1985 (8) TMI 352 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Legality of withholding declaration forms under rule 27AA(2)(c) of the Bengal Sales Tax Rules.
2. Validity of rule 4(2) of the Central Sales Tax (West Bengal) Rules, 1958.
3. Jurisdiction of the Commercial Tax Officer to impose conditions for obtaining declaration forms under section 8(4) of the Central Sales Tax Act, 1956.

Issue-wise Detailed Analysis:

1. Legality of Withholding Declaration Forms under Rule 27AA(2)(c) of the Bengal Sales Tax Rules:
The principal point in this appeal is whether the withholding of declaration forms to the respondent-company under rule 27AA(2)(c) of the Bengal Sales Tax Rules was legal and valid. The Commercial Tax Officer had refused to issue form No. C and form No. XXIVA declaration forms on the grounds that the dealer had defaulted in submitting returns under the Bengal Finance (Sales Tax) Act, 1941, and the Central Sales Tax Act, 1956, since July 1973. The trial Judge held that the Commercial Tax Officer had no jurisdiction to impose any restriction or condition for obtaining declaration forms in terms of section 8(4) of the Central Sales Tax Act, 1956. However, the appellate court concluded that the Commercial Tax Officer had jurisdiction to direct that unless the dealer submitted returns under the Central Sales Tax Act, no declaration form referred to in section 8(4) of the said Act would be issued.

2. Validity of Rule 4(2) of the Central Sales Tax (West Bengal) Rules, 1958:
The trial Judge pronounced as invalid rule 4(2) of the Central Sales Tax (West Bengal) Rules, 1958, which makes rule 27AA of the Bengal Sales Tax Rules applicable in the case of issue of declaration forms referred to in section 8(4) of the Central Sales Tax Act, 1956. However, the appellate court did not uphold this view. The court observed that clause (e) of section 13(4) of the Central Sales Tax Act authorizes the State Government to prescribe conditions for obtaining declaration forms. Therefore, the State Government was fully competent to make the entire rule 27AA applicable to the issue of declaration forms under section 8(4) of the Central Sales Tax Act.

3. Jurisdiction of the Commercial Tax Officer to Impose Conditions for Obtaining Declaration Forms under Section 8(4) of the Central Sales Tax Act, 1956:
The appellate court examined whether the Commercial Tax Officer acted within his jurisdiction by ordering the company to file its returns under the Central Sales Tax Act, 1956, before issuing declaration forms under section 8(4) of the said Act. It was concluded that the State Government, under section 13(4)(e) of the Central Sales Tax Act, 1956, may make rules for specifying the authority from whom and the conditions subject to which any form of declaration prescribed under sub-section (4) of section 8 may be obtained. Rule 27AA(2)(c) of the Bengal Sales Tax Rules empowers the Commercial Tax Officer to insist upon the filing of returns as a condition for issuing declaration forms. Therefore, the Commercial Tax Officer lawfully called upon the dealer to fulfill the obligation of submitting returns before issuing declaration forms.

Conclusion:
The appellate court allowed the appeal, set aside the judgment and order of the trial court, and dismissed the writ petition filed by the respondent, M/s. Bengal Potteries Ltd., in its entirety. The court concluded that the Commercial Tax Officer had jurisdiction to direct that unless the dealer submitted returns under the Central Sales Tax Act, no declaration form would be issued. Consequently, rule 4(2) of the Central Sales Tax (West Bengal) Rules was not ultra vires, and rule 27AA of the Bengal Sales Tax Rules was lawfully made applicable in the matter of issuing declaration forms under section 8(4) of the Central Sales Tax Act.