1997 (2) TMI 535 - AT - VAT and Sales Tax

Summary

Issues:
1. Interpretation of the expression "for resale by him in West Bengal" in section 5(1)(bb) of the Bengal Finance (Sales Tax) Act, 1941.
2. Applicability of the new Explanation added to section 17 of the West Bengal Sales Tax Act, 1994, with effect from 1st May, 1995.
3. Misuse of declaration forms in form XXIVA issued to the applicant for export sales.
4. Withholding issuance of declarations in Form XXIVA based on the alleged violation of section 5(1)(bb) by the applicant.
5. Jurisdiction and decision-making power of respondent No. 1 regarding the issuance of declaration forms.

Analysis:

1. The case involved the interpretation of the expression "for resale by him in West Bengal" in section 5(1)(bb) of the Bengal Finance (Sales Tax) Act, 1941. The applicant argued that the expression should be construed to include inter-State sales and sales in the course of exports based on the recent amendment to section 17 of the West Bengal Sales Tax Act, 1994. The applicant relied on conflicting decisions of the Supreme Court to support their interpretation.

2. The respondents, on the other hand, acknowledged that the new Explanation added to section 17 of the West Bengal Sales Tax Act, 1994, did not apply retroactively but contended that even under section 5(1)(bb) of the Act of 1941, the intention was always to include inter-State sales and export sales in the expression "for sale in West Bengal." They referred to the Explanation below section 23A of the West Bengal Sales Tax Act, 1954, and the Statement of Objects and Reasons to the West Bengal Sales Tax (Amendment) Bill, 1997, to support their stance.

3. The issue of misuse of declaration forms in form XXIVA for export sales was raised by respondent No. 1, who rejected the applicant's petition for declaration forms on the grounds that the sales were made by way of export and not within West Bengal. The applicant sought to quash this order and requested the issuance of declaration forms according to rule 27AA of the Bengal Sales Tax Rules, 1941.

4. The application was made under section 8 of the West Bengal Taxation Tribunal Act, 1987, concerning the withholding of issuance of declarations in Form XXIVA due to the alleged violation of section 5(1)(bb) by the applicant through export sales.

5. The Tribunal, after considering the arguments presented by both parties, held that the export sales made by the applicant should be treated as sales made in West Bengal in terms of section 5(1)(bb) of the Act of 1941. Consequently, the order rejecting the prayer for declaration forms was quashed, and respondent No. 1 was directed to issue the declaration forms by a specified date, treating the applicant's export sales from West Bengal as sales made in West Bengal. The main application was disposed of without any order for costs.