9911796707
TMI Blog1993 (4) TMI 296X X X X Extracts X X X X X X X X Extracts X X X X ..... ttage and Small Scale Industries, Government of West Bengal. Although the first date of sale was March 31, 1979, the applicant did not apply for eligibility certificate (E.C.) for the first year, because during that period it had not incurred liability to pay tax under section 4(2) of the 1941 Act. It, however, applied for and obtained E.C. under rule 3(66) of the 1941 Rules for the period from April 1, 1980 to March 31, 1981, upon fulfilling all the conditions. Its prayer for renewal of E.C. for the period from April 1, 1981 to March 31, 1982, was granted. But applicant's prayer made on May 6, 1982 for renewal of E.C. for the period from April 1, 1982 to March 31, 1983, was rejected by the Assistant Commissioner by an order dated March 5, 1984, on the grounds that applicant had (i) failed to keep separate accounts in respect of the new industrial unit, (ii) failed to keep serially numbered cash/credit memos for sale of manufactured goods, (iii) had collected sales tax in respect of sales during 1980-81 and (iv) the application for renewal was out of time. Applicant then filed a revision petition before the Additional Commissioner who rejected the revision by an order dated April 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort. Allegedly, the applicant had maintained purchase and sale accounts of tea for three units, but all the transactions of three units were shown in a common ledger. No separate wage and salary accounts were maintained. No manufacturing accounts were maintained for the relevant unit for which exemption was sought for. Thus, according to the respondents, no separate accounts for the relevant manufacturing unit had been maintained. Without such separate accounts, it could not be ascertained whether the sales for which exemption from sales tax was claimed, related actually to sales of manufactured products of the new unit. The requirement of issuing serially numbered cash memos was allegedly violated by issuing cash memos with such numbers as1, 2, 3, 3A, 4, 4A, 5, 113 and 113A. Applicant had also collected sales tax from customers, while claiming exemption. Regarding demand of security under section 7(4a)(i), it is stated that the notice was issued upon receiving an information that the applicant had misused E.C. and withheld payment of tax on "huge amount of sales" under the coverage of rule 3(66). It failed to reply to the notice. The order demanding security was made allegedly in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the renewing authority is required to see, before granting renewal of E.C., whether the conditions prescribed in rule 3(66) have been fulfilled during the period for which renewal is wanted. Accordingly, contravention of a condition during 1980-81 cannot be, in our opinion, considered as a ground for rejection of renewal for the year 1982-83. 8.. The question of issuing "serially numbered cash/credit memos for sales of goods manufactured in such industry" was recently considered by us in the case of J.K. Bansal Co., R.N. 259(T) of 1992*. The judgment in that case was delivered by us on February 24, 1993. We had observed there as follows: "...............The intention of the provision is that a unit claiming benefit under rule 3(66a) should keep not only separate accounts but also issue serially numbered cash memos for the sale of manufactured product so as to distinguish his manufacturing business from any other business he may have." Rule 3(66a) is in pari materia with rule 3(66). Hence, the intention of the requirement being as above, a dealer claiming exemption under rule 3(66) ought to duly comply the requirement. Mr. Bajoria relied on a judgment of S.C. Sen, J., of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition in rule 3(66) that the dealer "maintains other records to prove that sales claimed exempt under this clause were of goods manufactured in such an industry set up by him". The object is that the authorities should be satisfied that the goods sold were actually manufactured in the new unit. In order to arrive at such satisfaction, the importance of separate accounts of the manufacturing unit regarding its activities cannot be over-emphasised. We do not agree with Mr. Bajoria's submission that a remand would be called for, because allegedly the authorities below gave their finding on the basis of books of account for the year 1980-81. It will appear from the revisional order of the Additional Commissioner and also from the writ petition that the allegation is not correct. True, the authorities acted upon collection of sales tax during 1980-81, but they did not commit the same mistake on the point of maintenance of separate accounts. The records and books of account for the relevant period were duly examined and considered by them. In such circumstances, no remand is warranted. There is no justification for giving the applicant an opportunity to produce any fresh set of account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sufficient reasons to be recorded in writing- (i) demand from any registered dealer or any person who has applied for registration under this Act, after giving such dealer or person an opportunity of being heard, reasonable security for the proper payment of tax payable by him under this Act." In the present case, the security was demanded because the prayer for renewal was refused and the tax has to be paid by the applicant. Mr. Bajoria contended that this can hardly be a "good or sufficient" reason. He argued that the question of payment of tax would arise on assessment in consequence of refusal of renewal of E.C. and unless a dealer makes default in paying assessed tax, there cannot be a good or sufficient reason to demand security for proper payment of tax. Learned State Representative submitted that refusal of renewal of E.C. leads to applicant's liability to pay tax and that is a good or sufficient reason to demand security. Disagreeing with the view taken by the learned State Representative, we are of the opinion that there was no good or sufficient reason to demand security in this case, merely because the prayer for renewal of E.C. was rejected and liability to pay ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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