1991 (4) TMI 410 - AT - VAT and Sales Tax

Issues Involved:

1. Enhancement of gross turnover in the order of assessment.
2. Rejection of the declaration form submitted by the applicant-dealer for claiming a lower rate of tax.

Issue-wise Detailed Analysis:

1. Enhancement of Gross Turnover:

The applicant was dissatisfied with the enhancement of the gross turnover in the order of assessment dated March 24, 1975, passed by the Commercial Tax Officer, China Bazar Charge. This issue was adjudicated in favor of the applicant by the West Bengal Commercial Taxes Tribunal.

2. Rejection of the Declaration Form:

The primary contention in this case was the rejection of the declaration form submitted by the applicant-dealer to claim a lower rate of tax under section 5(1)(aa) of the Bengal Finance (Sales Tax) Act, 1941. The declaration form related to sales made to Messrs. Johnson and Company against 11 bills for a sum of Rs. 2,31,091.95. The Commercial Tax Officer, appellate authority, and revisional authority all rejected the declaration form on the basis that the purchasing dealer's registration certificate had been canceled on March 3, 1972.

Contentions and Legal Provisions:

The applicant argued that once a declaration form is issued in accordance with rule 27AA of the Bengal Sales Tax Rules, 1941, it cannot be rejected under rule 27A. The applicant also contended that due to the delayed publication of the notification about the cancellation of the registration certificate, the selling dealer should not be deprived of the concessional rate of tax.

The respondents countered that the purchasing dealer was not in existence during the material time, leading to the cancellation of the registration certificate. The declaration form was kept undated and was issued by a non-existent dealer, thus no reliance could be placed on it.

Legal Analysis:

The Tribunal referred to relevant provisions of the Act and the Rules, emphasizing that a selling dealer claiming the benefit of deduction from gross turnover under section 5(2)(a)(ii) of the Act must produce relevant particulars and a declaration form duly filled in and signed by the purchasing dealer. The duty of filling up the declaration form is on the purchasing dealer.

The Tribunal noted that the declaration form cannot be rejected solely because it was issued under rule 27AA. The taxing authorities are competent to verify the genuineness of the registration certificate. If a dealer ceases to conduct business and does not surrender the declaration forms, the Commercial Tax Officer can refuse to rely on such forms after canceling the registration certificate.

The Tribunal also considered the delayed publication of the notification about the cancellation of the registration certificate. It was held that the selling dealer cannot be penalized for the delayed publication and should get the benefit of the concessional rate of tax for sales made before the cancellation date.

Judgment:

The Tribunal concluded that the applicant should be allowed the concessional rate of tax for the sales covered by seven bills (Nos. 21 to 27) during the period from January 23, 1972, to February 25, 1972. The sales after the cancellation of the registration certificate on March 3, 1972, were not considered genuine. The assessment was to be modified accordingly.

Conclusion:

The application was allowed in part. The orders of the Commercial Tax Officer, appellate authority, and revisional authority were modified. The Commercial Tax Officer, China Bazar Charge, was directed to allow the concessional rate of tax under section 5(1)(aa) of the Bengal Finance (Sales Tax) Act, 1941, for the seven bills during the specified period and modify the assessment accordingly. No order as to costs was made.

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