1987 (6) TMI 391 - HC - VAT and Sales Tax

Summary

Issues:
1. Withholding of declaration forms and permits by the Commercial Tax Officer under the Bengal Finance (Sales Tax) Act, 1941.

Analysis:
The writ petition challenged the action of the Commercial Tax Officer for withholding the issuance of declaration forms and permits required for importing goods under the Bengal Finance (Sales Tax) Act, 1941. The Court directed the Commercial Tax Officer to dispose of the application for declaration forms and permits in accordance with the law, providing the petitioner with an opportunity to be heard. The Commercial Tax Officer rejected the application for declaration forms on the grounds that the dealer had disposed of imported goods meant for resale outside the State of West Bengal through stock transfer without producing contractual evidence, thereby contravening relevant tax rules.

The power of the Commercial Tax Officer to withhold declaration forms is governed by rule 27AA of the Bengal Sales Tax Rules, 1941. The Court noted that the officer must have specific grounds, as mentioned in the rules, to withhold the forms. In this case, the officer did not specify the grounds under which the declaration forms were withheld, and the reasons provided were deemed insufficient. The Court emphasized that the officer must act within the statutory framework and issue forms if the dealer meets the conditions laid down in the rules.

The Court highlighted that the officer's findings regarding the stock transfer of goods should be examined during regular assessments rather than at the time of issuing declaration forms. The Commercial Tax Officer was directed to reconsider the application for declaration forms based on the observations made by the Court. Additionally, the officer was instructed to handle the application for a permit in form "F" once the necessary documents were provided by the petitioner.

Furthermore, the Court noted that the officer had not disclosed valid grounds for withholding the permit and should either obtain the required documents from the Central Section or allow the petitioner access to the seized records to fulfill the permit application requirements. The Commercial Tax Officer was directed to resolve the matter within two weeks and was reminded not to treat the dealer with suspicion solely based on the seizure of documents without initiating proper proceedings.

In conclusion, the Court set aside the officer's order and remanded the matter for proper consideration in accordance with the law, emphasizing the need for the officer to act within the statutory framework and provide valid grounds for withholding declaration forms and permits.