1954 (1) TMI 20 - HC - VAT and Sales Tax

Summary

Issues Involved:

1. Taxability of transactions between the petitioner and M/s Standard Products Ltd. under the Bengal Finance (Sales) Tax Act.
2. Liability of the petitioner to pay sales tax for the period 1st April, 1947, to 22nd June, 1947, based on the amount received.

Issue-wise Detailed Analysis:

1. Taxability of Transactions:

The primary issue was whether the transactions between the petitioner and M/s Standard Products Ltd. were taxable under the Bengal Finance (Sales) Tax Act. The petitioner contended that the Standard Products Ltd. acted as its agent and not as a purchaser. The Commercial Tax Officer, however, found that the Standard Products Ltd. was not registered under the Act until 23rd June, 1947, and thus sales made to it before this date were to an unregistered dealer and taxable. The Assistant Commissioner upheld this view, opining that there were two sales: one between the petitioner and Standard Products Ltd., and another between Standard Products Ltd. and the ultimate consumers. The Commissioner of Commercial Taxes also supported this, stating that the sale to Standard Products Ltd. was effected before they were registered under the Act, thus making the tax assessment correct. The Board of Revenue rejected the petitioner's appeal, emphasizing that the transactions were sales to the subsidiary company which were taxable.

2. Liability to Pay Sales Tax for the Period 1st April, 1947, to 22nd June, 1947:

The petitioner argued that the actual amount received during the period 1st April, 1947, to 22nd June, 1947, was Rs. 1,53,513-12-0, and thus the tax should be imposed only on this amount. The Commercial Tax Officer, however, assessed the tax on the entire gross turnover of Rs. 43,27,845-8-9. The petitioner's contention was that under the law before the amendment, "turnover" was defined as the amount "received" and not "receivable." This point was raised for the first time before the Board of Revenue, which found that the petitioner received the entire sum of Rs. 5,33,447-12-0 within the relevant period, not just Rs. 1,53,513-12-0. The Court noted that the petitioner did not raise this issue before the lower authorities and that the Member, Board of Revenue, concluded that the entire amount was received during the relevant period. The Court held that this was a question of fact and not of law, and thus no reference to the High Court was warranted.

Conclusion:

The Court concluded that the petitioner's application did not succeed, as the issues raised were either questions of fact or were not properly raised at the appropriate time. The rule was discharged, and all interim orders were vacated. The Court emphasized that its decision did not validate the findings of the lower authorities regarding the nature of the transactions but indicated that such questions must be raised properly and at the correct time with appropriate materials.