9911796707
TMI Blog1991 (11) TMI 230X X X X Extracts X X X X X X X X Extracts X X X X ..... Rules, 1941, as amended, and rule 26B of the Bengal Sales Tax Rules and form IIIC as introduced, with effect from June 1, 1990, by Notification No. 1761-F.T. dated June 1, 1990. After the affidavits had been filed by both the parties, the application came up for hearing on January 30, 1991. At the time of hearing, the learned State Representative produced copies of the West Bengal Taxation Laws (Second Amendment) Ordinance, 1990, being Ordinance No. 4 of 1990 and Government of West Bengal, Finance Department, Taxation Branch Notification No. 106-F.T. dated January 8, 1991, whereby substantial amendments to the existing provisions of tax payments by the registered dealers in West Bengal were made. It was submitted by the learned State Representative that in view of the changes introduced in the said Ordinance and the notification, the applicants might not have any grievance. The learned advocate for the applicants did not, however, accept this position and wanted to file a supplementary affidavit in this regard. He was allowed to do so. Thereafter affidavits were exchanged. 3. In the main application the grievance of the applicants related to (a) prescription of filing monthly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the matter of collection of tax, the new provision contemplates advance payment of tax on estimate-basis where the dealer has not been able to collect such tax from his customers because of the practice of credit sales prevailing in the trade. It was in consideration of such difficulty that the State Government originally prescribed that quarterly tax was to be paid along with quarterly returns and not before the expiry of 30 days from the end of the quarter. There is no reasonable justification for deviating from such a procedure, which has been existing in law ever since 1941 when the Bengal Sales Tax Rules came into being. 5.. The second allegation is with regard to the trade circular, wherein a procedure of verification of returns by a team of officers well in advance of regular assessments has been laid down. The circular envisages that a team of Commercial Tax Officers and Inspectors will be visiting the dealers for the purpose of verification as indicated above on a fairly regular basis. The case of the applicants is that there is no provision in the statute for such verification by a team of officers on a regular basis and that this is an indirect way of doing somethin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial to the main cause of action or, in other words, the reliefs prayed for are consequential to one another. 8.. Sub-rule (5) of rule 5 provides "that an application shall not claim relief or reliefs based on more than a single cause of action in one single application unless the reliefs prayed for are consequential to one another". The main cause of action obviously is the change in the mode of payment of tax and submission of returns and the scheme of verification of such returns by a team of officers as envisaged in the trade circular arises out of, and is intimately connected with, the said change in the mode of payment and submission of returns. This is not a case of clubbing together of two causes of action. This objection with regard to maintainability, therefore, is overruled. 9.. The main objection of the applicants to the introduction of the new scheme of payment of tax is based on the contention that it is not possible for the registered dealers to realise tax from their customers within the specified period of 21 days, but they have to pay the tax to the State before the expiry of the said period out of their own coffers. According to them, it is unreasonable to ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, constitutional and reasonable. 12.. It is well-settled that sales tax is attracted as soon as a sale takes place and payment of such tax becomes statutorily due irrespective of the fact whether these are credit sales or cash sales. [Associated Cement Co. Ltd. v. Commercial Tax Officer [1981] 48 STC 466 (SC). "Sales tax being a State subject, it is for each State to determine the methods it will adopt to collect its revenue from this source and to decide which methods would be most efficacious for this purpose." [Khazan Chand v. State of Jammu and Kashmir [1984] 56 STC 214 (SC). Section 10 of the Bengal Finance (Sales Tax) Act, 1941, lays down that tax payable under the Act shall be paid in the manner provided therein at such intervals as may be prescribed. In the rules provision has been made for payment at intervals and 21 days' time has been allowed for each of the first two months and 30 days for the quarter. The dealer thus gets not less than 21 days in any case to pay his tax on sales already completed. Though the liability to pay taxes arises as soon as the sale is completed, State has the option to prescribe a convenient mode of realising the tax. There does no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese aims on a fairly regular basis. We earnestly seek the cooperation in this endeavour of all dealers, legal practitioners and the different Chambers of Commerce/Federations of Traders. We do not intend to cause any discomfiture or inconvenience to the dealers. The dealers may be advised to file correct returns and keep up to date books of accounts in their places of business so that the verification of returns/statements can be done easily. We will like to clarify that these visits are not part of any search and seizure operation. On the other hand, these visits will help in acceptance of returns/ statements and their assessments and save the dealers the formality of interest payment for unnecessarily long periods till completion of assessment and also the botheration of visiting our offices too often. Co-operation of all concerned is solicited. Yours faithfully, Sd/Swapan Chakraborti Commissioner, Commercial Taxes, West Bengal. June 2, 1990 Memo No. 8530(70)C.T. dated June 4, 1990. 16.. Initially, a point was urged by the learned State Representative that the circular in question was a purely administrative communication and was not even an order as contemplated in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be no right arising out of mere executive instructions, much less a vested right, and if such instructions were changed pending any appeal, there would be no change in the law pending the appeal so as to affect any vested right of a party. 18.. These two decisions do not help the respondents as these are only warrant for the proposition of law that no rights can be claimed for enforcement on the basis of an administrative order under article 226. Here the case is different. The trade circular is sought to be quashed on the allegation that it is violative of the statute and is adversely affecting the rights and interests of the parties. 19.. Mr. Bose, on the other hand, argued that even administrative orders can be challenged under writ jurisdiction and if these are patently violative of the statutory provisions, these are liable to be quashed. He cited the case of Ram Co. Coke Industries v. Commissioner of Sales Tax [1986] 61 STC 212, decided by the Allahabad High Court. It was held in that case that the discretion to fix amount of security having been vested in the assessing authority by the statute, the Commissioner has no jurisdiction to issue circulars specifying the amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fect nothing but search and seizure operations. According to him, it is a disguised or colourable exercise of search and seizure operation by an administrative order, which does not have the sanction of law. He argued that under sub-section (4) of section 14 of the Bengal Finance (Sales Tax) Act, 1941, a search can be made only for the purpose of sub-sections (2) and (3) of that section. He emphasised the preexistence of a purpose so specified as a condition precedent for holding a search. He referred to a decision of the Division Bench of the Calcutta High Court in State of West Bengal v. Oriental Rubber Works [1977] 39 STC 333 that "when a search and seizure was made for the purpose of sub-section (3), before the authority competent to make a search under sub-section (4) goes to conduct a search, he must necessarily hold a bona fide suspicion that the person whose premises is to be searched is a dealer, who is evading or attempting to evade payment of taxes". He emphasised the fact that without such a mental state no search could be conducted and to look into the accounts, registers and documents of the dealer in his place of work without that pre-condition being fulfilled would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in Bharat Traders v. Commercial Tax Officer [1977] 39 STC 206 that the power under section 14(1) is to be exercised for the purpose of assessment under section 11 and it is a step in aid of a proceeding for assessment under section 11. The provision for surprise visit in rule 69 of the Bengal Sales Tax Rules, 1941, is also for the purpose of aiding in a proceeding under the Act. He also emphasised the fact that sub-section (5) of section 10 speaks of certain conditions, viz., discovery of error or omission in the return or reasonable belief upon information or otherwise about the incorrectness of the returns to justify action by the tax authorities. 27.. We are in agreement with the views of Mr. Bose that a visit to the place of business of the dealer cannot be undertaken by the tax authorities just for the sake of it; it has to be for a specific purpose sanctioned by law and has to be made within certain specified legal parameters. There does not appear to be any legal sanction for a scheme of verification of returns at the place of business of the dealer by a team of officers on a regular basis. 28.. It is obviously not a purely administrative order but an order introd ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
