9911796707
TMI Blog1993 (10) TMI 339X X X X Extracts X X X X X X X X Extracts X X X X ..... 1990. The first sale was made on March 31, 1990. The applicant is a dealer registered under the Bengal Finance (Sales Tax) Act, 1941 and also under the Central Sales Tax Act, 1956. The applicant is registered as a small-scale industrial unit with the Directorate of Cottage and Small Scale Industries, Government of West Bengal. Rule 3(66a) of the 1941 Rules provides that no tax is required to be paid by a dealer on sales of commodity or commodities manufactured by him in a newly set up small-scale industrial unit for three years from the commencement of first sale if the unit is situated within Calcutta Metropolitan Planning Area and for five years if it is situated elsewhere in West Bengal subject to the conditions noted in the said rule. All the conditions mentioned in rule 3(66a) of the 1941 Rules were duly satisfied by the applicant and after satisfying the conditions of the said rule, the applicant made an application before respondent No. 2 for grant of eligibility certificate under the said rule for the period from March 31, 1990 to March 30, 1991. The application for eligibility certificate dated April 24, 1990 was actually filed on April 25, 1990. On receiving the applicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, be quashed and a direction should be issued to grant eligibility certificate. The applicant's further case is that the applicant has suffered huge loss and damages for the unusual delay in disposing of his application for grant of eligibility certificate. 3.. The case has been contested by the respondents by filing an affidavitin-opposition. Their case, in short, is that the applicant was found to have used the trade mark "Merino" on the products manufactured by it. The applicant has clearly violated condition No. (vi) appended to Explanation to rule 3(66a) of the 1941 Rules. The said condition nowhere stipulates that the existing industrial unit should be located in West Bengal. The applicant uses a roller on which ink is used and by passing the roller on the plywood, an impression containing the trade mark "Merino" has been given on each and every plywood. The respondents deny that the owner of the trade mark "Merino" supplied the stickers for the purpose of pasting them on the plywood meant for supply to M/s. Merinoply and Chemicals Ltd. The order rejecting the application for eligibility certificate is a valid order and so the present application should be rejected. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicant. 6.. There is no dispute that the impugned orders dated July 31, 1991 and February 1, 1992 passed by the learned Assistant Commissioner and the learned Additional Commissioner respectively rejecting the applicant's petition for eligibility certificate are on the ground of violation of condition No. (vi) appended to the Explanation to rule 3(66a) of the 1941 Rules. No other ground has been taken by the authorities concerned for rejecting the application for eligibility certificate. Condition No. (vi) to rule 3(66a) of the 1941 Rules is as under: "(vi) which does not use the trade mark or the brand name of any product of an existing industrial unit." The relevant part of the impugned order dated July 31, 1991 may be quoted as under: "On February 16, 1991 when I visited the dealer's factory, I found considerable stock of finished plywood manufactured by the dealer awaiting despatch. Inspection of such stock revealed that the dealer is using the trade mark 'Merino' for his products and 'Merino' is the registered trade mark owned by M/s. Merinoply and Chemicals Ltd. of 5, Alexander Court, 60/1, Chowranghee Road, Calcutta-20. This is a clear violation of one of the pre-c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on each and every plywood by moving the roller on the plywood. The applicant by an affidavit-in-reply has sought to explain the impression by roller. In paragraph 7 of his affidavit-in-reply, it has been stated that the respondents' allegation that the impression containing the trade mark "Merino" was found on each and every plywood is contrary to the inspection report which was made at the time of visiting the petitioner's factory. It has been further stated that in addition to the sticker "Merino" a rubber stamp was also used in which the Product Merino Group/ Merino Group Product was embossed on the manufactured product which was meant for supply to the said company. In that rubber stamp, the actual brand name and/or trade mark of the petitioner was also embossed so as to show that the said products were manufactured by the petitioner. It may be noted here that the applicant has annexed copies of bills made by the applicant on the sales to M/s. Merinoply and Chemicals Ltd. and also to others, and copies of specimen of the rubber stamp used by the applicant in respect of products manufactured for M/s. Merinoply and Chemicals Ltd. and other companies. These have been marked annex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commercial Tax Officer, copy of which was supplied to the learned Assistant Commissioner, the applicant clearly stated that their brand name/trade mark is C.W.R. plywood Pelican/Penguin brand. In the said letter, they have pointed out that they have never used the brand name "Merino" on their product at the time of manufacture and clearance of the goods from their factory to the customers. At the instance of M/s. Merinoply and Chemicals Ltd. and under their instruction, they have stamped or pasted a sticker indicating Merino Group Product over and above the brand name Pelican and Penguin. 