9911796707
TMI Blog1994 (6) TMI 214X X X X Extracts X X X X X X X X Extracts X X X X ..... MA". The ATF supplied by the applicant is not meant for consumption within CMA, nor it is in fact consumed within the said area. The applicant began supplying ATF to aircrafts for domestic flights from January, 1985 and for international flights from April, 1987. The ATF is generally brought to CMA by the applicant. But sometimes the applicant receives supplies from Indian Oil Corporation and Bharat Petroleum Corporation and thereafter supplies the ATF to the aircrafts. 3.. ATF is one of the specified goods under the Act and it is subject to entry tax. Rule 14(8) of the Taxes on Entry of Goods into Calcutta Metropolitan Area Rules, 1970, hereinafter referred as "the Rules ", empowers the State Government to grant exemption from tax leviable under the Act on such terms and conditions as may be specified in the order. On the representation of the oil industry in the State the State Government by an order dated December 6, 1970, granted exemption from entry tax on petroleum products brought into CMA and sold and despatched outside the said area. By an order dated March 26, 1973, the previous order dated December 6, 1970, was superseded, but the exemption granted under the previous o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 6.. The application was originally filed in Calcutta High Court on May 4, 1992, under article 226 of the Constitution. The applicant withdrew the said petition under article 226 and filed the application here on September 10, 1992, as in the meantime by a notification, being No. 2697 F.T. dated April 28, 1992, the Act was included in the Schedule to the West Bengal Taxation Tribunal Act, 1987 with effect from May 1, 1992 and the High Court ceased to have jurisdiction in the matter. 7.. The respondents' case, in short, as traversed in their affidavit-inopposition is that sale in CMA is one of the conditions for attracting levy of entry tax. For the purposes of levy of entry tax it is not open for consideration whether the buyer exports the same after sale in the Calcutta Metropolitan Area. In the case of petroleum products including ATF some relaxations were made by the Government under rule 14(8) of the Rules, but no exemption on sale of ATF to foreign going aircrafts is available under the order passed under rule 14(8) of the Rules. The applicant's revision petitions for the period from December, 1988 to February, 1989, have been rejected in revision case number being RV 521 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t cannot escape the levy of entry tax as the applicant as a dealer has been selling ATF to ultimate consumer within CMA. About the notification dated April 29, 1978, issued under rule 14(8) of the Rules he has contended that the said notification is beyond the competence of the Government as the Act does not provide for framing of any rule to grant exemption. Mr. Bhattacharjee, learned Advocate for the respondents, has also challenged the maintainability of the present application in view of the provisions of sub-section (2) of section 8 of the West Bengal Taxation Tribunal Act, 1987, which provides for a time-limit of 60 days for an application under sub-section (1) of section 8 of the said Act. We propose to take up the question of maintainability after examining the main contentions of the parties. 10.. There is no dispute that ATF is one of the specified goods being (a)(i) of serial No. 17 of the Schedule of the Act and it is subject to levy of entry tax under sub-section (1) of section 6 of the Act which runs as under: "6(1). Save as otherwise provided in this Chapter, there shall be levied and collected, for the purposes of this Act, a tax on the entry of every specifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Mr. Bhattacharjee, in his fairness, has contended that mere sale as such within CMA may not attract the levy of entry tax, but he hastened to contend that sale in the instant case being to the ultimate consumer within CMA and the supply having been made to the ultimate consumer, nothing remained to stand in the way of levy of the entry tax. Mr. Bhattacharjee tried to draw analogy with the sale of petrol to a motor car from a petrol pump within CMA and the motor car crossing the limits of CMA with petrol in its tank. Mr. Bhattacharjee has also tried to explain his contention by a few illustrations. He contended that a camel taking water and keeping it in store within its body and then crossing a desert cannot be said to cause export. He has also contended that a man purchasing a shirt in Calcutta and without wearing it but taking it to London cannot be said to have exported the shirt. Applicant's learned Advocate, Mr. Bajoria has contended that the very nature of the manner of use of ATF supplied to the aircrafts just prior to their departure from CMA makes the analogy and illustrations inapplicable in the instant case. Mr. Bajoria has strongly contended that there is always a st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n its body cavity. It is subject to the process of digestion and assimilation in its body from the moment of ingestion. Such a case cannot be treated even remotely analogous with the case of topping up of tanks in aircraft with ATE The consumption or use of ATF only during take-off or flight operation by an aircraft coupled with the fact that there ought to be enough stock of fuel in the aircraft for an emergency makes it clear that ATF supplied to the aircraft just prior to its departure is not meant for its immediate use and consumption. The fact that ATF supplied at the airport gets mixed with the existing stock in the tanks, and that one cannot say with certainty that at the time of take-off and initial flight only the previously existing stock was used, is of no consequence. The imaginary line of demarcation in the use and consumption of ATF supplied at the airport