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TMI Blog1990 (12) TMI 314X X X X Extracts X X X X X X X X Extracts X X X X ..... ief Inspector of Factories for cancellation of the registration certificate under the Factories Act with effect from January 1, 1976, inter alia, on the ground that the strength of workers had come down below the statutory limit since December, 1975. On January 13, 1981, it again wrote to the Chief Inspector for taking action on its earlier application dated July 6, 1976. Thereafter the Chief Inspector made certain queries and ultimately intimated by a communication dated November 11, 1981, that the name of the applicant's factory had been removed from the record with effect from January 1, 1981. Allegedly the Chief Inspector acted without jurisdiction by allowing the prayer only with effect from January 1, 1981, which date was not relevant. The name should have been removed with effect from January 1, 1976. In the meantime, taxes were paid even after April 1, 1974, both on breads and biscuits in spite of the exemption under the 1941 Act. The commercial tax authorities assessed taxes which were duly paid. In or about the year 1978, the applicants came to know that "biscuit" was exempted from the 1941 Act and therefore they applied for refund of the taxes paid so far subsequen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n one lump, in that event the firm will be allegedly compelled to close its business. The writ application ended with prayers for quashing assessment orders for the years 1383 to 1386 BS, the orders passed by the Assistant Commissioner on January 14, 1982, in case No. 30 of 1980-81 and 1981-82, and also for quashing certificate proceedings being Certificate Case Nos. 362 to 365 (TS) (TL) of 1980-81 pending before the Certificate Officer, Alipore, 24-Parganas. 3.. The respondents' case in the affidavit-in-opposition is that "bread" has all along remained exempt from sales tax. Prior to April 1, 1974, biscuits were classified into those which are manufactured in factories as defined under the Factories Act and those made otherwise than in a factory. Factory-made biscuits were taxable under the West Bengal Sales Tax Act, 1954 and the other biscuits were taxable under the 1941 Act. With effect from April 1, 1974, biscuits other than which are factory-made were wholly exempted from tax under rule 3 of the Bengal Sales Tax Rules, 1941. The applicant-firm applied for registration as a dealer under the 1941 Act on January 15, 1972 and registration was granted with effect from April 5, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een moved before the appropriate authority and hence it could not be held liable for taxes under the 1954 Act. Then the applicants allegedly agreed to pay the due amount of tax by December 10, 1980, but without making any payment, it filed the present application before the High Court challenging legality of the actions taken by the Commercial Tax Officer and disowning liability to pay tax. Following receipt of the information that it was registered as a factory, the Commercial Tax Officer took different steps including revision of the past assessments, but the proceedings for the years 1381 and 1382 BS were dropped due to certain legal complications. Fresh proceedings under the 1954 Act for assessment for the year 1383 BS had also to be initiated. It is stated that a conditional stay order was granted by the Assistant Commissioner in the appeals, the condition being to pay certain definite amount. That condition having not been fulfilled, the stay did not operate. Accordingly, the Commercial Tax Officer referred the matter to the Certificate Officer for recovery of the dues. Regarding the criminal case, it is said that the applicants were discharged, not on merits but on the failu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uary 15, 1955, which was effective from January 15, 1955, being issued under section 25 of the 1954 Act. (a) "Biscuits-Except when manufactured or processed in a factory as defined in the Factories Act, 1948 (63 of 1948);" (b) "Biscuit of all kinds except biscuit manufactured, made or processed in India otherwise than in a factory as defined in the Factories Act, 1948 (63 of 1948)." Thus, the two provisions under the two Acts together make the position clear that biscuits other than those manufactured in a "factory" as defined in the Factories Act, were, during the relevant years, exempt from tax under the 1941 Act and biscuits manufactured in a "factory" as defined in the Factories Act were, during the same period, exigible to tax under the 1954 Act. 7.. The expression "factory" has been defined in section 2(m) of the Factories Act, 1948, in the following manner: "'factory' means any premises including the precincts thereof- (i) whereon ten or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power, or is ordinarily so carried on, or (ii) whereon tw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e relevant biscuits were manufactured was a "factory" as defined in the Factories Act. Mr. P.K. Chakraborty, learned State Representative, submitted that the appropriate authority to determine this question was the Chief Inspector of Factories under the Factories Act. Prima facie, the contention of the learned State Representative seems valid. But it is necessary to read once again the relevant provisions in item 74 of Schedule I to the 1941 Act and the Notification dated January 15, 1955, issued under section 25 of the 1954 Act and to correctly interpret the same. We find that the definition of "factory" has been merely adopted from the Factories Act without anything more. Now-a-days adoptive or referential legislation is often resorted to in different enactments because of certain distinct advantages of such legislative drafting, like preventing to allow the text of the legislation to become unwieldy or too much lengthy and to utilise an old concept or expression which has acquired a settled position due to the passage of time and sometimes also due to judicial pronouncements. The relevant provisions under our consideration have not laid down as to who will determine whether a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nclusive to establish that the undertaking concerned is a factory. It has to be determined if the unit concerned falls within the definition of 'factory' in the statute." The above interpretation of the provisions of item 74 of Schedule I to the 1941 Act and the Notification dated January 15, 1955, under section 25 of the 1954 Act is all the more appropriate due to the words-"as defined in the Factories Act"-used therein. Had the words used been such as-"registered under the Factories Act"-a different interpretation might follow. 10.. Having gone through the impugned assessment orders made by the Commercial Tax Officer in respect of the years 1383 to 1386 BS (copies are filed as annexure "O" to the writ application), we find that the Commercial Tax Officer failed to record his satisfaction as to whether the workplace of the applicants was a "factory" as defined in the Factories Act. Without being satisfied about this requirement, he assessed the applicants under the 1954 Act, which he could not have validly done. The Factories Act prescribes authorities for carrying out the purposes of that Act. It provides for licensing of factories by such authorities, who are required to sat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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