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TMI Blog1990 (11) TMI 355X X X X Extracts X X X X X X X X Extracts X X X X ..... making a second sale of such commodities is not required to pay sales tax under the 1954 Act. In Explanation 2 of section 6D of the 1941 Act, it has been laid down that the expression "goods" includes commodities specified for taxation under section 25 of the 1954 Act. Paper including photographic paper was taxable under the 1954 Act up to May 31, 1987 and thereafter it was brought within the purview of the 1941 Act. The applicant claims that, not being a manufacturer (for sale) or an importer, it is not liable to pay tax on deemed sales under section 6D of the 1941 Act, because the commodities had already suffered sales tax under the 1954 Act on a prior sale at the hands of either the importer or the manufacturer. Even when the commodity in question was brought within the purview of the 1941 Act under section 5(1)(cccc)(i), it was made taxable only on the first point and no further tax was payable on subsequent sales. The applicant's supplier, M/s. Photo Products Co. Pvt. Ltd. wanted declaration forms from the applicant for supplies made in the year 1989. Accordingly, the applicant made an application to the Commercial Tax Officer in the prescribed form on April 4, 1990, for iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from June 1, 1987, is exigible to tax under section 6D of the 1941 Act, when such paper is locally purchased and when it had already suffered sales tax at the first point of sale. 4.. The reason why it is said that a commodity taxable under the 1954 Act will not be exigible to tax at a second or subsequent point of sale, provided it has already suffered tax at the first point, is that the expression "dealer" in section 2(b) of the 1954 Act has been defined as a person who sells notified commodities which are manufactured, made or processed by him in West Bengal, or which are brought by him into West Bengal from outside the State for the purpose of sale. Section 4 of the Act makes only a "dealer" liable to pay tax. Therefore, in cases other than those governed by section 23A of the 1954 Act, second or subsequent sales or, in other words, resales of commodities on which tax has already been levied at an earlier stage, are not liable to tax again. It was not controverted by the learned State Representative that paper includes photographic paper and these goods were denotified from the 1954 Act and brought back to the fold of the 1941 Act with effect from June 1, 1987. He also did n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arly, a reference to the second proviso to section 5(1)(cccc)(i) of the 1941 Act is necessary to construe the extent of immunity envisaged in section 5(1)(cccc)(i). The said second proviso is set out below: "Provided further that the State Government may, if it is satisfied that it is necessary so to do in the public interest, by notification in the Official Gazette and subject to conditions as specified in the preceding proviso, direct that no tax shall be payable under the said proviso on sales of such goods as may be specified in the said notification issued in this behalf." Thus, the immunity from paying sales tax, as contemplated in section 5(1)(cccc)(i) of the 1941 Act, should ordinarily be restricted to the concessional rate of tax payable under the first proviso to section 5(1)(cccc)(i) and should ordinarily apply to no other tax. However, Mr. Sasanka Sen, learned Advocate for the applicant, contended that the legal position is otherwise and the above immunity extends to tax under section 6D of the 1941 Act. Mr. D. Majumdar, learned State Representative, opposed Mr. Sen's lines of reasoning. 8.. As regards the 1954 Act, Mr. Sen drew our attention to proviso (ia) of sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the overriding provision by means of the explanation 2, the correct interpretation is that the Legislature wanted to make section 6D a self-contained code relating to works contracts tax and it was intended to override section 23 of the 1954 Act including the proviso (ia) thereto. We are unable to hold that there can be a different interpretation, as put forward by Mr. Sen. Such being the position, the immunity from tax on second or subsequent sales generally available under the 1954 Act shall not be available in respect of and shall not extend to deemed sales in the execution of works contracts under section 6D of the 1941 Act, even though the same commodities might have already suffered tax on a prior sale. 10.. Mr. Sen, appearing for the applicant, referred to rule 3(108) of the Bengal Sales Tax Rules, 1941, which reads like this: "Sales of goods on which no tax is payable under the second proviso to clause (cccc) of sub-section (1) of section 5." By doing so, Mr. Sen contended that since no tax was payable on sales of goods under the second proviso to section 5(1)(cccc) of the 1941 Act, no tax under section 6D was also payable on such sales, i.e., second or subsequen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , on a prior sale thereof in West Bengal due tax under this Act or under the West Bengal Sales Tax Act, 1954 (West Bengal Act 4 of 1954), if such goods are notified for taxation under that Act, is shown to the satisfaction of the Commissioner to have been paid; (b) .............................................. (c) contractual transfer of goods, sales of which are generally exempt from tax under sub-clause (vi) of clause (a) of sub-section (2) of section 5;" It may be mentioned that there was no submission that the exemption claimed might be also claimed under any other clause of section 6D(2). Now, as regards clause (a) of section 6D(2), it is undisputed that paper is not one of the declared goods of special importance under section 14 of the Central Sales Tax Act, 1956. So, it is not a goods referred to in section 14 of the 1956 Act. That being so, clause (a) of section 6D(2) has clearly no application at all. When section 5(2) and its clause (a)(vi) are read along with rule 3 and its sub-rule (108), it will clearly appear that rule 3 including sub-rule (108) was framed under section 5(2)(a)(vi) of the 1941 Act. It will further appear that the beginning words of section 5(2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Finally, Mr. Sen, appearing for applicant, relied on Memo. No. 20160-C.T. dated December 4, 1985, signed by the Public Relations Officer of the Directorate of Commercial Taxes, West Bengal. By that memorandum, the officer drew the attention of the Deputy Secretary, East India Photographic Traders Association to Trade Circular No. 1/81 dated April 18, 1984, in which the following statement was made: "While calculating the amount of tax payable by a dealer under section 6D, the following shall be deducted from the 'contractual transfer price': (i) contractual transfer of 'declared goods' and/or commodities notified under the West Bengal Sales Tax Act, 1954, provided it can be proved that taxes on such goods have been duly paid earlier". Mr. Sen argued that the tax authorities explained in the above circular that commodities notified under the 1954 Act will not be subjected to tax under section 6D, if it is proved that tax had already been paid on such goods earlier. Mr. Sen cannot be said to have drawn a wrong conclusion from the aforesaid statement in the trade circular. But, the question is whether the trade circular gave a correct interpretation and, if not, should it overri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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