1956 (8) TMI 42 - HC - VAT and Sales Tax

Issues Involved:
1. Registration of the petitioner-company under the Bengal Finance (Sales Tax) Act, 1941.
2. Validity of the notice issued under section 11(2) of the Bengal Finance (Sales Tax) Act, 1941.
3. Delegation of powers by the Commissioner under section 15 of the Bengal Finance (Sales Tax) Act, 1941.
4. Satisfaction and information possession requirements under section 11(2) of the Bengal Finance (Sales Tax) Act, 1941.

Detailed Analysis:

1. Registration of the Petitioner-Company under the Bengal Finance (Sales Tax) Act, 1941:
The petitioner-company, incorporated under the Indian Companies Act, 1913, shifted its registered office from Bombay to Calcutta effective from 1st April 1952. The company owns collieries in Bihar and applied for registration as a dealer under sections 7/8 of the Bengal Finance (Sales Tax) Act, 1941, on 6th December 1954. The application was made in Form 1A, appropriate for dealers with only one place of business in West Bengal, and the company was registered on 22nd April 1955. However, the petitioner received a notice on 26th April 1955, alleging failure to register for the period from 6th November 1950 to 21st April 1955.

2. Validity of the Notice Issued under Section 11(2) of the Bengal Finance (Sales Tax) Act, 1941:
The petitioner challenged the notice issued under section 11(2) of the Act, arguing that the Commercial Tax Officer (CTO) lacked the jurisdiction to issue the notice. According to the petitioner, section 11(2) requires the subjective satisfaction of the Commissioner, which cannot be delegated. The court examined whether the notice was valid, considering the statutory requirements and the delegation of powers.

3. Delegation of Powers by the Commissioner under Section 15 of the Bengal Finance (Sales Tax) Act, 1941:
Section 15 of the Act allows the Commissioner to delegate any of his powers, except those under section 22(2), to any person appointed under section 3 to assist him. Rule 71 of the Bengal Sales Tax Rules specifies the powers that can be delegated, including the power to make an assessment of tax or penalty under section 11. The court analyzed whether the delegation of the power to be satisfied under section 11(2) was valid and whether the CTO could act upon his own satisfaction based on information received by him.

4. Satisfaction and Information Possession Requirements under Section 11(2) of the Bengal Finance (Sales Tax) Act, 1941:
Section 11(2) stipulates that the Commissioner must be satisfied, based on information that has come into his possession, that a dealer liable to pay tax has failed to register. The court considered whether this satisfaction could be delegated and whether the information must come directly into the possession of the Commissioner. The court referenced several cases to determine if the satisfaction and information requirements could be met by the delegatee, the CTO, instead of the Commissioner.

Court's Conclusion:
The court held that the delegation of powers under section 15 was valid, and the CTO had the authority to issue the notice under section 11(2). The court reasoned that the power to assess includes the duty to be satisfied, and this duty cannot be separated from the power. The court also determined that the information requirement could be fulfilled if the information initially came to the Commissioner and was then conveyed to the CTO. Therefore, the notice served by the CTO was deemed valid, and the petition was dismissed.

Final Judgment:
The application was dismissed, and the rule was discharged. All interim orders were vacated, and there was no order as to costs. The court did not comment on the merits of the case but upheld the validity of the notice issued by the CTO.

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