1998 (8) TMI 589 - AT - VAT and Sales Tax

Summary

Issues:
Interpretation of tax notifications under the West Bengal Sales Tax Act, 1954; Exhaustion of revisional remedy before approaching the Tribunal; Stay of realisation of interest and difference of tax pending revisional remedy.

Interpretation of Tax Notifications:
The case involved a dispute regarding the classification of Horlicks under specific tax notifications issued under the West Bengal Sales Tax Act, 1954. The key question was whether Horlicks fell under Notification No. 886-F.T. dated May 1, 1955, with a tax rate not exceeding 11%, or under Notification No. 763-F.T. dated March 29, 1994, or 790-F.T. dated April 2, 1957, with a higher tax rate of 15%. The authorities had assessed Horlicks at the higher tax rate based on their interpretation, leading to the application challenging this assessment.

Exhaustion of Revisional Remedy:
The applicants had not pursued the statutory route of moving the West Bengal Commercial Taxes Appellate and Revisional Board for revision before approaching the Tribunal. The counsel for the applicants argued that the Tribunal could entertain the application despite this, while the advocate for the respondents contended that the revisional remedy should be exhausted before approaching the Tribunal. The Tribunal emphasized the importance of allowing all quasi-judicial authorities to decide on factual questions before resorting to constitutional remedies under articles 226 and 227 of the Indian Constitution.

Stay of Realisation of Interest and Tax Difference:
The Tribunal ultimately decided not to entertain the application due to the failure to exhaust the revisional remedy. However, it directed the applicant-company to file a revision before the West Bengal Commercial Taxes Appellate and Revisional Board within the specified period. Pending the revision, the respondents were instructed not to realize the interest amount or the difference in tax for the relevant period. The Tribunal also extended the period of limitation by the time spent in the Tribunal proceedings.

In conclusion, the Tribunal disposed of the application without delving into the merits of the case, emphasizing the need for the applicant to exhaust the revisional remedy before seeking constitutional remedies. The decision highlighted the procedural importance of following statutory avenues before approaching higher forums, ensuring all quasi-judicial bodies have the opportunity to adjudicate on factual and interpretational issues before constitutional intervention.