TMI Blog1987 (8) TMI 412X X X X Extracts X X X X X X X X Extracts X X X X ..... id Rules. The Assistant Commissioner, Commercial Taxes, Jalpaiguri, the respondent No. 2, after examining all the relevant records and documents and after being fully satisfied that the petitioner was engaged in the business of manufacturing goods, allowed the petitioner to avail exemption under rule 3(66) for the period from 1st April, 1980 to 31st March, 1981. Such exemption was also granted by renewing "eligibility certificate" for a further period of 1 year from 1st April, 1981 to 31st March, 1982. It may be mentioned that "eligibility certificate" was initially granted on 11th May, 1981 for the period from 1st April, 1980 to 31st March, 1981 and it was renewed thereafter on 1st December, 1983 for the subsequent period, that is to say, from 1st April, 1981 to 31st March, 1982. On 12th December, 1983 the petitioner made an application for renewal of the "eligibility certificate" for the period from 1st April, 1982 to 31st March, 1983. On 15th February, 1985 a notice was issued from the office of the Assistant Commissioner, Commercial Taxes, communicating the rejection of the application for renewal of "eligibility certificate" for the period from 1st April, 1982 to 31st March, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er which came before S.C. Sen, J. It has been stated by Mr. Bose, learned Advocate for the State, that the State would rely on the said affidavit as the facts and circumstances of the case are similar. He has also submitted that this application is liable to be dismissed inasmuch as the petitioner once invoked the jurisdiction of this appellate side and failing there, he has moved in the original side on the self-same allegations. He has also submitted that the stand taken by the department has been fully explained in the said affidavit which may be treated as part of the proceeding. Mr. Bajoria, learned counsel appearing for the petitioner, has submitted that in the case before Mr. justice Sen the grievance of the petitioner is, against rejection of the applications for renewal of the eligibility certificate forms. He has also submitted that there is no question of any conflict of decision as points are not similar. I shall revert to the contention raised by the learned Advocate for the parties later. Before that it is necessary to set out the stand which has been taken by the respondents in the affidavit affirmed in C.R ............... of 1985 by Raghuranjan Gosal, Assistant Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forms as may be required by him. The contention of the respondents is that if taxes are outstanding the respondents are not obliged to issue declaration forms. As soon as the application for renewal of the eligibility certificate was rejected, the petitioner is bound to pay the dues on the basis that no exemption is granted to the assessee. It has also been contended that investigation is being made as to the activities of the petitioner and unless the petitioner makes payment of the dues no declaration form can be issued to the petitioner. It has also been urged that in terms of the order of S.C. Sen, J., a declaration form commensurate with the taxes paid had already been issued and no further declaration forms can be issued. On the other hand Mr. Bajoria, learned counsel for the petitioner, has submitted that in this case renewal of eligibility certificate has been refused and the matter is pending before the revisional authority. So long as the revisional authority does not decide the issue one way or other, the petitioner is entitled to the declaration forms on the basis of its existing status. He has also submitted that taxes are being paid on the basis of the returns sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pears that the dealer has not paid any tax for any quarter after his renewal petition is rejected. But he should have paid tax when the application for E.C. was rejected. The dealer is still claiming the sale covered under rule 3(66). It seems to me the returns submitted are not complete. So the petition for issuing of declaration forms is rejected." Rule 27AA(2)(c) of the Bengal Sales Tax Rules, 1941 provides as follows: "If the applicant for declaration forms has at the time of making the application defaulted in furnishing any return or returns, together with the receipted challan or challans showing payment of the tax, surcharge and additional surcharge due from him according to such return or returns, for the furnishing of which the prescribed date or dates, or the extended date or dates, if any, have already expired, the Commercial Tax Officer shall withhold the issue of declaration forms to him until such time as he furnishes (i) such return or returns, together with such receipted challan or challans, and (ii) any other return or returns, together with the receipted challan or challans showing payment of the tax, surcharge and additional surcharge due according t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Plastic Private Ltd. v. Commercial Tax Officer, China Bazar Charge reported in (1987) 20 STA 132 (Cal) has observed as follows: "In my judgment, in a case where the petitioner was originally granted an eligibility certificate, he would continue to enjoy the benefit of such certificate so long as his application for renewal remains undisposed of, the reason being that the petitioner having made a valid application in good time for renewal, cannot be refused the benefit of renewal in a case where the Assistant Commissioner has been guilty of delay in disposing of the application. Any delay on the part of the Assistant Commissioner to dispose of the application must enure to the benefit of the petitioner." Mr. Justice Sen in the said judgment considered the meaning of the word "due" appearing in rule 27AA(2)(c) and observed thus: "After rejection of his prayer for grant of eligibility certificate, the petitioner cannot claim that the tax due on his return must be calculated on the basis of the return filed by him on the footing that he had got in his possession a valid certificate of eligibility in form XXXVI. This construction, in my judgment, cannot be reasonably made. