURNOVER TAX - DECLARATION FORMS - REFUND OF TURNOVER TAX:
Fact of the Case:
The petitioner, a small-scale industrial unit manufacturing biscuits, challenged the imposition of turnover tax during the period of tax holiday and the refusal of declaration forms by the commercial tax authorities for non-payment of turnover tax. The petitioner also sought a refund of the turnover tax collected by the authorities during the period of tax holiday.
Finding of the Court:
The court held that the exemption granted by the notification to the petitioner covered turnover tax as well and that the petitioner was not under any obligation to pay turnover tax during the tax holiday. The court also held that the respondent-authority was not entitled to refuse and withhold the issue of declaration forms on the ground that no payment of turnover tax had been made.
Issues: 1. Whether the exemption from tax granted under Notification No. 1177-F. T. dated 31st March, 1983, issued under Section 4aa of the West Bengal Sales Tax Act, 1954, covered turnover tax? 2. Whether the petitioner was liable to pay turnover tax during the period of tax holiday? 3. Whether the respondent-authority was entitled to refuse and withhold the issue of declaration forms on the ground that no payment of turnover tax had been made?
Ratio Decidendi: 1. The court interpreted the expression "no tax shall be payable" in the notification to include turnover tax. The court reasoned that turnover tax was a tax on sales and that the notification exempted all taxes of whatever nature that may be chargeable under the Act. 2. The court held that the petitioner was not liable to pay turnover tax during the period of tax holiday because the notification granted a total exemption from payment of any tax. 3. The court held that the respondent-authority was not entitled to refuse and withhold the issue of declaration forms on the ground that no payment of turnover tax had been made because the petitioner was not liable to pay turnover tax during the tax holiday.
Final Decision: The court directed the respondent-authority to amend the eligibility certificate issued to the petitioner to make the benefit effective from the date of first sale, namely, 16th November, 1985. The court also directed the respondent-authority to issue the declaration forms to the petitioner and to refund the turnover tax paid by the petitioner under protest. The court further held that the petitioner was not liable to pay any turnover tax so long as the eligibility certificate was in operation.
( 1 ) BY this writ application the petitioner-company is asking for a direction upon the respondent No. 1 to allow the benefit of exemption of tax holiday as contemplated in the Notification being No. 1177-F. T. dated 31st March, 1983, issued under Section 4aa of the West Bengal Sales Tax Act, 1954 (hereinafter referred to as "the said Act") from 16th November, 1985, instead of 4th February, 1986. By this application the petitioner has also challenged the imposition or demand of "turnover tax" during the period of tax holiday and also refusal or withholding of declaration forms by the commercial tax authorities for non-payment of "turnover tax" during the relevant period of tax holiday. The petitioner is also asking for refund of the turnover tax collected by the authorities during the period of tax holiday.
( 2 ) THE petitioner has set up a small-scale industrial unit (hereinafter referred to as "the said unit") at Mangalbari in the district of Maldah, West Bengal, for manufacturing biscuits, a notified commodity under Section 25 of the said Act. The petitioner's said unit was duly registered with the Director of Cottage and Small-scale Industries on 3rd January, 1987, as a small-scale industrial unit for manufacturing biscuits. The petitioner is a dealer within the meaning of Section 28 of the said Act and as also a registered dealer under the Central Sales Tax Act.
( 3 ) THE petitioner's said unit started manufacturing the said notified commodity, i. e. , biscuits for the first time after 1st April, 1980 and first sale of such notified commodity, viz. , biscuits by the said unit was made on 16th November, 1985.
( 4 ) THE respondent No. 5, the State of West Bengal, in exercise of the powers conferred upon it under Section 4aa of the said Act by a Notification No. 1177-F. T. dated 31st March, 1983, made representation to the public that the exemption from tax will be allowed to any dealer, who has sold notified goods manufactured by it in its newly set up small-scale industry. The said notification, inter alia, provided that such exemption would be allowed during a period of five years since the date of first sale of its manufactured notified goods on fulfilling certain conditions set out in the said notification.
( 5 ) THE petitioner in order to avail itself of the said benefit of tax holiday as provided for in the said notification, made an application for an "eligibility certificate" on 4th February, 1986, to the Assistant Commissioner, Commercial Tax, South Circle, the respondent No. 1. The said application was made, according to the petitioner, in due compliance of or in conformity with the conditions and terms contained in Section 4aa of the said Act read with the said Notification dated 31st March, 1983.
( 6 ) IT is further contended by the petitioner that on the said application dated 4th February, 1986, the respondent No. 1 issued an eligibility certificate being 4697/38/ (54)/bh/73/85-86 dated 4th August, 1986, in respect of the said unit but the same was made effective only from 4th February, 1986 to 3rd February, 1987, instead of 16th November, 1985, which according to the petitioner and not disputed by the respondents, is the date of the first sale of the said manufactured notified commodity.
( 7 ) IT is also the grievance of the petitioner that the commercial tax authorities withheld the issue of declaration forms on the alleged ground of non-payment of "turnover tax" although there is no liability to pay any tax in view of the benefit of exemption granted to it by the said notification. The petitioner made an application and also made representation from time to time before the respondent No. 2, the Commercial Tax Officer, Bhawanipur Charges, for issuance of the declaration forms and the petitioner produced statements and information and other related documents in this regard to the satisfaction of the respondent No. 2. As stated by the petitioner, the petitioner although not li
