9911796707
TMI Blog1992 (9) TMI 346X X X X Extracts X X X X X X X X Extracts X X X X ..... ity certificate under rule 3(66a) of the Bengal Sales Tax Rules, 1941, framed under the Bengal Finance (Sales Tax) Act, 1941, was filed on November 15, 1989. Thereafter the appropriate Assistant Commissioner of Commercial Taxes issued eligibility certificate on January 22, 1991 to the applicant for the period from May 25, 1989 to March 31, 1990. Then the applicant applied on February 19, 1991, for renewal of eligibility certificate for the period from April 1, 1990 to March 31, 1991. After giving an opportunity to the applicant of being heard regarding cancellation of the eligibility certificate, the Assistant Commissioner of Commercial Taxes by the impugned order dated July 12, 1991, declared the eligibility certificate as invalid with effect from May 25, 1989 and also rejected the application for renewal. The applicant s revision before the Additional Commissioner of Commercial Taxes was in vain, as will appear from the Additional Commissioner s order dated December 31, 1991. 3.. The case of the applicant is that jute bags and hessian bags which are manufactured by the applicant did not fall within the jute goods specified in Notification No. 1653 F.T. dated April 1, 1980, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ression, hessian and sacking includes jute bags and hessian bags and therefore, the products of the applicant, which are jute bags and hessian bags, are not entitled to the benefit of tax exemption under Rule 3(66a). 6.. Dr. D. Pal, learned senior advocate appearing for the applicant, has submitted that the meaning and import of the terms, hessian and sacking, are hessian fabric and jute fabric or cloth, from which various articles including jute bags and hessian bags can be manufactured. According to him, hessian and sacking do not include hessian bags or jute bags. He submitted that in commercial parlance hessian is understood as hessian cloth and fabric and quite distinct from hessian bags. Similarly he submitted that sacking is meant in the commercial parlance as jute fabric or cloth, but not jute bags or other articles which are manufactured therefrom. In this respect he relied on the Concise Oxford Dictionary, Eighth Edition, 1990. He drew our attention to the meaning of the word hessian which is given as a strong coarse sacking made of hemp or jute. In that dictionary sacking is stated to be the material for making sacks or the sack cloth. Dr. Pal also referred to the mean ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ute bags and hessian bags. 8.. Mr. T.N. De, the learned State Representative, submitted that the trade circular dated June 9, 1980, should be treated as a proper interpretation of the entries in the notification dated April 1, 1980, adopted in item 12, Tenth Schedule of rule 3(66a), as a contemporanea expositio which has remained in operation for all these years from 1980 onwards. According to him, if now a different interpretation is given by this Tribunal, a position which has remained settled so long will be unsettled, creating various problems. He submitted that many dealers who established S.S.I. units having claimed exemption under rule 3(66a), accepted the interpretation given in the trade circular dated June 9, 1980. 9.. Dr. Pal, appearing for the applicant, has resisted this contention by submitting that it is the proper domain of a court of law to give the correct interpretation of a provision in a statute or a statutory rule and no administrative circular can affect or override the same. He also contended that no court can be asked to follow an administrative circular only because it has been in operation for a certain period of time. 10.. After considering the riv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se might have departed from the strict tenor of the statutory provision and mitigate the rigor of the law. Such circulars should have a binding effect in the interpretation of the provision itself or the Tribunal and the High Court are supposed to interpret the law in the light of the circular. There is, however, support of certain judicial observations for the view that such circulars constitute external aids to construction. Mr. De wanted to avail of this observation and submitted that the trade circular can be used as an external aid to construction. He also relied on the case of K.P. Varghese [1981] 131 ITR 597 (SC) at page 612; AIR 1981 SC 1922 at page 1932. Relying on that decision Mr. De submitted that the rule of contemporanea expositio can be applied to the trade circular in question. In the case of K.P. Varghese [1981] 131 ITR 597 (SC); AIR 1981 SC 1922 the circular was by the Central Board of Direct Taxes which had some statutory power under section 119 of the Income-tax Act. Moreover, the question of contemporanea expositio does not apply to the present case, particularly, because the cause of action of the applicant arose only with effect from May 25, 1989, namely, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngly, order dated July 12, 1991, passed by the Assistant Commissioner and the order dated December 31, 1991, passed by the Additional Commissioner of Commercial Taxes are set aside. The eligibility certificate dated January 22, 1991, issued to the applicant for the period from May 25, 1989 to March 31, 1990, is restored and declared valid. The application for renewal of eligibility certificate for the period from April 1, 1990 to March 31, 1991, shall be disposed of in accordance with law. The respondent No. 4, Assistant Commissioner of Commercial Taxes, is directed to dispose of that application and any other application for renewal, if filed by the applicant, in accordance with law and in terms of this judgment. The applicant will be at liberty to apply for renewal of eligibility certificate, if so advised, from April 1, 1991, onwards within six weeks from today. Respondent No. 4, Assistant Commissioner of Commercial Taxes, is directed to dispose of the application for renewal for the period from April 1, 1990 to March 31, 1991, within three months from today and to dispose of further applications for renewal, if any, within three months from the date of filing thereof. Responden ..... X X X X Extracts X X X X X X X X Extracts X X X X
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