1986 (2) TMI 296 - HC - VAT and Sales Tax

Summary

Issues Involved:

1. Maintainability of the writ application.
2. Jurisdiction of the Calcutta High Court.
3. Applicability of Section 5 of the Bihar Sales Tax Act, 1959.
4. Interpretation of the term "carton" in the context of the notification dated 12th February, 1966.

Detailed Analysis:

1. Maintainability of the Writ Application:

The respondents contended that the writ application was not maintainable as the Tribunal's order in the case of Card Board Products (Gomia) was the subject-matter of reference pending before the Patna High Court. The court, however, rejected this contention, stating that the pendency of a reference in another court does not strip this court of its jurisdiction to decide the legal contentions urged in this writ proceeding. The court emphasized that the petitioner was not a party to the said proceeding, and almost ten years had passed since the rule was issued, making it impractical to keep the application pending indefinitely.

2. Jurisdiction of the Calcutta High Court:

The respondents argued that the Calcutta High Court lacked jurisdiction as the concerned authorities were in Bihar. The court, however, noted that the petitioner had its registered office in Calcutta, where the impugned notices and orders were communicated and served. Additionally, assessment proceedings were conducted at the petitioner's office in Calcutta. Thus, a part of the cause of action arose within the jurisdiction of the Calcutta High Court. The court further stated that such jurisdictional objections should have been raised at the time the rule was issued, not at this later stage.

3. Applicability of Section 5 of the Bihar Sales Tax Act, 1959:

The petitioner contended that Section 5 of the Bihar Sales Tax Act, 1959, which deals with the levy of special sales tax at a point in a series of sales, was not applicable. The court agreed, stating that a "series of sales" implies more than one sale, involving successive dealers like distributors, wholesalers, and retailers. In this case, there was only one sale of the packing materials from Card Board Products (Gomia) to the petitioner, and these materials could not be resold due to restrictions under the Explosives Act and Rules. Therefore, Section 5 was not applicable.

4. Interpretation of the Term "Carton" in the Context of the Notification Dated 12th February, 1966:

The respondents argued that the cartons purchased by the petitioner fell within the goods specified in the notification, making them liable for special sales tax. The petitioner, however, contended that the notification included only "cartons" and not "boxes" or other outer packages made of cardboard. The court examined the definitions provided by the Indian Standards Institution and concluded that the packages purchased by the petitioner were "boxes" used as exterior containers for transportation, not "cartons." The court also noted that the registration certificate of the petitioner distinguished between "cartons" and "boxes," indicating that they were treated as different goods by the sales tax authorities. Therefore, the notification did not apply to the cardboard boxes purchased by the petitioner.

Conclusion:

The court concluded that the respondents acted without jurisdiction in attempting to amend the registration certificate of the petitioner based on the notification. The writ petition was allowed, and the respondents were directed not to proceed further with the amendment of the registration certificate. The application succeeded, and the rule was made absolute with no order as to costs.