9911796707
TMI Blog1987 (5) TMI 362X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the petitioner had established the bona fide business for manufacturing goods in West Bengal for sale. One of the conditions of granting provisional certificate under rule 3(4)(ii) was that the petitioner shall apply to the Commercial Tax Officer for registration within a week from the date when his total sales in respect of manufactured goods in a year exceeded Rs. 10,000 in value for the first time. The provisional certificate under rule 3(4)(ii) was renewed for the period 1st April, 1978 to 31st July, 1978 as production could not be started by the petitioner till 31st March, 1978. The case of the petitioner is that since the sales of the manufactured goods exceeded Rs. 10,000 in value, the petitioner made an application before t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seven years as the case may be was made available to such small-scale industries which had started production for the first time after 31st March, 1978. The contention of the petitioner is that the petitioner had done some fabrication work on materials supplied by customers for which only labour charges were realised on or before 31st March, 1978. The petitioner, however, actually started production and sale of containers in the factory of the petitioner after 1st April, 1978. It is on record that for the first time the petitioner manufactured goods in its factory on 25th April, 1978 and the goods were sold on 27th April, 1978. Therefore, according to the petitioner, there is no reason why the extended benefit of tax holiday for a period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of materials supplied by others. The dealer's own production records clearly show that regular productions were made prior to 31st March, 1978. The Assistant Commissioner, Commercial Taxes, therefore, held that the dealer's production started prior to 31st March, 1978. His application for renewal of eligibility certificate beyond three years from his first sale was, therefore, rejected. The petitioner made a revision application against the aforesaid order of the Assistant Commissioner, Commercial Taxes, where it was noted that there was no dispute that the first sale of the petitioner's manufactured goods took place on 27th April, 1978. It was recorded that the dispute in this case centered around the point "as to whether the petitioner's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner of the unit alone". It was held that the petitioner had started production "even before 31st March, 1978", when he undertook to do fabrication work for other customers in his newly set up industrial unit. The petitioner has challenged the decisions of the Assistant Commissioner as well as the Additional Commissioner of Commercial Taxes. Rule 3 of the Bengal Sales Tax Rules, 1941 lays down that in calculating taxable turnover of the dealer, certain deductions will have to be allowed from its gross turnover. The deductions are set out in the various sub-clauses of rule 3. Rule 3(66) enables a dealer to deduct from his gross turnover "sales by newly set up small-scale industry of goods manufactured by it since the date of its first sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age setting up of small-scale industries for manufacture of goods in the State. With this object in view, it has been provided that sales of goods manufactured by a newly set up small-scale industry will not be liable to tax for a period of five years since the date of its first sale of such manufactured goods. Therefore, if there is a time-lag between setting up of the small-scale industry and the date of its first sale, the material point of time is not the date of setting up of the industry but the date of the first sale of such manufactured goods. The explanation which has been added has to be understood in the background of the main clause. The explanation provides, inter alia, that a new industrial unit will mean industrial unit which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law to merit the benefit of tax exemption. The period of the benefit has been extended from three years to five years. In order to qualify for this extended period, it must be shown that production in the newly set up industry started after 31st March, 1978. In that context, it has to be seen what is the meaning of the word "production". Does it mean production of goods on which sales tax is not leviable? The eligibility certificate granted to the petitioner valid from 1st April, 1980 to 30th June, 1980 by the Assistant Commissioner of Commercial Taxes clearly states that the small-scale industrial unit was "set up to manufacture metal containers for sale and the first sale of manufactured goods by the said industry was made on 27th April, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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