9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
1974 (11) TMI 76 - SC - VAT and Sales TaxWhether the sale of cigarettes after the enactment of the West Bengal Sales Tax (Amendment) Act 1958 is governed by the Bengal Finance (Sales Tax) Act 1941 and as such a dealer in the State of West Bengal is entitled to the benefits under section 5(2)(a)(ii) of the 1941 Act in making purchases free of sales tax of raw material and other goods required for use in the manufacture of cigarettes on the strength of such exemption entered in his registration certificate? Held that - Appeal allowed. After a conspectus and conjoint reading of the aforesaid enactments it seems to us clear that the 1954 Act did not repeal or obliterate the 1941 Act but only modified it by excepting cigarettes from its operation. During the interregnum between the enactment of the 1954 Act and the 1958 Act the operation of the 1941 Act with regard to cigarettes was in a state of mere interception and when as a result of the amendment made by the 1958 Act that exception or interception was removed the application of the 1941 Act to cigarettes revived proprio vigore. In any case definite indications of such revival are available in the language and scheme of the 1958 Act and the Bengal Act 13 of 1959.
Issues Involved:
1. Applicability of the Bengal Finance (Sales Tax) Act, 1941 (1941 Act) to the sale of cigarettes after the enactment of the West Bengal Sales Tax (Amendment) Act, 1958 (1958 Act). 2. Entitlement of the appellant to the benefits under section 5(2)(a)(ii) of the 1941 Act for purchases made for manufacturing cigarettes. 3. Interpretation and effect of the 1954 Act, 1958 Act, and other relevant enactments on the 1941 Act. Issue-wise Detailed Analysis: 1. Applicability of the Bengal Finance (Sales Tax) Act, 1941 (1941 Act) to the sale of cigarettes after the enactment of the West Bengal Sales Tax (Amendment) Act, 1958 (1958 Act): The central question was whether the sale of cigarettes after the 1958 Act was governed by the 1941 Act, entitling the appellant to benefits under section 5(2)(a)(ii) of the 1941 Act. The appellant, a dealer in cigarettes, argued that it should continue to benefit from the exemptions provided under the 1941 Act despite the amendments brought by the 1958 Act. The court examined the legislative history and the interplay between the 1941 Act, the 1954 Act, and the 1958 Act. The 1954 Act specifically targeted cigarettes, removing them from the purview of the 1941 Act. However, the 1958 Act further amended the 1954 Act, substituting the term "cigarettes" with "notified commodities" and introducing a new section 23, which stated that nothing in the 1941 Act shall apply to a notified commodity from the date of notification under section 25 of the 1954 Act. The court concluded that the 1954 Act did not repeal the 1941 Act but merely excepted cigarettes from its operation. The 1958 Act did not issue any notification under section 25 specifying cigarettes as a taxable commodity, implying that the 1941 Act continued to apply to cigarettes. 2. Entitlement of the appellant to the benefits under section 5(2)(a)(ii) of the 1941 Act for purchases made for manufacturing cigarettes: The appellant contended that as a manufacturer of cigarettes, it was entitled to purchase goods required for manufacturing cigarettes free of tax under section 5(2)(a)(ii) of the 1941 Act. The sales tax authorities argued that post the 1958 Act, the registration certificate under the 1941 Act became null and void for cigarettes. The single judge of the High Court held that the exemption under section 5(2)(a)(ii) was for goods intended for use in manufacturing cigarettes, not the cigarettes themselves. The Division Bench, however, held that the 1954 Act repealed the 1941 Act concerning cigarettes, and the 1958 Act did not revive it. The Supreme Court disagreed with the Division Bench, stating that the 1954 Act did not repeal the 1941 Act but only intercepted its operation concerning cigarettes. The 1958 Act and subsequent amendments indicated a revival of the 1941 Act's application to cigarettes. Thus, the appellant was entitled to the benefits under section 5(2)(a)(ii) of the 1941 Act. 3. Interpretation and effect of the 1954 Act, 1958 Act, and other relevant enactments on the 1941 Act: The court analyzed the definitions and provisions of the 1941 Act, the 1954 Act, and the 1958 Act. The 1941 Act broadly defined "goods" and "dealer," which included cigarettes and dealers in cigarettes. The 1954 Act imposed a tax specifically on cigarettes and excluded them from the 1941 Act's purview. The 1958 Act further amended the 1954 Act, replacing "cigarettes" with "notified commodities." The court held that the 1954 Act did not repeal the 1941 Act but modified it by excluding cigarettes. The 1958 Act did not issue any notification under section 25, which would have made cigarettes a taxable commodity under the 1954 Act. The 1941 Act's application to cigarettes revived after the 1958 Act and subsequent amendments. Conclusion: The Supreme Court allowed the appeal, set aside the judgment of the Division Bench of the High Court, and restored the decision of the single judge. The appellant was entitled to the benefits under section 5(2)(a)(ii) of the 1941 Act for purchases made for manufacturing cigarettes. The court emphasized that the 1954 Act did not repeal the 1941 Act but only intercepted its operation concerning cigarettes, and the 1958 Act and subsequent amendments revived the 1941 Act's application to cigarettes.
|
