1991 (7) TMI 357 - AT - VAT and Sales Tax

Issues Involved:
1. Interpretation and constitutional validity of the added proviso and the amendment to clause (iv) of rule 3(66) of the Bengal Sales Tax Rules, 1941.
2. Interpretation of Notification No. 1177-F.T. dated March 31, 1983, under section 4AA of the West Bengal Sales Tax Act, 1954.
3. Eligibility for exemption from sales tax under the Bengal Sales Tax Rules, 1941, and the West Bengal Sales Tax Act, 1954.
4. Application of the doctrine of promissory estoppel.
5. Validity of the suo motu revision by the Additional Commissioner of Commercial Taxes.

Detailed Analysis:

1. Interpretation and Constitutional Validity of the Added Proviso and the Amendment to Clause (iv) of Rule 3(66) of the Bengal Sales Tax Rules, 1941:
The Tribunal examined the interpretation and constitutional validity of the added proviso and the amendment to clause (iv) of rule 3(66) of the Bengal Sales Tax Rules, 1941. The proviso and amendment, effective from April 1, 1983, set the last date for applying for an eligibility certificate as April 14, 1983, for registered dealers and March 31, 1983, for unregistered dealers. The Tribunal upheld the validity of these provisions, stating that they were not arbitrary or unreasonable and did not violate Article 14 of the Constitution. The Tribunal referred to its previous judgment in Dr. Sankarananda Guha v. Additional Commissioner, Commercial Taxes, where it was held that the last date of filing application was unequivocally fixed as April 14, 1983, for all dealers, including registered ones.

2. Interpretation of Notification No. 1177-F.T. Dated March 31, 1983, Under Section 4AA of the West Bengal Sales Tax Act, 1954:
The Tribunal addressed the interpretation of Notification No. 1177-F.T. dated March 31, 1983, which provided for tax exemption for newly set up small-scale industries. The Tribunal clarified that the period of exemption under the 1954 Act should commence from the date of the first sale of the manufactured notified commodity taxable under the 1954 Act, not from the date of the first sale of any manufactured product under the 1941 Act. The Tribunal emphasized that the exemption provisions under the two Acts operate independently with respect to products taxable under the respective Acts.

3. Eligibility for Exemption from Sales Tax Under the Bengal Sales Tax Rules, 1941, and the West Bengal Sales Tax Act, 1954:
The Tribunal examined the eligibility for exemption from sales tax under both the 1941 and 1954 Acts. The Tribunal found that the applicants had applied for eligibility certificates and renewals under the appropriate rules and that the granting authorities had initially granted and renewed the certificates. However, the Additional Commissioner later revised these orders, withdrawing the eligibility certificates for the last two years. The Tribunal held that the withdrawal was unjustified and restored the eligibility certificates and renewals for the applicants, covering the full period of five years under the 1941 Act and the appropriate periods under the 1954 Act.

4. Application of the Doctrine of Promissory Estoppel:
The Tribunal considered the application of the doctrine of promissory estoppel, which was invoked by the applicants to claim that the concessions promised under rule 3(66) for a period of five years could not be withdrawn. The Tribunal acknowledged that the applicants had set up their industries based on the concessions offered and had not collected sales tax from their purchasers. The Tribunal found that the conduct of the eligibility certificate granting authority had created a representation that the applicants could claim further renewals for the last two years, provided the conditions laid down in rule 3(66) were complied with. The Tribunal held that the withdrawal of the renewals was less than reasonable and restored the eligibility certificates for the last two years.

5. Validity of the Suo Motu Revision by the Additional Commissioner of Commercial Taxes:
The Tribunal examined the validity of the suo motu revision by the Additional Commissioner, who had revised the orders granting eligibility certificates and renewals. The Tribunal found that the Additional Commissioner had exercised his jurisdiction to correct a mistake by the Assistant Commissioner. However, the Tribunal held that the delay in passing the revisional order and the prejudice caused to the applicants by the withdrawal of the renewals made the exercise of the power of suo motu revision unreasonable and arbitrary. The Tribunal set aside the revisional order dated February 2, 1990, and restored the eligibility certificates and renewals for the applicants.

Conclusion:
The Tribunal allowed the applications in RN-195 and RN-196 of 1990, quashing the revisional order dated February 2, 1990, and restoring the eligibility certificates and renewals for the applicants. The writ applications in RN-460(T) and RN-695(T) of 1989 were dismissed. The Tribunal directed the appropriate Assistant Commissioner to dispose of the application for renewal of the eligibility certificate for the period from November 1, 1987, to December 17, 1987, in accordance with the law within eight weeks. No order was made for costs.

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