1994 (5) TMI 255 - AT - VAT and Sales Tax

Issues Involved:
1. Jurisdiction of the Tribunal
2. Legality of Memo. No. 2907 A. Tax dated August 31, 1984
3. Alleged failure of natural justice
4. Validity of the procedure for collection of entertainment tax

Issue-wise Detailed Analysis:

1. Jurisdiction of the Tribunal:
The applicants argued that the Tribunal lacked jurisdiction to decide the case, as it was concerned with the procedure for collection of tax rather than the levy or assessment of tax. They contended that the matter should be returned to the High Court, Calcutta. However, the Tribunal found this argument untenable, citing Section 6 of the West Bengal Taxation Tribunal Act, 1987, which grants the Tribunal jurisdiction over matters relating to the collection and enforcement of any tax under any specified State Act. The Tribunal emphasized that its jurisdiction included all matters connected with or incidental to the collection and enforcement of tax, thus affirming its authority to adjudicate the case.

2. Legality of Memo. No. 2907 A. Tax dated August 31, 1984:
The applicants challenged the legality of Memo. No. 2907 A. Tax dated August 31, 1984, which directed them to revert to the stamp affixation method for paying entertainment tax and additional surcharge. The respondents argued that the memo was issued in accordance with Sections 3 and 4 of the Bengal Amusement Tax Act, 1922, which prescribe the stamp affixation method as the statutory procedure for tax payment. The Tribunal upheld the legality of the memo, noting that the temporary cash deposit system was introduced only due to an acute shortage of stamps and that the government had the authority to revert to the statutory method once the supply of stamps improved.

3. Alleged failure of natural justice:
The applicants claimed that the memo was void and illegal because they were not given an opportunity to be heard before the new procedure was introduced, resulting in a failure of natural justice. The respondents countered that the cinema hall owners were merely directed to comply with the statutory provisions of the Bengal Amusement Tax Act, 1922, which had been in force since 1922. The Tribunal agreed with the respondents, stating that there was no failure of natural justice as the applicants were required to follow the statutory procedure. The Tribunal also dismissed the argument regarding the necessity for extra manpower and costs, noting that such requirements did not constitute an infringement of natural justice if they were needed to implement the provisions of the Act.

4. Validity of the procedure for collection of entertainment tax:
The applicants argued that the procedure introduced by the memo would necessitate manual affixation of a large number of stamps, resulting in extra manpower and costs. The Tribunal found this argument unreasonable, emphasizing that Section 4 of the Bengal Amusement Tax Act, 1922, clearly outlines the procedure for tax collection, which had been in place since 1922. The temporary cash deposit system was introduced only to address a temporary shortage of stamps, and the government had the authority to revert to the statutory method once the supply situation improved. The Tribunal concluded that the applicants had not demonstrated any genuine difficulties in complying with the memo and that their petition, if allowed, would render Section 4 of the Act inoperative.

Conclusion:
The applications in Cases Nos. RN-322(T) of 1992 and RN-323(T) of 1992 were dismissed. The Tribunal found that it had jurisdiction over the matter, upheld the legality of Memo. No. 2907 A. Tax dated August 31, 1984, and concluded that there was no failure of natural justice. The statutory procedure for tax collection as outlined in the Bengal Amusement Tax Act, 1922, was deemed valid and enforceable. There was no order as to costs.

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