1975 (12) TMI 150 - HC - VAT and Sales Tax

Issues Involved:
1. Liability of sugar-candy to sales tax under the West Bengal Sales Tax Act, 1954.
2. Validity of the assessment orders made under section 9(3) of the West Bengal Sales Tax Act, 1954.
3. Rejection of review applications without allowing rectification of defects.
4. Applicability of section 15 of the Central Sales Tax Act, 1956.
5. Validity of the assessment under section 9(3)(iii) of the West Bengal Sales Tax Act, 1954.
6. Impact of Notification No. 506-F.T. dated 3rd March, 1958, on the assessment.

Detailed Analysis:

1. Liability of sugar-candy to sales tax under the West Bengal Sales Tax Act, 1954:
The appellants were assessed to tax for sales of cane sugar-candy and palm sugar-candy. The learned Judge held that sugar and sugar-candy are different commercial commodities and thus, the notification exempting sugar from the 1954 Act did not exempt sugar-candy. However, the appellants contended that sugar-candy should be considered as sugar, which was exempt from tax. The court referred to various judgments, including the Supreme Court's decision in State of Gujarat v. Sakarwala Bros., which held that all forms of sugar, including sugar-candy, are exempt from sales tax. The court concluded that sugar-candy is essentially sugar in another form and should be exempt from sales tax.

2. Validity of the assessment orders made under section 9(3) of the West Bengal Sales Tax Act, 1954:
The appellants were assessed under section 9(3) for failing to register under the 1954 Act. The court found that the appellants were indeed liable to tax as they were dealing in notified commodities. However, the assessment orders for the year 1364 B.S. were found to include sales during a period when sugar was exempt from tax, necessitating a modification of the assessment.

3. Rejection of review applications without allowing rectification of defects:
The appellants' review applications were rejected without allowing them to rectify defects. The court held that there was no legal obligation on the authorities to allow rectification as the applications were not accompanied by the requisite fees, making them invalid. However, the court considered the grounds for review in its judgment to ensure no prejudice to the appellants.

4. Applicability of section 15 of the Central Sales Tax Act, 1956:
The appellants contended that the tax rate should not exceed 2% as per section 15 of the Central Sales Tax Act, 1956. The court found this contention inapplicable as the relevant assessment years ended before the insertion of sugar in section 14 of the Central Sales Tax Act, effective from 1st October 1958.

5. Validity of the assessment under section 9(3)(iii) of the West Bengal Sales Tax Act, 1954:
The appellants argued that there could be no assessment under section 9(3)(iii) as they were registered dealers. The court dismissed this argument, stating that the appellants were not registered under the 1954 Act, which was mandatory for dealers of notified commodities.

6. Impact of Notification No. 506-F.T. dated 3rd March, 1958, on the assessment:
The notification exempted sugar from tax with effect from 14th December, 1957. The court held that for sales of sugar-candy during the period from 14th December, 1957, to 13th April, 1958, no sales tax was payable. Therefore, the assessment order for 1364 B.S. required modification to exclude sales during this period.

Conclusion:
The appeal was partly allowed. The assessment orders for 1362 and 1363 B.S. were upheld, while the assessment order for 1364 B.S. was quashed for including sales during the exempted period. The Commercial Tax Officer was directed to reassess the sales for 1364 B.S. up to 13th December, 1957, with an opportunity for the appellants to produce relevant documents. The court issued appropriate writs accordingly, with no order for costs and vacated all interim orders.

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