9911796707
TMI Blog1998 (8) TMI 590X X X X Extracts X X X X X X X X Extracts X X X X ..... a public limited company within the meaning of the Companies Act, 1956 and is a dealer registered under the Bengal Finance (Sales Tax) Act, 1941 as well as under the West Bengal Sales Tax Act, 1954. The assessment of the applicant for the period of four quarters ending June 30, 1981 was made by respondent No. 1, the Commercial Tax Officer, Central Section, raising a total additional demand for Rs. 3,00,587.17 which included levy of tax in respect of sales for which the requisite declaration forms could not be made available in spite of due diligence exercised by the applicant. A further sum of Rs. 2,31,858.06 representing sales effected from the applicant's canteen for catering to the needs of the applicant's employees was also brought to tax levied under the Act. 3.. An appeal under section 20(1) under the 1941 Act was preferred before the Assistant Commissioner, Commercial Taxes, Central Section (respondent No. 2) who by an order passed on July 11, 1986 modified the said assessment order to certain extent without, however, giving the requisite relief as prayed for. A revision petition was filed before the West Bengal Commercial Taxes Appellate and Revisional Board (in short, " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. The applicants, it is submitted, did not show any sufficient cause for not producing such requisite declaration forms at the time of assessment made by the respondent No. 1. The respondent No. 1 had no option but to disallow the claim for concessional rate of tax as claimed by the applicants. A turnover of Rs. 2,31,858.06 which represented canteen sales by the applicants was subjected to tax in accordance with the provisions of law. 7.. The applicants failed to establish, it is submitted, even before the Board in course of hearing of the revision application that they were prevented by sufficient cause from producing necessary declaration forms before the assessing authority at the time of assessment and hence ten declarations in form XXIVA, covering sales of Rs. 11,62,003.32, tendered for the first time by the applicants at the stage of revision, were not accepted. The declarations in form XXIVA which were sought to be produced at the stage of revision were not obtained before the disposal of the appeal. It is denied that the applicants were diligent in obtaining requisite declarations against their sales from the purchasing dealers, as they purportedly wrote letters to their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an employee of the applicant-company, to the effect that he had been working in the applicant-company for more than twenty years and regularly collecting sales tax declaration forms from the purchasing dealers and reminding them on personal representation for issue of outstanding declarations. It is admitted by the applicant that the forms in question were received by them on September 5, 1988 and January 2, 1989. The appellate order was passed on July 11, 1986. Therefore, admittedly up to the appeal stage the forms could not be produced by the applicant because they were not available. These forms were obtained and produced before the Board at the stage of revision. The Board discussed the matter at length in its judgment and observed that in order to show that the applicant was prevented by sufficient cause the applicant had filed some copies of letters written by the dealer in the years 1985 and 1988 seeking for some declaration forms. The Board also observed that there was nothing to show that these letters were ever replied to and there was also nothing to show that the applicant pursued the matter in any way. The Board has further observed that on close scrutiny they foun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pletely different where the dealer is negligent or callous or does not place materials to show that genuine effort was made to get the declaration forms. The question whether the declaration forms should be accepted or not would therefore depend on an assessment by the authorities about the bona fides of the dealer regarding the delay in production of the declaration forms. On a scrutiny of the order of the Board it is found that the Board held that the letters produced by the applicant were of doubtful nature and those documents had failed to inspire any confidence in the mind of the Members of the Board. On such a question of fact it would be perhaps unreasonable to hold that the Board was acting in a perverse manner unless there are specific reasons to hold so. In the instant case there is no circumstance which can suggest that the Board was coming to a conclusion which was totally bereft of reason. Even a casual look at the correspondence produced before us shows that a letter allegedly dated April 10, 1985 addressed to M/s. Well Pack (SK) Pvt. Ltd., produced before us cannot be a genuine letter because the letter which is dated April 10, 1985 is written on a letterhead which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imilar to section 2(1a) of the Bengal Finance (Sales Tax) Act, 1941 and hence in this case also there was no question of the dealer being taxed for the sales in the canteen. He also cited the case of Andhra Pradesh State Road Transport Corporation, Hyderabad v. Commercial Tax Officer, Hyderabad III [1971] 27 STC 42 (AP) where it was held that in order that an incidental or ancillary transaction or activity may amount to "business" within the meaning of clause (ii) of section 2(bbb) of the Andhra Pradesh General Sales Tax Act, 1957, it should be in connection with the trade or commerce or adventure carried on by the assessee and should itself partake of the nature of trade, commerce, manufacture, adventure or concern. In the instant case, Mr. Bose argued, canteen sales by the applicant-company was not of the nature of trade or commerce but were of the nature of a social service as would be evident from the fact that a cup of tea was supplied to the worker at a place of Rs. 0.05 per cup which means that it was really being supplied free of cost. Under the circumstances, he argued, there was no legal validity about the imposition of tax on canteen sales. 14.. Mr. K.K. Saha, submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a). 'business' includes- (i) any trade, commerce or manufacture or execution of works contract or any adventure or concern in the nature of trade, commerce or manufacture or execution of works contract, whether or not such trade, commerce, manufacture, execution of works contract, adventure or concern is carried on with the motive to make profit and whether or not any profit accrues from such trade, commerce, manufacture, execution of works contract, adventure or concern; and (ii) any transaction in connection with, or ancillary or incidental to, such trade, commerce, manufacture, execution of works contract, adventure or concern." 16.. A comparison of the definitions would show that they are virtually identical. Hence the decision of the Supreme Court in the case of State of Tamil Nadu v. Burmah Shell Oil Storage and Distributing Co. of India Ltd. [1973] 31 STC 426 should apply in the instant case. The chargeability to sales tax, under the Madras General Sales Tax Act, 1959 as amended by Acts of 1961 and 1964 on (along with other items) canteen sales was under consideration of the Supreme Court. The respondent oil companies under the Factories Act had to supply tea and edibl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing with the case of Deputy Commissioner of Commercial Taxes v. Sri Thirumagal Mills Limited [1967] 20 STC 287 (Mad.), the learned Judges said that they were unable to agree with that case as the Madras High Court had not paid sufficient attention to the word "such " occurring in the second part of the definition, which according to them obviously referred to the "trade, commerce, manufacture, adventure or concern" mentioned in the first part of the definition, that is to say, "trade, commerce, manufacture, adventure or concern" of which a motive to make gain or profit is not an essential requisite, nor was it permissible to hold that there was no "business" in the commercial sense of "business" with a motive to make profit, when such motive has been expressly declared unnecessary by the Legislature. In their view under both parts of the definition profit-motive is now immaterial and the concept of business in respect of matters falling under section 2(d)(ii) in the commercial sense put forward and accepted in the earlier cases must be abandoned. The Supreme Court observed in this connection "we think the view adopted by the Andhra Pradesh High Court is in consonance with our o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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