1991 (2) TMI 397 - AT - VAT and Sales Tax

Summary

Issues:
Application under Article 226 of the Constitution regarding tax liability and registration under the Bengal Finance (Sales Tax) Act, 1941.

Analysis:
The case involved an application under Article 226 of the Constitution, sent to the Tribunal for disposal under the West Bengal Taxation Tribunal Act, 1987. The applicant, a shipping company, was notified by the Commercial Tax Officer regarding amendments to the definition of "dealer" in the Act of 1941. The company contested its liability for tax under the Act, requesting information and denying liability. The Commercial Tax Officer issued notices and an order holding the company liable for registration and tax. The applicants filed a writ petition challenging the order and notices. The Tribunal, after hearing both parties, found that the impugned order and notices should not stand, as the Tax Officer did not conclusively determine the company's status as a "dealer" before issuing them. The Tribunal set aside the order and notices, granting the Tax Officer a fresh opportunity to reassess the company's tax liability under the Act of 1941.

The Tribunal emphasized that the Tax Officer should determine whether the company's sales related to ships as ships or as scrap, and whether such sales would trigger liability under the Act. The Tribunal annulled the order, notices, and registration certificate, directing the Tax Officer to reassess the company's tax liability after providing an opportunity for the company to be heard. The Tribunal clarified that there would be no limitation for assessing tax if the company was found liable. The Tribunal refrained from delving into the merits of the case, allowing the company to challenge any future orders by the Tax Officer. The main application was disposed of without costs.