1959 (2) TMI 25 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Exemption under Section 5(2)(a)(ii) of the Bengal Finance (Sales Tax) Act.
2. Loss of declaration forms and the possibility of using secondary evidence.
3. Jurisdiction and authority of the Commercial Tax Officer.
4. Reasonableness of statutory provisions under Article 19(1)(g) of the Constitution.

Detailed Analysis:

1. Exemption under Section 5(2)(a)(ii) of the Bengal Finance (Sales Tax) Act:
The petitioner, a registered dealer, claimed exemption under Section 5(2)(a)(ii) for sales to other registered dealers, amounting to Rs. 69,65,979-9-6. This provision allows for exemption if a declaration duly filled up and signed by the purchasing dealer is furnished. The petitioner could not produce declaration forms for nine registered dealers, totaling Rs. 22,46,006-0-6, leading to the refusal of exemption for these transactions. The court emphasized that the exemption is conditional upon the actual production of the declaration forms in the prescribed manner.

2. Loss of Declaration Forms and the Possibility of Using Secondary Evidence:
The petitioner alleged that a file containing 147 declaration forms was lost during the shifting of its office. Despite efforts to obtain duplicate forms from the purchasing dealers, most dealers did not issue duplicates. The petitioner argued that secondary evidence, such as confirmatory letters and other documents, should be accepted. However, the court held that the statutory requirement is the actual production of the declaration forms, and secondary evidence cannot replace this requirement.

3. Jurisdiction and Authority of the Commercial Tax Officer:
The petitioner applied under Section 21-A of the Act, requesting the Commercial Tax Officer to summon the purchasing dealers to produce their books and confirm the transactions. The court noted that while the Commercial Tax Officer has powers to summon and examine witnesses, this does not extend to accepting secondary evidence in place of the required declaration forms. The court emphasized that the statutory provisions must be strictly followed, and the Commercial Tax Officer cannot grant exemption without the actual declaration forms.

4. Reasonableness of Statutory Provisions under Article 19(1)(g) of the Constitution:
The petitioner argued that the requirement to produce declaration forms constitutes an unreasonable restriction on the right to trade under Article 19(1)(g) of the Constitution. The court rejected this argument, noting that Article 19(1)(g) does not apply to corporations and that the statutory requirement is a reasonable restriction aimed at preventing fraud and ensuring proper tax collection. The court highlighted the widespread misuse of declaration forms and the necessity of strict compliance with the statutory provisions to prevent tax evasion.

Conclusion:
The court dismissed the petition, holding that the petitioner must produce the actual declaration forms to claim exemption under Section 5(2)(a)(ii) of the Act. The statutory requirement for the production of declaration forms is a reasonable restriction aimed at preventing misuse and ensuring proper tax collection. The application of secondary evidence in place of the actual forms is not permissible under the Act. The rule was discharged, and interim orders were vacated without any order as to costs.