1957 (3) TMI 50 - HC - VAT and Sales Tax

Issues Involved:
1. Violation of Natural Justice
2. Validity of Section 7(4) of the Bengal Finance (Sales Tax) Act, 1941
3. Application of Section 7(4) to the Facts of the Case
4. Candour and Full Disclosure in Writ Applications
5. Exhaustion of Alternative Remedies

Issue-wise Detailed Analysis:

1. Violation of Natural Justice:
The appellant argued that the Commercial Tax Officer amended the registration certificate without giving them an opportunity to be heard, violating the principles of natural justice. The court found this claim to be untrue, noting that the appellant received clear notices from both the Commercial Tax Officer and the Assistant Commissioner of Commercial Taxes but failed to appear on the notified dates. The court emphasized that the appellant's failure to attend the hearings and subsequent misrepresentation of the facts to the court constituted a lack of candour, which alone was sufficient to dismiss the application under Article 226.

2. Validity of Section 7(4) of the Bengal Finance (Sales Tax) Act, 1941:
The appellant contended that Section 7(4) was ultra vires, violating Articles 14 and 19 of the Constitution by conferring arbitrary powers on the Commissioner of Commercial Taxes. The court rejected this argument, clarifying that the power of amendment under Section 7(4) was not arbitrary but circumscribed by several safeguards and subject to revision by higher authorities. The court further held that the section did not impose any unreasonable restriction on the right to carry on trade or business, as the exemption from tax was merely a concession, not a fundamental right.

3. Application of Section 7(4) to the Facts of the Case:
The appellant argued that the amendment of the certificate was not based on information furnished under Section 16 or otherwise received, as required by Section 7(4). The court dismissed this argument, noting that the appellant failed to provide any evidence showing that the taxing authorities did not have the requisite information. The court also pointed out inaccuracies in the appellant's affidavits, which claimed without basis that the Commercial Tax Officer had no information.

4. Candour and Full Disclosure in Writ Applications:
The court highlighted the appellant's lack of candour in its application under Article 226, noting that it failed to disclose its non-appearance before the taxing authorities and the pending application before the Commissioner. The court stressed that writ applications require the utmost fullness and candour, and the appellant's failure to provide a truthful and complete account of the facts warranted dismissal of the application.

5. Exhaustion of Alternative Remedies:
The court emphasized that the appellant had chosen to avail itself of the statutory remedies provided by the Bengal Finance (Sales Tax) Act, 1941, and could not abandon those remedies midway to seek relief under Article 226. The court noted that the appellant's failure to disclose the pending application before the Commissioner further undermined its case. The court reiterated that Article 226 is not intended to substitute for all types of litigation and should be invoked only when no alternative remedy is available or when the alternative remedy is inadequate.

Conclusion:
The court dismissed the appeal with costs, certifying it for two counsel. The court underscored the importance of candour and full disclosure in writ applications and the necessity of exhausting alternative remedies before approaching the High Court under Article 226.

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