1992 (1) TMI 335 - AT - VAT and Sales Tax

Summary

Issues:
1. Interpretation of section 5(1)(cc) of the Bengal Finance (Sales Tax) Act, 1941 regarding the concessional rate of tax for the Darjeeling Gorkha Hill Council (DGHC).
2. Authority of the DGHC as a part of the Government or a Corporation.
3. Validity of the affidavit-in-opposition filed by the Additional Commissioner of Commercial Taxes, Government of West Bengal on behalf of respondent No. 4.

Detailed Analysis:

1. The case revolves around the interpretation of section 5(1)(cc) of the Bengal Finance (Sales Tax) Act, 1941, specifically concerning the concessional rate of tax for the Darjeeling Gorkha Hill Council (DGHC). The applicant, a registered dealer, had been supplying cement to the DGHC at a 4% tax rate until a dispute arose when the tax rate was directed to be increased to 8%. The amendment to section 5(1)(cc) on August 16, 1991, included the DGHC for the concessional rate of tax. The tribunal had to determine whether the DGHC was entitled to the 4% rate before this amendment.

2. The issue of whether the DGHC could be considered a part of the Government or a Corporation was also raised. The applicant argued that the DGHC, established under the Darjeeling Gorkha Hill Council Act, 1988, was a delegated authority of the Government, thus eligible for the concessional tax rate. The tribunal analyzed the Act of 1988, the tripartite agreement, and the powers granted to the DGHC, concluding that while it could be seen as a delegated authority, it did not qualify as a Corporation under the Act.

3. The validity of the affidavit-in-opposition filed by the Additional Commissioner of Commercial Taxes, Government of West Bengal, on behalf of respondent No. 4 was challenged. The applicant contended that the authority of the Commissioner to swear the affidavit on behalf of respondent No. 4 was not established. However, the tribunal found that the Commissioner was authorized to act on behalf of the State Government, and therefore, the submissions made by the State Representative were considered valid.

In conclusion, the tribunal allowed the application, setting aside the memo directing the increased tax rate for the DGHC. It declared that the DGHC was entitled to the concessional tax rate under section 5(1)(cc) of the Act until August 15, 1991. The tribunal clarified that its decision was limited to the applicability of the section to the DGHC and did not delve into broader interpretations of the Act. The tribunal also granted a stay of operation of the judgment for eight weeks, maintaining the interim order passed earlier.