2004 (3) TMI 729 - AT - VAT and Sales Tax

Summary

Issues:
Challenge to the vires of an amended schedule under the West Bengal Sales Tax Act, 1994.
Request for the matter to be heard by a larger bench due to the challenge.
Interpretation of section 24 of the Act, 1994 regarding tax-free goods and conditions for taxation.
Exhaustion of all forums before approaching the tribunal.
Barred application due to limitation period.

Analysis:

The application challenges the vires of column (2) of serial No. 81 of Schedule I to the West Bengal Sales Tax Act, 1994 as amended by the West Bengal Taxation Laws (Second Amendment) Act, 1995. The petitioner argues that the insertion of the expression "carpets and druggets when such textile fabrics are manufactured or made in India" in column (2) is illegal and ultra vires, violating section 24 of the Act, 1994. The petitioner contends that conditions and exceptions should only be noted in column (3) of Schedule I, not in column (2, as done in the amendment.

The State Representative argues that the amendment was made in accordance with legal principles and did not violate the Act, 1994. Additionally, it is claimed that the application is time-barred and that the petitioner did not exhaust all revisional forums before approaching the tribunal. The points for consideration include whether the application should be heard by a three-member bench, if all forums were exhausted before coming to the tribunal on the penalty issue, and if the application is barred by limitation concerning the goods' seizure.

The tribunal interprets section 24 of the Act, 1994, stating that tax-free goods are specified in column (2) of Schedule I, with exceptions and conditions in column (3). Since no conditions or exceptions were listed in column (3) for the tax-free textile fabrics manufactured in India, they remain tax-free. The tribunal concludes that the amendment is not illegal or ultra vires, as it did not infringe fundamental rights or contravene the Constitution.

The tribunal finds that the petitioner did not exhaust all forums against the penalty order and that the application was filed after the sixty-day limitation period. Therefore, the application cannot be entertained at this stage and is disposed of without costs. The petitioner is granted liberty to exhaust all appropriate forums before approaching the tribunal again.