9.. We have noted above that the only ground for rejecting the application for eligibility certificate is violation of condition No. (vi) appended to the Explanation. The learned Assistant Commissioner's order dated July 31, 1991 tends to show that he found the sale bills for sales of plywood in order. It indicates that he had examined the sales. There is no indication in his order that verification of sales revealed sale of plywood to purchasers other than M/s. Merinoply and Chemicals Ltd. by using the trade mark "Merino". The order of the learned Additional Commissioner quoted above clearly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erved that the word "use" must take its colour from the context in which it is used. There is some force in Mr. A. Chakraborty's contention that the word "use" in condition No. (vi) suggests something done purposefully to enhance the prospects of the new industrial unit and that the word "use" cannot suggest in the context a limited use in pursuance of the agreement for such limited use. Mr. Chakraborty's contention is that the applicant's sale of plywood to purchasers other than M/s. Merinoply and Chemicals Ltd. was done with the brand name of the applicant and not with the brand name "Merino" and so the applicant cannot be said to have-used the trade name or brand name of a product of any existing industrial unit. Mr. Chakraborty has further relied upon a decision of this Tribunal in the case of P.C.I. Papers (Private) Ltd. v. Additional Commissioner of Commercial Taxes, West Bengal reported in [1995] 96 STC 251 supra; [1990] 23 STA 298. He has drawn our attention to paragraphs 17 and 18 of the judgment in the said case wherein the Tribunal has noted as under: "The intention is to remedy a situation where a unit having the backing of an established trade mark or brand name lays ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n No. (vi) appended to Explanation to rule 3(66a) of the 1941 Rules has been improper and unfair and not justified by the facts and evidences in the case. The orders of the learned Assistant Commissioner and the learned Additional Commissioner should be quashed with the direction on them to issue eligibility certificate to the applicant as prayed for. 12.. In the above view of the matter, we do not think it necessary to express our views as to whether the existing industrial unit referred in condition No. (vi) of Explanation to rule 3(66a) of the 1941 Rules should be read as an existing industrial unit of West Bengal, or whether the applicant has suffered loss and damage as a result of the alleged delay in the disposal of his application for eligibility certificate. 13.. In the result, the application is allowed. The impugned orders dated July 31, 1991 and February 1, 1992, are quashed with the direction upon respondent No. 2 to grant the eligibility certificate to the applicant as prayed for within a period of four weeks from date. There shall be no order for costs. P.R. BALASUBRAMANIAN (Technical Member).-I agree. S.P. DAS GHOSH (Chairman).-I have perused the judgment pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the Merino Tuff-ply was phenol bonded and was boiling water-proof, termite proof and weather proof and was marketed by Merinoply company. In the rubber stamp in respect of the Penguin brand, the name of the applicant-company is mentioned. It is not mentioned in that rubber stamp regarding Penguin brand of B.W.R. plywood that the product was marketed by the Merinoply company or was manufactured by the Merinoply company. In the rubber stamp in respect of Pelican C.W.R. plywood at page 5 of the annexures to the affidavit-in-reply, it is shown that the product was manufactured by the applicant by mentioning the words "Mfd. by". At pages 6 and 7 of the annexures to the affidavit-in-reply the applicant has given out two other types of rubber stamps used by the applicant, without user of the word "Merino". One of these rubber stamps at page 6 of the annexure to the affidavit-in-reply relates to "Penguin B.W.R." with the name of the applicant at the bottom of that stamp. The remaining rubber stamp at page 7 of the annexures to the affidavit-in-reply is in respect of "Pelican C.W.R." with the name of the applicant at the bottom of the rubber stamp. The other annexures to the affidavi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as transpiring