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2002 Supreme(Cal) 291
High Court Of Calcutta
Amitava Lala
VIJAYASHREE LIMITED - Appellant
Versus
STATE OF WEST BENGAL - Respondent
T. 161 Of 2002
Decided On : 04/30/2002
P.K.MULLICK, Sajal Das, UTPAL MAJUMDAR
The provisions of the West Bengal Sales Tax (Settlement of Disputes) Act, 1999 and rules are directory and not mandatory in nature.
Headnote:
WEST BENGAL SALES TAX (SETTLEMENT OF DISPUTES) ACT, 1999 - SECTION 5(1)(A) AND 5(1)(B) - COURT HELD THAT THE PROVISIONS OF THE ACT AND RULES ARE NOT MANDATORY BUT DIRECTORY IN NATURE AND GRANTED EXTENSION OF TIME FOR PAYMENT OF ADMITTED TAX BEYOND THE CUT-OFF DATE.
Fact of the Case:
The petitioner company, a sick company under the Sick Industrial Companies (Special Provisions) Act, 1985, sought a loan from the State Government to cover disputed sales tax under the West Bengal Sales Tax (Settlement of Disputes) Act, 1999. The State Government sanctioned a loan of Rs. 734 lakhs, but the petitioner could not pay the admitted tax of Rs. 1,30,43,678/- within the cut-off date of 31st December 2001 due to delay in execution of documents by the government authorities.
Finding of the Court:
The court found that the purpose of the Act and rules was to enable parties to settle disputes with the authorities and increase revenue earning, and that the Act could be considered an amnesty scheme. The court also noted that the cut-off date had been extended previously and could be extended again by the State Government.
Issues: Whether the provisions of the West Bengal Sales Tax (Settlement of Disputes) Act, 1999 and rules are mandatory or directory in nature.
Ratio Decidendi: The court held that the provisions of the Act and rules are directory and not mandatory. The court reasoned that the purpose of the Act was to settle disputes and increase revenue earning, and that the time period under the Act was not intended to be strictly mandatory. The court also considered the fact that the cut-off date had been extended previously and could be extended again.
Final Decision: The court allowed the petitioner to pay the admitted tax of Rs. 1,30,43,678/- beyond the cut-off date of 31st December 2001. The court directed the West Bengal Industrial Development Corporation to transfer the amount to the Sales Tax Authorities within a period of fortnight from the date of communication of the order.
( 1 ) THE petitioner No. 1 presently is a sick company under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985. The petitioner No. 2 claims to be the Director of the company. He verified the affidavit in support of the writ petition. Affidavit of competency duly filed by the petitioner No. 2.
( 2 ) THE contention of the writ petitioners is that the BIFR sanctioned a scheme for revival of the petitioner company by an order dated 30th June, 2000. On 5th April, 1999 an Act being West Bengal Sales Tax (Settlement of Disputes) Act, 1999 came into force. Consequently, respective Rules came into force on 12th July, 2000. Under the order of the BIFR the scheme has been provided grant soft loan by the Government of West Bengal to cover disputed Sales Tax which is under appeal, if the company are ordered to pay at concessional rate of interest prescribed in the incentive scheme of 1999. On 4th December, 2000 the petitioner requested the appropriate respondent to grant sales tax loan. On 3rd September, 2001 State Government sanctioned loan for a sum of Rs. 734 lakhs (Rupees Seven crores thirty four lakhs only) through the West Bengal Industrial Development Commission to pay the admitted arrear taxes. On 3rd September, 2001 itself the petitioner made an application for exemption of stamp duty which is payable for exemption of bond which is required before availing the said loan of Rs. 734 lakhs.
( 3 ) IN between 2nd November, and 27th December of 2001, the petitioners filed 23 applications under section 5 of the West Bengal (Settlement of Disputes) Act, 1999. Such applications were made before the appellate authority. According to the learned counsel appearing for the Sales Tax Authority, on 27th December, 2001 the State Government passed order of exemption of stamp duty payable on bond to be executed by them. 31st December, 2001 was the last date for filing application as well as payment for admitted sales tax dues as per the aforesaid Act. Two days before, on 29th December, 2001 the petitioner No. 1 company wrote a letter to the Additional Commissioner of Commercial Tax as the applications filed by the petitioner under the Act and are pending, they are required to pay a sum of Rs. 1,30,43,678/- (Rupees One crore thirty lakhs forty three thousand and six hundred seventy eight) only as admitted tax but since the State Government has not disbursed the loan, the said applications may be kept pending considering that the petitioner No. 1 is a sick company. After various correspondence and after execution of the bond in between State Government and the West Bengal Industrial Development Corporation on 25th February, 2002, the petitioner receive a letter from Industrial Reconstruction Department to the effect that the Commissioner of Commercial Tax is not agreeable to receive the said amount of rs. 1,30,43,678/- against payment of admitted tax. The said Commissioner has asked entire amount of Rs. 734 lakhs due and payable in this account. Incidentally it is necessary to state hereunder, the petitioner wanted to pay a further sum of Rs. 72,65,820/- (Rupees Seventy two lakhs sixty five thousand and eight hundred twenty) only in addition to s. 1,30,43,678/- totalling to Rs. 2,03,09,498/- (Rupees Two crores three lakhs nine thousand four ninety eight) only.
( 4 ) THE petitioners contended that the company was sick. The revival is proposed by the BIFR. The state was approached for the purpose of granting loan of Rs. 734 lakhs in favour of the Commissioner of Commercial Taxes. Time to made payment expired not for the petitioners but for the delay in execution of documents by the two governmental authorities which was beyond control of the petitioners. Necessary applications were made within the time. Therefore, only requirement is acceptance of the amount by the Sales Tax Authorities. If out of 734 lakhs Rs. 1,30,43,678/- is sanctioned the petitioners cannot be held responsible for the same because th
