1991 (6) TMI 239 - AT - VAT and Sales Tax

Summary

Issues Involved:
1. Validity of the registration certificate issued for manufacturing "trolley" instead of "emergency power pack unit."
2. Eligibility certificate for tax exemption for "trolley" instead of "emergency power pack unit."
3. Determination of whether the applicant is a manufacturer of "emergency power pack unit" or merely a manufacturer of "trolley."

Issue-wise Detailed Analysis:

1. Validity of the registration certificate issued for manufacturing "trolley" instead of "emergency power pack unit":

The applicant, a partner in a firm manufacturing emergency mobile power pack units, applied for registration as a wholly manufacturing dealer. The Commercial Tax Officer granted registration for manufacturing trolley instead of the emergency power pack unit. The applicant argued that the registration should have been issued based on the particulars provided in the application. However, the tribunal held that under section 7(3) of the Bengal Finance (Sales Tax) Act, 1941, and rules 6 and 7 of the Bengal Sales Tax Rules, 1941, the Commercial Tax Officer is competent to make inquiries and satisfy himself about the nature of the business before issuing a registration certificate. The officer's decision to register the applicant for manufacturing trolley was based on an inspector's report, which was deemed valid by the tribunal.

2. Eligibility certificate for tax exemption for "trolley" instead of "emergency power pack unit":

The applicant applied for an eligibility certificate for tax exemption under rule 3(66a) of the Bengal Sales Tax Rules, 1941, for the emergency mobile power pack unit but was granted exemption for the trolley. The tribunal noted that the applicant's manufacturing activities involved assembling various components, including a generator, on a trolley to create a composite unit known as an emergency power pack unit. The tribunal held that the applicant is entitled to an eligibility certificate for manufacturing emergency mobile power pack units up to September 30, 1983, and for trolleys from October 1, 1983. The Assistant Commissioner's order granting exemption only for trolleys was set aside.

3. Determination of whether the applicant is a manufacturer of "emergency power pack unit" or merely a manufacturer of "trolley":

The tribunal examined whether the applicant's activities constituted manufacturing an emergency power pack unit or merely a trolley. The tribunal referred to the definition of "manufacture" in the Bengal Finance (Sales Tax) Act, 1941, which includes producing, making, altering, or adapting goods. The tribunal considered various judicial precedents and concluded that the applicant's process of assembling a generator, trolley, fan, light, switchboard, and wires to create an emergency power pack unit resulted in a new commercial commodity with distinct characteristics and uses. The tribunal held that the applicant is engaged in manufacturing emergency mobile power pack units, not just trolleys.

Conclusion:

The tribunal set aside the orders of the Additional Commissioner of Commercial Taxes and the Commercial Tax Officer, directing them to amend the registration certificate to reflect the manufacture of emergency mobile power pack units and issue declaration forms accordingly. The applicant was also entitled to an eligibility certificate for the manufacture of emergency mobile power pack units up to September 30, 1983, and for trolleys from October 1, 1983. The applications were allowed without any order for costs.