from the bill at page 1 of the annexures to the affidavit-in-reply, is, thus, actually a transfer of plywood manufactured by the applicant at Usti Road to itself in the name of the Merinoply company at Usti Road. The other bill in the name of M/s. D.K. Industries at page 2 of the annexures to the affidavit-in-reply shows that at least in respect of the plywood of the specification "comply A2 4mn" the rate per square metre is 17.25, which is also the rate for per square metre as mentioned in the bill showing sale of plywood to the Merinoply company. The rate per square metre in respect of other types of plywood supplied by the applicant to M/s. D.K. Industries cannot be compared with the other rates mentioned in the bill at page 1 of the annexures to the affidavit-in-reply as the specifications of the plywood are different. The inference is, thus, irresistible that by using the stickers of the Merinoply company or the rubber stamps, showing user of the name "Merino", the applicant was giving out that the plywood manufactured by it was of the same quality as that manufactured by the Merinoply company and that, as such, the price of plywood sold by the applicant would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e (7) of the Control Order did not include non-use and that the word "use" must take its colour from the context in which it was used. It is not understood as to how this case of Ramagya Sharma AIR 1966 SC 78 can have any relevance to the present case use includes limited use. 19.. Mr. A. Chakraborty, the learned Advocate for the applicant, also referred us to the case reported in AIR 1969 Cal 43 (Aktiebolaget Jonkoping Vulcan v. V.S.V. Palanichamy Nadar). That case has no relevance in the present case. According to Mr. A. Chakraborty, the learned Advocate for the applicant, that case has relevance in interpreting sub-clause (vi) of the Explanation to rule 3(66a)(i) of the Rules to the extent that that sub-clause applied to only West Bengal and not to any other place outside West Bengal. Mr. Chakraborty, learned Advocate for the applicant drew our attention, in this connection, to section 1(2) of the Bengal Finance (Sales Tax) Act, 1941 under which that Act of 1941 extends to the whole of West Bengal. The contention is that the Rules cannot override the provisions of the Act under which it is framed and that as the aforesaid Act of 1941 extends only to West Bengal, sub-clause (vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting industrial unit. It is not for the court to find out what for this provision was limited in its application only to West Bengal in the subsequent sub-clause (v) to Explanation II below rule 48G(6) of the Rules. When it was within the competence of the rule-making authority to include or not to include West Bengal, while describing a new industrial unit as regards its user of trade mark or brand name of any product of any other existing industrial unit, for the purpose of tax exemption, a case of casus omissus for non-mentioning of West Bengal in sub-clause (vi) of the Explanation to rule 3(66a)(i) of the Rules should not be inferred. It was because of section 1(2) of the Act of 1958 that it was decided by the Calcutta High Court in the case reported in AIR 1969 Cal 43 (Aktiebolaget Jonkoping Vulcan v. V.S.V. Palanichamy Nadar), while dealing with the meaning of the word "use" in section 46 of the Act of 1958, that a foreign use or use abroad or outside India of a trade mark could not be pleaded as a sufficient ground for retaining a registered trade mark on the Indian Trade Mark register. In the present case, there was no application by the applicant under section 12(3) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visional certificate was subsequently renewed and was valid till receipt of permanent registration certificate as S.S.I. unit on July 16, 1991. Mr. T.N. De, the learned State Representative, has submitted that after September 16, 1989, the applicant had no provisional certificate as S.S.I. unit and that after the applicant received permanent registration as S.S.I. unit on July 16, 1991 that the application for eligibility certificate was rejected on July 31, 1991. In the circumstances, after hearing the submissions of the parties, I am of the opinion that in the absence of materials on record to show that before receiving permanent registration certificate as S.S.I. unit on July 16, 1991 the applicant had valid provisional S.S.I. registration certificate, after renewal of the provisional certificate dated February 17, 1988, from time to time, it cannot be stated that the delay of about one year and three months in the disposal of the application for granting of eligibility certificate was unreasonable. 21.. As the matter stands, the application for granting eligibility certificate to the applicant has been rightly rejected by the respondent No. 2 and the revisional application ag ..... X X X X Extracts X X X X X X X X Extracts X X X X
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