cannot be drawn contrary to the intent and purposes for which the supply is received at the airport. Mr. Bajoria, learned Advocate for the applicant, has contended, to our mind rightly, that it is a fit case where the facts speak for themselves. The speed at which an aircraft flies is likely to take the aircraft out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icit, provided the goods were not re-exported out of the area but were bought inside for use or consumption by buyers inside the area". Mr. R.N. Bajoria, learned Advocate for the applicant, has drawn our attention to TELCO's case reported in [1992] 86 STC 363; AIR 1992 SC 645 wherein the Supreme Court after referring to AIR 1963 SC 906 (Burmah-Shell Oil Storage and Distributing Co. of India Ltd. v. Belgaum Borough Municipality), Parekh Automobile's case reported in [1990] 1 SCC 367 and Hiralal's case reported in AIR 1976 SC 1446, has summed up the law regarding the nature and incidence of octroi. The Supreme Court has observed in para 29 (at page 389 of STC), "Having regard to the nature and incidence of octroi, unless the octroiable goods are consumed or used or are meant to reach an ultimate user or consumer in the octroi area, no octroi is leviable. The words 'sale therein' in the words 'consumption, use or sale therein' in the definition 'octroi' means sale of octroiable goods to a person for the purpose of consumption or use by such person in the octroi area. If sale was intended for consumption or use in the octroi area whether the purchaser actually consumed inside or outsid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or use in the area but for export. The decisions rendered by this Tribunal referred above are based on the Supreme Court decisions except JT [1993] 5 SC 369 (Hindustan Petroleum Corporation v. Okha Gram Panchayat) referred above. The law regarding the incidence of octroi or entry tax is no more in doubt. When octroiable goods are brought and sold for the purpose of consumption or use within the limits of the local area, those can be levied with octroi or entry tax. In the facts of the present case, the respondents claim entry tax only on the ground that sale and supply of ATF have taken place within CMA and that the respondents have no jurisdiction to enquire whether the ATF supplied to the aircrafts has been used or consumed within CMA. But the facts and circumstances on record clearly establish that the applicant supplies ATF to the aircrafts for both domestic and international flights for the purpose of its consumption beyond CMA. The fact that ATF has been supplied to the ultimate consumer, i.e., the aircraft, cannot be seen independent of the purpose for which it is supplied. The purpose of the supply of ATF is clearly for its consumption and use outside CMA. We are, therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1992 emphasises that in order to get exemption a dealer of petroleum products including ATF should arrange for sale and conveyance of their product outside CMA and that a sale initiated within CMA but conveyed out subsequently after such sale should not be considered for exemption. Similar stand has been taken by the respondents in paragraph 6 of their affidavit-in-opposition wherein they have stated that in the order dated April 29, 1978 there is no clause exempting entry tax on sale of petroleum products like ATF to the foreign going aircrafts and that in the instant case ATF is statedly sold to the foreign going aircrafts within the CMA and the aircrafts start using that product within CMA just like other aircrafts and as such there does not arise any question of exempting foreign going aircrafts from payment of entry tax. Mr. S. Bhattacharjee, learned Advocate for the respondents, has not lent support to the contention of the respondents either in the revisional orders referred above or to the objection taken in the affidavit-in-opposition. Mr. Bhattacharjee has contended that a notification like the one dated April 29, 1978 issued under rule 14(8) of the Rules is beyond the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd is exported or conveyed out of Calcutta Metropolitan Area by any of the companies mentioned in Schedule I to this order, without being consumed or used therein, supported by the 'Sales and Despatch outside Calcutta Metropolitan Area Certificate' referred to below and also the net operational loss after deducting the 'gain', if any, in the particular product from the loss on the same product and the transit loss to the extent detailed in the Schedule IV on the following terms and conditions, namely: Terms and conditions 1.. All vehicles or barges loaded with petroleum products for despatch to a destination outside the Calcutta Metropolitan Area shall be provided with despatch documents testifying to total volume, where tax is leviable on the basis of volume, and to weight and value, nature of commodity, and names and addresses of consignor and consignee for the purpose and it shall be the duty of the oil company, to which such petroleum products belong, to submit to the assessing officer of the check-post nearest to the place of entry, a monthly 'Sales and Despatch outside Calcutta Metropolitan Area Certificate' on the form set out in Schedule III to this order signed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocuments referred to in clause (4), assessment shall be made every month allowing exemption, as provided for this order." It may be seen from the body of the notification that it clearly refers to the contents of sub-rule (8) of rule 14 of the Rules and it makes liable every one of the oil companies mentioned in Schedule I to the notification to pay entry tax on entry of such petroleum products into CMA in respect of the stock imported by them and received from another importer and thereafter provides that each of the said petroleum product importer and company receiving petroleum products subsequently