1961 (8) TMI 20 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Requirement to produce original declaration forms for tax exemption.
2. Validity of alternative evidence for tax exemption.
3. Compliance with Section 21A of the Bengal Finance (Sales Tax) Act, 1941.
4. Alleged infringement of Article 19(1)(g) of the Constitution.
5. Availability of alternative remedies under the Bengal Finance (Sales Tax) Act.

Detailed Analysis:

1. Requirement to Produce Original Declaration Forms for Tax Exemption:
The principal issue was whether the dealer, who claims the benefit of exemption under section 5(2)(a)(ii) of the Bengal Finance (Sales Tax) Act, must produce the original declaration forms received from the purchasing dealer or whether other evidence could suffice if the original declarations were lost. The court held that the proviso in section 5(2)(a)(ii) is absolute and imperative, requiring the production of original declaration forms for claiming exemptions. The court emphasized that the words of the proviso are plain and unambiguous, and it is not within the court's purview to introduce words into a taxing statute that are not there, as this would amount to judicial legislation.

2. Validity of Alternative Evidence for Tax Exemption:
The appellant argued that an equitable and liberal construction should be put upon the proviso to relieve the hardship caused by the loss of original declaration forms. The court rejected this argument, citing the English Court of Appeal's observation that introducing words not present in a taxing statute would be judicial legislation. The court noted that the Bengal Sales Tax Rules, particularly rule 27A, do not provide for the contingency of the original declaration forms being lost or destroyed. Therefore, the production of original declaration forms is indispensable for claiming exemptions.

3. Compliance with Section 21A of the Bengal Finance (Sales Tax) Act, 1941:
The appellant contended that the Commercial Tax Officer should have acted on their application under section 21A to summon witnesses and produce documents to substantiate their claim for exemption. The court held that section 21A vests discretionary power in the taxing authority to summon witnesses and enforce the production of documents. The court found that the taxing authority's refusal to act on the application was justified, as the declaration forms were admitted to be lost, and there was no prejudice caused to the appellant by not summoning witnesses or producing documents.

4. Alleged Infringement of Article 19(1)(g) of the Constitution:
The appellant argued that the proviso in section 5(2)(a)(ii) and rule 27A(1)(b) constituted an unreasonable restriction on their fundamental right to carry on business under Article 19(1)(g) of the Constitution. The court held that the stringent provisions were enacted to prevent tax evasion and were in the public interest. The court noted that fundamental rights are not immune from taxation and that the provisions in question did not constitute an unreasonable restriction on the appellant's right to carry on business.

5. Availability of Alternative Remedies under the Bengal Finance (Sales Tax) Act:
The respondents argued that the appellant had alternative remedies available under the Bengal Finance (Sales Tax) Act, such as appeals and references to the High Court, and therefore, the writ petition under Article 226 was not maintainable. The court did not rest its decision on this technical point but noted that the appeal must fail based on the findings on the other points.

Conclusion:
The appeal was dismissed with costs. The court upheld the requirement for the production of original declaration forms for claiming tax exemptions and found no merit in the appellant's arguments regarding alternative evidence, compliance with section 21A, infringement of Article 19(1)(g), and the availability of alternative remedies. The court emphasized the importance of adhering to the statutory provisions and the legislative intent behind the stringent requirements for tax exemptions.