1989 (8) TMI 332 - AT - VAT and Sales Tax

Summary

Issues:
Challenge to imposition of turnover tax under the Bengal Finance (Sales Tax) Act, 1941 on grounds of constitutionality, violation of fundamental rights, and incompetence of State Legislature.

Detailed Analysis:

1. Imposition of Turnover Tax Challenge:
The applicant challenged the imposition of turnover tax under section 6B of the Bengal Finance (Sales Tax) Act, 1941, alleging it to be void, ultra vires the Constitution, and beyond the competence of the State Legislature. The challenge was based on violations of fundamental rights under articles 14 and 19(1)(g) of the Constitution, along with contentions of infringement of articles 31, 45, 265, 286, 300A, 301, and 304. The case was transferred to the Tribunal from a writ application filed under article 226 of the Constitution.

2. High Court Decision and Arguments:
A Division Bench of the Calcutta High Court had previously disposed of similar cases, holding that turnover tax is a tax on sales, within the competence of the State Legislature, and not violative of the alleged constitutional articles. The present applicant's case was not part of the cases disposed of by the High Court. The applicant's arguments, including contentions on the tax being an imposition on income and violating article 301 read with article 304(b), were considered and rejected by the High Court.

3. Supreme Court Decision and Conclusion:
The applicant relied on a recent Supreme Court decision regarding a different Act, arguing that the tax imposed constituted a restriction on trade and commerce. However, the Tribunal found that the Supreme Court decision was not directly relevant to the present case. The Tribunal concurred with the High Court's findings and dismissed the writ petition challenging the turnover tax imposition, emphasizing that all relevant issues had been previously considered and addressed.

4. Interest on Turnover Tax Cases:
Additionally, the Tribunal mentioned disposing of cases related to interest on turnover tax under section 10B of the BFST Act, 1941, by directing payment of interest from a specific date. The Tribunal found no merit in the present writ petition challenging the turnover tax imposition and dismissed the case without costs.

In conclusion, the Tribunal upheld the imposition of turnover tax under the BFST Act, 1941, rejecting the challenges raised by the applicant and affirming the legality and constitutionality of the tax.