shall be allowed exemption of tax on such quantity of petroleum products as has been sold and is exported or conveyed out of CMA by any of the companies mentioned in Schedule I to the notification without being consumed or used therein. For obtaining exemption under the notification a support by a "Sales and Despatch outside Calcutta Metropolitan Area Certificate" appears to be necessary. From clause (5) of the terms and conditions it may be seen that assessment shall be made every month allowing exemption as provided for in the order. There is no doubt that the notification date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cidental to, the disposal of appeals under section 27; (b) anything which may or is required to be prescribed under this Act." The provisions of sub-section (3) of section 36 of the Act are not relevant for our purpose. It is not, therefore, quoted. In the context of the provisions of section 35 and sub-sections (1) and (2) of section 36 of the Act, we are of opinion that Mr. Bhattacharjee's challenge of the State Government's competence to frame rules for granting exemption is not well-founded. The State Government's notification dated April 29, 1978 does not, therefore, suffer from any lack of competence or jurisdiction. We have already noted that under the said notification petroleum products sold and exported or conveyed out of CMA without being consumed or used therein are allowed exemption subject to a support by the "Sales and Despatch outside Calcutta Metropolitan Area Certificate". The notification, in our view, only restates the law as to the incidence of the tax and provides for a mechanism to obtain a relief of exemption by the oil companies mentioned in Schedule I. 15.. The present application under section 8 of the West Bengal Taxation Tribunal Act, 1987, was file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst the assessment and levy, but his application for revision was rejected by an order dated March 6, 1990 and the applicant could obtain a copy on July 8, 1991. For the period from April, 1988 to August, 1988 the applicant had filed petitions for refund against assessment and collection, but the refund applications were rejected by an order dated April 18, 1990. The applicant could obtain a copy only on November 14, 1990. Appeal has been filed against the order of rejection of refund claim. The appeals and stay petitions from September, 1988 to November, 1988 and from March, 1989 to April, 1992 are pending and for the period from December, 1988 to February, 1989 the applicant's appeals against assessment were not registered on the ground of delay and so the applicant had filed revision petitions. Those revision petitions appear to have been rejected on March 10, 1992. There is no dispute that the applicant is not paying any entry tax from September, 1988. There is also no dispute that the applicant had filed a similar application under article 226 of the Constitution in Calcutta High Court on May 4, 1992. The applicant had to withdraw the writ petition to move the same before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and collection of entry tax in respect of ATF supplied to the aircrafts at Dum Dum since January, 1985. Each act of assessment, levy and collection undoubtedly provides for a cause of action. The applicant has a case of recurring cause of action. Apart from a recurring cause of action, the instant application appears to us as an application under article 226 of the Constitution. Sub-section (1) of section 8 of the West Bengal Taxation Tribunal Act, 1987, makes it abundantly clear that its provisions are subject to the other provisions of this Act. The jurisdiction, powers and authority exercisable by the High Court immediately before the specified date (May 1, 1992 in the instant case) are to be exercised by this Tribunal. The present application, indeed, appears to us as a unique illustration of the provisions of sub-section (1) of section 6 of the West Bengal Taxation Tribunal Act, 1987. Mr. Bajoria citing the decision in the Kerala Education Bill, 1957 reported in AIR 1958 SC 956 has contended that no enactment of a Legislature can take away or abridge the jurisdiction and power conferred on the High Court under article 226 of the Constitution. In view of the recurring nature o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erjee. I am unable to agree that the application will be allowed. 21.. The facts of the case have been stated in detail by my learned brother. The grievance of the applicant, M/s. Hindustan Petroleum Corporation Limited, relates to assessments of entry tax under the provisions of the West Bengal Entry of Goods into Calcutta Metropolitan Area Act, 1972 (hereinafter referred to as "the Act" for the sake of convenience) since January, 1985 on the ground that aviation turbine fuel ("ATF", in short) supplied by the applicant for both domestic and international flights is not exigible to entry tax as the ATF is meant for use and consumption outside the Calcutta Metropolitan Area. The assessments since January, 1985 and payments of entry tax on the basis of such assessments can broadly be divided into the following categories: (i) Assessments and payments of entry tax for the periods from January, 1985 to March, 1988. The applicant filed application for the revision of these assessments, which was rejected on March 6, 1990 in Revision Case No. 182 of 1989-90 on the grounds that the applicant sold petroleum products to the buyers who were ultimate consumers, that the sale took place wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plication). Liberty was also granted to the applicant to take back the original writ petition by placing a xerox copy of the same in the record of the High Court, Calcutta, by that order dated May 6, 1992. 