1991 (2) TMI 398 - AT - VAT and Sales Tax

Issues Involved:
1. Jurisdiction and authority of the Additional Commissioner of Commercial Taxes to cancel the Eligibility Certificate (E.C.).
2. Validity of the Eligibility Certificate issued to the applicant.
3. Use of brand name or trade mark "Banphool" by the applicant and its implications.
4. Procedural correctness of the notice issued in form IX.

Detailed Analysis:

1. Jurisdiction and Authority of the Additional Commissioner of Commercial Taxes to Cancel the Eligibility Certificate (E.C.):

The applicant contended that the Additional Commissioner of Commercial Taxes lacked the competence, authority, or jurisdiction to cancel the E.C. with retrospective effect. The Tribunal examined the provisions of the West Bengal Sales Tax Act, 1954, and the West Bengal Sales Tax Rules, 1954. Under Section 3 of the Act, the State Government prescribes the authority for carrying out the purposes of the Act. The prescribed authority can delegate powers to persons appointed to assist it. Rule 4 of the Rules allows such delegation but does not mention Section 4AA, under which the E.C. was granted.

The Tribunal noted that Section 12(3)(a) of the Act empowers the prescribed authority to revise any order passed by an assistant. Rule 33(3A) allows the Additional Commissioner to exercise this power if directed by the prescribed authority. An office order dated April 21, 1987, authorized the Additional Commissioner to handle administrative and revisional matters for certain circles, including Dharmatala Circle, where the applicant's case was situated. The Tribunal concluded that this office order amounted to a direction by the prescribed authority, thus granting the Additional Commissioner the jurisdiction to revise the E.C.

2. Validity of the Eligibility Certificate Issued to the Applicant:

The applicant argued that the Additional Commissioner should not have declared the E.C. invalid. The Tribunal held that the power of suo motu revision under Section 12(3)(a) is broad and could be exercised in this case. The Assistant Commissioner had failed to consider clause (vi) of the explanation in Notification No. 1177-F.T. dated March 31, 1983, which states that a newly set up industrial unit should not use the trade mark or brand name of an existing unit. This failure affected the Assistant Commissioner's jurisdiction to grant the E.C., justifying the Additional Commissioner's revision.

3. Use of Brand Name or Trade Mark "Banphool" by the Applicant and Its Implications:

The applicant contended that the name "Banphool" was merely a symbol or design used for marketing and not a brand name or trade mark. However, the Tribunal found that both the applicant and M/s. Sharma Chemical Works used "Banphool" as a trade mark. The cartons of ayurvedic oil and an agreement between the two entities showed that the applicant used the trade mark under the authority of Sharma Chemical Works. The Tribunal concluded that the applicant's use of the brand name "Banphool" disqualified it from receiving the E.C. under clause (vi) of the explanation in Notification No. 1177-F.T. dated March 31, 1983.

4. Procedural Correctness of the Notice Issued in Form IX:

The applicant objected to the use of form IX, which relates to the Bengal Finance (Sales Tax) Act, 1941. The Tribunal noted that while there is no corresponding provision in the Rules under the West Bengal Sales Tax Act, the use of form IX was for convenience and to comply with the principles of natural justice. The notice provided sufficient details about the proposed order, and the applicant was not prejudiced by receiving it.

Conclusion:

All contentions raised by the applicant were rejected. The Tribunal upheld the Additional Commissioner's order declaring the E.C. invalid and dismissed the application without any order as to costs.

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