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TMI Blog1962 (12) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... oprietors of the properties left by him. After necessary enquiries the change of ownership of the business was recorded by the Commercial Tax Officer on 11th November, 1956, and the certificate of registration was amended accordingly. Before his death Jogesh in his business of Jogesh Chandra Gon became liable to pay sales tax for four quarters ending Chaitra 1361 B.S. He filed returns after the expiry of the prescribed time. After his death the petitioners filed a revised return. By his order dated 25th September, 1957, the Commercial Tax Officer assessed the amount of tax due from the dealer Messrs Jogesh Chandra Gon and also directed the dealer to pay a penalty of Rs. 750 for non-submission of return within time. An appeal from this order was dismissed by the Assistant Commissioner of Commercial Taxes, Burrabazar Circle, by his order dated 9th July, 1950, and a petition of revision under section 20(3) was dismissed by the Additional Commissioner, Commercial Taxes, West Bengal, by his order dated 17th July, 1959. The petitioners have moved this High Court against this order and have obtained this rule under Article 227 of the Constitution of India. Mr. Pal appearing on behalf of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the registered dealer and that it is not attracted to the case of an intestate succession to the business. We have come to the conclusion that this contention is unsound and should be rejected. There is a transfer by operation of law in the case of intestate succession. The expression "is transferred absolutely" is of wide import and is broad enough to include absolute transfers by operation of law including an absolute transfer on intestate succession. The section applies to all cases where the business "is transferred absolutely" and is purposely not limited to transfer by act of the owner. A transfer by way of lease is a transfer by an act of the owner and Mr. Pal therefore suggested that the general words "transferred absolutely" should receive an ejusdem generis construction and should be limited to cases of transfer by the owner. But the mention of the specific case of a transfer by an act of the owner does not establish a genus and does not limit the generality of the preceding words. Moreover by repeating the word "transferred" after the word "or", the section places the two classes of absolute transfers and transfers by way of lease in separate categories. Mr. Pal referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o declare its meaning; in such cases the later Act operates directly by its own force. But where the provisions of the later Act could only operate indirectly as an aid to the construction of words in the earlier Act those provisions can only be used for that purpose if certain conditions apply to the earlier Act when it is considered by itself." Now the West Bengal Act 13 of 1959 plainly shows the legislative intention that the expression "is transferred absolutely" covers transfers by sale, gift, bequest, inheritance or otherwise. The expression "is transferred absolutely" in the section as it stands after the amendment by West Bengal Act 13 of 1959 cannot receive the construction that it is limited to transfers by act of the owner. The amending Act is not retrospective; nevertheless if it is taken into account as an aid to the construction of the expression "is transferred absolutely" in the section as it stood before the amendment, it shows the legislative intention that the expression is broad enough to cover cases of transfers by inheritance or otherwise. In the instant case upon the death of the registered dealer Jogesh Chandra Gon his business stood transferred absolutely t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The current view of the Supreme Court appears to be that a tax law may be challenged on these grounds: see Chottabhai Jethabhai Patel and Co. v. Union of IndiaA.I.R. 1962 S.C. 1006. Now the liabilities imposed by section 17 upon the petitioners are restrictions on the exercise of their right to carry on the business of Messrs Jogesh Chandra Gon and to hold it. The point in issue is whether the section imposes reasonable restrictions on the exercise of those rights in the interest of the general public and as such is saved by Article 19(5) of the Constitution. To determine this issue we must take into account the scheme of the Bengal Finance (Sale Tax) Act, 1941, the underlying policy and purpose of section 17 of the Act and the nature and extent of the restrictions imposed any it. Broadly speaking, the scheme of the Act is as follows. The dealer is liable to pay tax and to submit returns as required by sections 4, 5 and 10 read with rules 17 to 48, to assessment and levy of taxes and penalties under section 11 read with rules 49 to 58, to keep accounts under section 13 and to produce and give inspection of the accounts, registers and documents and to give inspection of and furnish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... four years from the end of the year in respect of which the assessment is made. Besides, section 10 read with rules 17 to 48 requires submission of returns and payment of tax monthly, quarterly, half-yearly and annually as the case may be. An honest dealer would presumably file correct returns and pay the tax due within the prescribed period. Moreover the transfer of itself does not impose any liability on the transferee under section 17. He is saddled with liability under section 17 only if he carries on the business after the transfer. If he does not desire to be saddled with the liabilities of the original dealer, he may discontinue the business. It is also to be observed that section 17 not only imposes liabilities but also confers valuable rights upon the transferee who carries on the business after the transfer. He is treated for all the purposes of the Act as if the registration certificate in respect of the business had initially been granted to him and he is entitled to have the registration certificate amended accordingly. Consequently, such a transferee is entitled to carry on the business as if he is a registered dealer, to obtain forms of declaration on application