1993 (3) TMI 327 - AT - VAT and Sales Tax

Summary

Issues Involved:
1. Whether the sale of bags packed with cement amounts to resale of the bags in West Bengal within the meaning of section 5 of the Bengal Finance (Sales Tax) Act, 1941.
2. Whether the applicant-company is entitled to a concessional rate of tax for the purchase of packing materials (bags) under section 5(1)(aa) or section 5(1)(bb) of the Bengal Finance (Sales Tax) Act, 1941.
3. Whether the amendment of the registration certificate to include packing materials in the resale column is justified.
4. Whether there is any contravention of articles 14, 19(1)(g), 300A, 303, and 304 of the Constitution of India.

Issue-wise Detailed Analysis:

1. Resale of Bags Packed with Cement:
The applicant-company argued that the sale of bags packed with cement should be considered as resale of the bags in West Bengal. The Commercial Tax Officer, Assistant Commissioner, and Additional Commissioner rejected this claim, stating that the bags undergo changes (such as stamping and sealing) and do not remain in the same condition as when purchased. The Tribunal upheld this view, stating that resale implies selling the purchased goods in the same condition without substantial change. Since the bags are used for packing cement and undergo changes, their sale cannot be considered resale under section 5 of the Bengal Finance (Sales Tax) Act, 1941.

2. Entitlement to Concessional Rate of Tax:
The applicant initially claimed entitlement to a concessional rate of tax under section 5(1)(bb) but later relied on section 5(1)(aa). Section 5(1)(bb) applies to manufacturers within West Bengal, which the applicant is not. Section 5(1)(aa) allows a concessional rate for goods intended for resale in West Bengal. The Tribunal concluded that since the bags are used for packing cement and undergo changes, they do not qualify for resale. Therefore, the applicant is not entitled to a concessional rate of tax for the purchase of bags under section 5(1)(aa).

3. Amendment of Registration Certificate:
The applicant sought an amendment to include packing materials in the resale column of its registration certificate. The Commercial Tax Officer and higher authorities rejected this request, stating that the bags are used in the manufacturing process and not for resale. The Tribunal agreed, stating that the amendment of the registration certificate under rule 11(3)(b) is not automatic and depends on the intention for resale. Since the bags are not resold in the same condition, the amendment was rightly declined.

4. Contravention of Constitutional Articles:
The applicant claimed that the orders were violative of articles 14, 19(1)(g), and 300A of the Constitution. However, the Tribunal found no merit in these claims. Additionally, the applicant mentioned contravention of articles 303 and 304 in written submissions, but this was not argued orally or included in the main application. The Tribunal concluded that there was no contravention of these constitutional provisions.

Conclusion:
The Tribunal dismissed the application, holding that the activities of the applicant do not amount to resale of bags in West Bengal. Consequently, the applicant is not entitled to a concessional rate of tax under section 5(1)(aa) or section 5(1)(bb) of the Bengal Finance (Sales Tax) Act, 1941. The amendment of the registration certificate was also rightly declined. No order was made for costs.