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e a different view under any circumstances. In this connection reference was made to the judgment of this Court in the case of Rasoi Products v. Commercial Tax Officer, Shyambazar reported in [1982] 51 STC 248. In that case the learned judge did not accept the earlier judgment on the ground that relevant notification as also the provisions and rules of the West Bengal Sales Tax Act, 1954 had not been placed before the learned Judge delivering the judgment earlier. Reliance has also been placed in the case of Bharat Process Mechanical Engineers Ltd. Assistant Apprentices v. Bharat Process and Mechanical Engineers reported in 1987 (1) CLJ 157. The decision of the Division Bench of this Court in the case of Ram Ishwar Bhan v. Commercial Tax Officer reported in (1987) 20 STA 205 has taken a view contrary to what Mr. Justice Sen held in Burlap Laminating (1987) 20 STA 132 (Cal). There the Division Bench held as follows: "On a consideration of the facts as on record, the statutory provisions as noted above and the submissions of the learned Advocate for the parties, it appears to us that the contentions raised on behalf of the appellant are of substance and cannot be brushed asid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear 1964-65, the Incometax Officer passed an order for payment of advance tax under section 210 for the year 1965-66. Thus the Supreme Court held as follows: "If it be assumed that provisional assessment has to be made in accordance with and subject to the provisions of the Act, distinction between a provisional assessment and a regular assessment gets completely blurred. The scheme of section 141 is to call upon the assessee to pay tax provisionally at the appropriate rate on what he admits is his taxable income, subject to the benefit of the allowances under sub-section (2). The section does not permit an enquiry to be made whether the total income returned by the assessee exceeds the amount admitted by him, nor whether the allowances or deductions claimed are admissible. If there be a discrepancy between the return made and the accounts and documents accompanying the return, the Income-tax Officer may ask the assessee to explain the discrepancy, but he must make a provisional assessment on the basis of the return initially made or clarified and the accounts and documents filed. He cannot make a provisional assessment by holding that certain claims made by the assessee are in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion against the rejection order was pending before the higher authority. The petitioner can proceed on the basis of the return already filed regarding his dues until the matter is finally disposed of by the appropriate authority. The rejection of an application for renewal of the eligibility certificate imposes burden on the dealer but in this case as I said it was not until 18th February, 1985 that the order rejecting the application for renewal of eligibility certificate was communicated. The petitioner could not foresee at least till 18th February, 1985 what however happened to his application for renewal of eligibility certificate. Thereafter he took recourse to the remedy provided under the Act. In such a case it is the duty of the concerned authority to dispose of the application and the appeal or revision preferred against any decision on such application as expeditiously as possible so that the dealer may know exactly the position and the revenue can also collect the tax as may be found due. At the time of issuing of the declaration form the sales tax authority can only consider whether the dealer has defaulted in furnishing the return. The correctness of the return can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estriction on the right to carry on the trade or business and, therefore, rule 31-C(b) did not violate article 19(1)(g) of the Constitution. It was also held that by filing of the nil return, the requirement of rule 31-C(b) was fulfilled and the officer was not entitled to reject the return as being incorrect. No investigation or enquiry in respect of the return filed by the petitioner was envisaged or authorised at the stage of the application for issue of forms and, therefore, that part of the order of the officer holding that until the petitioner paid the purchase tax his application for issue of forms could not be allowed, should be set aside. The principle of that case will equally apply to the facts of the instant case. There is one other aspect of the matter. Application for renewal of eligibility certificate is to be considered afresh every year. Merely because one particular year the application was rejected that would not be a ground for rejecting the certificate for the subsequent years. In the case of Dwarkesh Engineering Works v. Assistant Commissioner, Commercial Taxes, Calcutta (South) Circle reported in [1987] 65 STC 37 (Cal); (1986) 19 STA 290 (Cal), it has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rule. There is another aspect of the matter in the affidavit filed before Mr. Justice S.C. Sen which has been reproduced earlier. It has been stated that the entire sales of Rs. 32,50,000 would be taxable at 8 per cent unless the petitioner has secured declaration forms in support thereof in the meantime. In the event the said sales are not supported by declaration, the tax that would be due and payable by the petitioner would amount to Rs. 2,60,000 approximately which the petitioner should pay in order to obtain declaration form. In my view this is not correct approach at all. Pursuant to the direction of this Court the petitioner paid a sum of Rs. 32,500 and the sales tax authorities issued declaration forms covering the purchases to the extent of Rs. 15 lakhs. The said declaration forms covered the purchases made up to the period 1982-83. The said declaration forms were issued on the basis that the petitioner was liable to pay sales tax at 2 per cent. The petitioner being a registered dealer is liable to pay tax at 1 per cent against his sales. The sales are to the registered dealers. It is not the case that the sales are made by the petitioner to the unregistered dealers. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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