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1984 Supreme(Cal) 306
High Court Of Calcutta
M. N. Roy, Amarendra Chandra Sengupta
STATE OF WEST BENGAL - Appellant
Versus
HIND TEA COMPANY (P.) LTD - Respondent
F. M. A. 362 Of 1978
Decided On : 08/24/1984
ALO CHAYA SIL, DEBASH CHANDRA MUKHERJEE, Jayanti Mukherji, SAMARENDRA NATH DUTTA
Headnote:
Whether the exemption under Rule 3(30) of the Bengal Finance (Sales Tax) Act, 1941, was rightly refused to the assessee-company since separate account sales statements and declaration forms from the broker were not produced by the assessee-company and they had failed and neglected to duly comply with such obligations. HELD dismissing the appeal: (i) Each assessment, be it under the Income-tax Act or under the Sales Tax Act, should be considered as separate proceedings and the decision arrived at in a previous assessment proceeding on the materials before a taxing officer cannot be regarded as binding in the assessment for subsequent years or in other words, in tax matters, the decision given in respect of one assessment year is not ordinarily binding in respect of a subsequent assessment year and that too even on the same question. (ii) The rule of res judicata or the principles analogous thereto would not ordinarily apply to taxing statutes and the more so when, an officer concerned with collection of revenue, would not be bound by such rule and would be entitled and competent to reopen the question, previously decided and come to a conclusion different from the earlier, subject of course to the limitations and restrictions as indicated. (iii) The case of the assessee-company would not come within the exceptions as indicated in the Division Bench determinations of the Bombay High Court in H. A. Shah and Co.'s case [1956] 30 ITR 618 and more particularly so, when an assessment for a particular year is final and conclusive between the parties in respect of the assessment for the year only and any assessment made for an earlier year would not be binding either on the assessee or the department in a subsequent year. (iv) The exemption in the instant case was appropriately refused as separate account and declaration forms from the said broker were not produced by the assessee-company and they had failed and neglected to duly comply with such obligations.
Fact of the Case:
The assessee-company, engaged in the business of tea cultivation and manufacture, sold tea at its own tea estates for sale, and they sold tea direct to their customers and also by auction through M/s. W. S. Cresswell and Company (P) Ltd., a broker-member of the Calcutta Tea Traders' Association. The assessee-company claimed deduction of Rs. 4,60,884.54 under Section 5(2)(a)(vi) of the Bengal Finance (Sales Tax) Act, 1941, read with Rule 3(30) of the concerned Rules. The claim for deduction was disallowed on the ground that the assessee-company had not produced separate account sales statements and declaration forms from the broker. On appeal, the assessee-company contended that they had produced the consolidated account sales statement and declarations from the broker and that was the requirement of the concerned Rules. The appellate authority held otherwise and dismissed the appeal.
Finding of the Court:
The Court held that the exemption in the instant case was appropriately refused as separate account and declaration forms from the said broker were not produced by the assessee-company and they had failed and neglected to duly comply with such obligations. The Court further held that the case of the assessee-company would not come within the exceptions as indicated in the Division Bench determinations of the Bombay High Court in H. A. Shah and Co.'s case [1956] 30 ITR 618 and more particularly so, when an assessment for a particular year is final and conclusive between the parties in respect of the assessment for the year only and any assessment made for an earlier year would not be binding either on the assessee or the department in a subsequent year.
Issues: Whether the exemption under Rule 3(30) of the Bengal Finance (Sales Tax) Act, 1941, was rightly refused to the assessee-company since separate account sales statements and declaration forms from the broker were not produced by the assessee-company and they had failed and neglected to duly comply with such obligations.
Ratio Decidendi: The rule of res judicata or the principles analogous thereto would not ordinarily apply to taxing statutes and the more so when, an officer concerned with collection of revenue, would not be bound by such rule and would be entitled and competent to reopen the question, previously decided and come to a conclusion different from the earlier, subject of course to the limitations and restrictions as indicated.
Final Decision: Appeal dismissed.
( 1 ) THE State of West Bengal and other authorities under them and belonging to the Commercial Tax Department, who were respondents Nos. 1 to 4 in Civil Rule No. 2941 (W) of 1970, have impeached in this appeal a determination made on 22nd April, 1975, in the said civil rule.
( 2 ) RESPONDENT No. 1, in this appeal who was petitioner in the said rule, moved and obtained the same on 8th May, 1970, challenging the assessment order and demand notice for the year ending 31st December, 1966. The particulars of the said assessment order and the concerned demand notice would be disclosed hereafter. The petitioners in the rule, viz. , M/s. Hind Tea Company Limited, who as mentioned hereinbefore, are respondent No. 1 would hereinafter referred to as the said company.
( 3 ) IT was claimed that the said company was a public limited one and their original name was "hindoo Tea Company Limited" and subsequently such name was changed to the name of the said company as mentioned hereinbefore, in July, 1949. The said company has further been stated to be a registered dealer under the provisions of Bengal Finance (Sales Tax) Act, 1941, as amended (hereinafter be referred to as the said Act ). It has also been stated that the business of the said company was and is mainly the growing and manufacture of tea at its own tea estates, for sale, and they sell tea direct to their customers and also by auction through M/s. W. S. Cresswell and Company (P) Ltd. , who were respondent No. 5 in the rule, and who were not appearing in this appeal, in terms of or in accordance with the age-old rules, regulations, practice, procedure, convention, custom and usages for the necessary auction sales as framed and/or followed by the Calcutta Tea Traders' Association, who were respondent No. 6 (hereinafter be referred to as the said association) in the rule and who are not also appearing in this proceeding. It has also been stated that the said respondent No. 5, is a broker-member of respondent No. 6 as mentioned above and they are hereinafter be referred to as the said broker and the said Association respectively.
( 4 ) THE said company has also stated that following such age-old practice as mentioned above and which according to them has continued for more than 100
years, since the inception of the said association, they have consigned to the said broker, various number of chests containing tea on the basis of the issue of pro forma invoices to the said broker, and thereafter, the said broker, like the other broker-members of the said association, conducted the auction sales for such tea as mentioned above, in one or more than one lots and issued one "accounts sales statement" to the said company in respect of each of the concerned pro forma invoices. Such accounts sales statement, according to the said company, would show firstly, gross sale proceeds for all the chests of tea sent by the said company under a particular invoice and sold in one or various lots by the said broker, secondly, the service and/or selling charges incurred by the broker relating to some pro forma invoices, some of which are computed at fixed rate irrespective of number of chests sold in lots covered by the concerned accounts sales, thirdly, brokerage payable to the said broker and fourthly, the net proceeds receivable by the said company in respect of the concerned pro forma invoices. It was the further case of the said company that they as usual, on 10th May, 1966, filed the return in form IIIA of Section 10 of the said Act and the Rules as framed thereunder for the year ending 31st December, 1965, showing gross turnover and taxable turnover according to their books of account and other documents, which were and are maintained in the usual course of business and the tax payable on such return according to the said company was Rs. 231. 40 only.
( 5 ) IT would appear that in that return as aforesaid, a true copy whereof was annexed as annexure C to the petition of motion,
