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TMI Blog1991 (9) TMI 341X X X X Extracts X X X X X X X X Extracts X X X X ..... everal grounds, there have meanwhile been two decisions disposing of most of the points. One decision is in the case of Century Spinning Mfg. Co. v. State of West Bengal reported in [1989] 73 STC 277. That was decided by a Division Bench of the Calcutta High Court. Later on this Tribunal had decided the case of Sawalka Kel Private Limited v. State of West Bengal reported in (1990) 23 STA 233 and also [1991] 82 STC 302. Mr. M.L. Bhattacharjee, learned advocate for the applicants referred to these decisions, but he did not abandon any of the grounds taken in the writ application. However, he made two new points for decision, which according to him, were not decided in those two cases. He has submitted also a short written argument making out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard for Industrial and Financial Re-construction (in short, B.I.F.R.) held the company to be sick under section 3(1)(o) of the said Act of 1985. In the affidavit-in-reply the point now specially argued was made out. The respondents have not filed any rejoinder to the affidavit-in-reply, but the learned State Representative contested the points at the time of hearing. 4.. Mr. Bhattacharjee for the applicants referred to the decision in S. Kodar v. State of Kerala [1974] 34 STC 73 (SC) and the case of Century Spinning Mfg. Co. [1989] 73 STC 277 (Cal) and contended that capacity to pay has now been accepted as a relevant factor and therefore in view of the order of B.I.F.R. showing that the applicant-company is now devoid of the capacity to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . We have been told by Mr. Bhattacharjee that the significance of this finding is that the company s accumulated losses exceed its net worth. That certainly indicates that the company has lost its capacity to pay not only this turnover tax but also many other levies. At a stage of the arguments Mr. Bhattacharjee had mentioned that the State of West Bengal was represented at the hearing before the B.I.F.R. and therefore the State was a party to the decision. The learned State Representative pointed out paragraph 13 of the said order of B.I.F.R. to show that the officer of the State of West Bengal who was present at the hearing simply stated that the State Government would favourably consider normal reliefs and concessions at the request of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out of the net of turnover tax because their turnover was less than the prescribed turnover for levy of turnover tax. The ground was that those having the prescribed turnover or above the same were able to pay turnover tax. Since the applicant-company and other companies of its like who have been declared sick by B.I.F.R. have no capacity to pay, they belong to a separate class. But we are unable to agree with this contention because the basis of classification made by the Legislature in the impugned provisions for turnover tax was the quantum of turnover, not the capacity to pay. The quantum of turnover was held by the courts to be reasonable on the rationality of the wisdom of the Legislature that higher turnover implies higher capacity t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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