2003 (4) TMI 536 - HC - VAT and Sales Tax

Issues Involved:
1. Jurisdiction of the High Court under Article 226 of the Constitution.
2. Nature of the sale: Whether it is an inter-State sale.
3. Application of the Central Sales Tax Act, 1956, and the West Bengal Sales Tax Act, 1994.
4. Authority and power of seizure under the respective Acts.
5. Jurisdiction of the West Bengal Taxation Tribunal.

Detailed Analysis:

Jurisdiction of the High Court under Article 226 of the Constitution:
The appellant's goods were seized under the West Bengal Sales Tax Act, 1994 ("State Act"), and the appellant sought to quash the seizure and penalty proceedings through a writ petition. The single Judge dismissed the writ petition, citing the West Bengal Taxation Tribunal Act, 1987 ("1987 Act"), which conferred exclusive jurisdiction on the Tribunal. The High Court's jurisdiction under Article 226 was argued to have ceased, except when routed through the Tribunal, as per the decision in *L. Chandra Kumar v. Union of India*.

Nature of the Sale:
The appellant argued that the sale was an inter-State sale under Section 3 of the Central Sales Tax Act, 1956 ("Central Act"), as it occasioned the movement of goods from West Bengal to Assam. The respondent contended that the sale did not become inter-State until the goods crossed the state border. The court concluded that the sale was inter-State as soon as the movement of goods commenced, irrespective of whether the goods crossed the border or were seized before crossing.

Application of the Central Sales Tax Act, 1956, and the West Bengal Sales Tax Act, 1994:
The appellant argued that actions taken under the State Act for inter-State sales should be deemed actions under the Central Act due to the legal fiction created by Section 9(2) of the Central Act and Rule 11 of the Central Sales Tax (West Bengal) Rules, 1958. The court agreed, stating that the Central Act adopts the State Act's mechanism for enforcement purposes, making actions under the State Act in relation to inter-State sales actions under the Central Act.

Authority and Power of Seizure:
The respondent argued that the Central Act does not provide for seizure, and thus the seizure was governed by the State Act. The court noted that Section 9(2) of the Central Act allows state authorities to enforce the Central Act using the State Act's provisions. Therefore, seizures made under the State Act for inter-State sales are deemed actions under the Central Act.

Jurisdiction of the West Bengal Taxation Tribunal:
The court examined whether the matter fell within the Tribunal's jurisdiction under the 1987 Act. It determined that the Tribunal's jurisdiction is confined to matters related to the State Acts specified in the Schedule of the 1987 Act. Since the Central Sales Tax Act is not a specified State Act, the Tribunal could not assume jurisdiction over inter-State sales governed by the Central Act. Consequently, the High Court's jurisdiction under Article 226 was not ousted.

Conclusion:
The appeal was allowed, and the order of the single Judge was set aside. The writ petition was remanded to a single Judge of the High Court for a decision on the merits. The court emphasized that actions taken under the Central Act using the State Act's mechanism remain actions under the Central Act, and thus, the Tribunal constituted under the 1987 Act cannot assume jurisdiction over such matters. The High Court retained jurisdiction to hear the writ petition.

Stay of Judgment:
The operation of the judgment was stayed for three weeks upon the respondents' counsel's request.

Judgment:
Writ appeal allowed.

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