23.. On September 10, 1992 an application under section 8 of the West Bengal Taxation Tribunal Act, 1987 (hereinafter called "the Tribunal Act" for the sake of brevity) was filed before this Tribunal, after this Tribunal was vested with jurisdiction to adjudicate or try disputes with respect to all matters of levy, assessments, collection and enforcement of entry tax under the Act with effect from May 1, 1992, Mr. S.N. Bose, the learned Advocate for the respondents objected to the admission of the application under the Tribunal Act on the ground of non-maintainability. An order was passed in the matter on November 16, 1992. The extract from that order of this Tribunal dated November 16, 1992 is recited below: "It appears that the application can broadly be divided into three periods. One of the periods relates to assessment for the period from January, 1985 to March, 1988 against which there is a final order in revision on March 6, 1990. The second period is from April, 1988 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o exercise its discretion in granting relief on entertaining an application under article 226, if there is unreasonable delay or triable issue as regards availability of such reliefs on merits. (See the case of State of Madhya Pradesh v. Bhailal Bhai [1964] 15 STC 450 (SC); AIR 1964 SC 1006). So far as assessments for the period from January, 1985 to March, 1988, are concerned, there is no explanation why the applicant took about ten months for filing of the writ petition in the High Court, Calcutta on May 4, 1992 after obtaining on July 8, 1991 copy of order dated March 6, 1990 in Revision Case No. 182 of 1989-90 relating to assessments for the periods from January, 1985 to March, 1988. There is also no explanation of delay of more than two months in filing of the application in this Tribunal on September 10, 1992, after expiry of sixty days from May 6, 1992 when the High Court, Calcutta, permitted withdrawal of the writ petition filed by the applicant. Copy of that writ petition filed in the High Court, Calcutta, is not an annexure to the applicant. There is no knowing if assessments since January, 1985 to March, 1988 were challenged in the writ petition. Assuming for the sake of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t adequate and shall cause undue hardship to the applicant; or (c)........................." 26.. The pendency of appeals in respect of assessments for the periods from (a) September, 1988 to November, 1988 and (b) March, 1989 to December, 1991 bars the admission of the application under section 8(3) of the Tribunal Act (see Titaghur Paper Mills Co. Ltd. v. State of Orissa [1983] 53 STC 315 (SC), Bhopal Sugar Industries Ltd. v. D.P. Dube, Sales Tax Officer, Bhopal [1963] 14 STC 410 (SC); AIR 1967 SC 549). 27.. It is not known if the assessments for the periods from December, 1988 to February, 1989, were challenged in the writ petition filed in the High Court. Assuming for the sake of argument that these assessments for these periods were challenged in the writ petition, the fact remains that there is no explanation of delay of more than two months in filing the application before this Tribunal on September 10, 1992, after expiry of sixty days from May 6, 1992 when the High Court permitted withdrawal of the writ petition. 28.. I am, accordingly, of the opinion that the application under section 8 of the Tribunal Act in respect of assessments from January, 1985 to December, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts at least for the purpose of use. Keeping in view these decisions of the Supreme Court, the exigibility of aviation turbine fuel to entry tax is to be decided. This question cannot be decided on the supposition that all aircrafts landing at Calcutta have enough reserve fuel and that no part of the ATF supplied to the aircraft at Calcutta is consumed within CMA, though copies of one certificate dated February 12, 1993 from the Indian Airlines and another certificate dated December 31, 1991 from the Indian Airlines have been filed along with the affidavit-in-reply for the purpose of showing that the fuel delivered by the applicant at the A/C fuel tanks at Calcutta was not consumed at Calcutta as aircraft landing in Calcutta had enough reserve fuel for any exigency. The limits of CMA do not mean limits of Dum Dum Airport. Under section 2(a) of the Act, Calcutta Metropolitan Area means the areas within the Calcutta Metropolitan District. Under section 2(b) of the Act, the Calcutta Metropolitan District means the area described as such in the Schedule to the Calcutta Metropolitan Planning Area (Use and Development of Land) Control Act, 1965, and includes such other area, contiguous to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndustan Sugar Mills v. State of Rajasthan [1980] 45 STC 194 (SC); AIR 1981 SC 1681. It is not necessary to discuss these cases as the question of refund is inextricably mixed up with the question of assessments. Unless the order of assessment is set aside, there is no question of any refund of tax. Moreover, under the first proviso to section 19 of the Act, where any part of specified goods is consumed, used or sold in the CMA, the refund shall be made in respect of that part of such goods as have not been consumed or used or sold therein. In case it is found on calculation in the manner stated above that some portion of ATF supplied to aircrafts was consumed or used within the CMA, the refund shall be made in respect of that part of the ATF which had not been consumed or used within CMA. 31.. I agree with the view expressed by my learned brother that the State Government's Notification No. 2246-F.T. dated April 29, 1978 does not suffer from any lack of competence or jurisdiction. It provides the mechanism for obtaining relief or exemption by the oil companies mentioned in Schedule I of the notification. As the notification has been issued in accordance with the rulemaking power ..... X X X X Extracts X X X X X X X X Extracts X X X X
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