un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. We reject the contention on behalf of the petitioners that the restrictions imposed by section 17 are unreasonable because that section renders the transferee punishable for the acts and omissions of the original dealer. We have therefore come to the conclusion that section 17 is not an infraction of the fundamental rights guaranteed by Article 19(1) (f) and (g) of the Constitution and that the law is saved by Article 19 (5) of the Constitution. No other contentions were advanced before us. As we have come to a clear conclusion that there has been no infringement of the fundamental rights guaranteed by Article 19, no question of staying the proceedings in view of the Proclamation of Emergency under Article 352 of the Constitution and the Presidential orders passed under Article 359 of the Constitution arise. It may be noted that the Proclamation of Emergency was made after the conclusion of the arguments on 20th September, 1962, and that neither party applied for stay of the proceedings. The petitioners have made out no grounds for quashing and setting aside the order complained of. The rule is discharged. There will be no order as to costs. CHATTERJEE, J.-I entirely agree w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies are expected to do on such information? The answer is in section 7(4). The Commissioner on getting such information may from time to time "amend any certificate of registration in accordance with the information furnished under section 16 or otherwise received." Because of such amendment of the certificate under the provisions of section 7(4), the persons whose names are introduced by amendment in the registration certificate become liable under section 10(2) to furnish returns by such date to such authority as may be prescribed. The position, therefore, is that the "dealers who sell or otherwise dispose of their business" or the legal representatives of the deceased will give the information under section 16 whereon their names would be included in the certificate of registration under section 7(4) and they would thus be liable under section 10(2) as registered dealers as also if they fail, they would be liable under section 11. The next question is: what would be the extent of the liability of the persons whose names are so recorded in the certificate of registration? It may be that the liability would accrue with effect from the date of the amendment or from the date of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... include transfer by operation of law? In such context we are to interpret the meaning of the word "transfer" in the aforesaid section 17. The word "transfer" is a word of general import. We are aware that transfers may be by act of parties as also by operation of law and "transfer" may sometimes mean merely transfer by act of parties. The context here is not the context of any particular type of transfer but the context is that of a changing over from one dealer to another. Section 17 defines the rights and liabilities of the transferee, the right is to have his name registered in the registration certificate to carry on the same business and the liability is to the same extent as if his name was initially registered. Should we interpret the word "transfer " in a broad sense or in a restricted sense? If we accept the meaning of the word "transfer" as suggested by Mr. Pal to denote transfer by act of parties only, the result would be, the liability of transferees by operation of law would remain undefined and uncertain. The purpose of the Act was to get revenue and if the transferees by operation of law would escape the provisions there, then the avowed object of gathering revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... solutely or by way of lease" refers to the quantum of transfer but does not refer to the manner of transfer, i.e., whether the transfer takes place by act of parties or whether transfer takes place by the provisions of law. The intention of the Legislature is not to restrict the word "transfer" to the act of parties; we have no doubt that the word "transfer" in the context of section 17 of the Bengal Finance Act includes transfer by operation of law because of death. The next point that has been urged is that the section itself offends the provisions of Articles 19(1)(f) and 19(1)(g) of the Constitution and it is, therefore, void. It has been urged that the transferee would be liable as if his name had been initially registered. It is suggested that he would, therefore, be liable to be punished under section 22 of the Bengal Finance Act. That section says: "(1) Whoever- (a) carries on business as a dealer in contravention of sub-section (1) of section 7;............... (e) fails, when required so to do under section 13, to keep prescribed accounts, (g) knowingly produces incorrect accounts, shall be punishable with simple imprisonment..............." It has been stated th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Supreme Court refused to interfere on the same ground. We have been referred to a case reported in Balaji v. Incometax Officer A.I.R. 1962 S.C. 123; 43 I.T.R. 393.. In that case it was stated that the broad proposition submitted by the Additional Solicitor-General that a tax law cannot be questioned on the ground that if infringes Article 19 of the Constitution could not be accepted. Their Lordships were of opinion that that broad proposition was rejected in the case of Moopil Nair v. State of KeralaA.I.R. 1961 S.C. 552. In the case from Kerala it was found that the assessee, the taxpayer, had no opportunity to contest the levying of the tax and it was, therefore, considered that principles of natural justice were violated and, therefore, it was considered, there would be infringement of Article 19(1)(f). In Balaji's case (1), the principle was accepted but on a consideration of the restriction their Lordships in the Supreme Court were pleased to find that the restrictions were reasonable. In the two aforesaid cases, Ramjilal's case [1951] 1 S.C.R. 127; 19 I.T.R. 174. was not considered but in Chhotabhai Jethabhai Patel and Co. v. Union of India A.I.R. 1962 S.C. 1006., all t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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