1991 (2) TMI 360 - AT - VAT and Sales Tax

Summary

Issues:
1. Challenge to a notice under the Bengal Finance (Sales Tax) Act, 1941.
2. Interpretation of item No. 7 of Schedule I of the Act regarding exemption from tax on cooked foods.
3. Legality of the notice dated September 3, 1981.

Analysis:
1. The case involved a challenge to a notice issued under sections 11 and 14(1) of the Bengal Finance (Sales Tax) Act, 1941. The applicants, partners in a business, contested the notice requiring the production of books of account for assessment purposes. They argued that the articles sold by them, considered as cooked food, should be exempt from tax under section 6(1) of the Act.

2. The main contention was regarding the interpretation of item No. 7 of Schedule I of the Act, specifically whether the expression "other than cakes, pastries, biscuits and sweetmeats" in the first column of item No. 7 was ultra vires section 6(1) of the Act. The applicants argued that this expression should have been mentioned as an exception in the second column, not the first, to exclude those items from the definition of cooked food.

3. The Tribunal analyzed the historical evolution of item No. 7, highlighting that amendments over the years had specified cooked foods other than cakes, pastries, and sweetmeats as exempt from tax. The inclusion of biscuits in the exempted items was introduced later through an amendment. The Tribunal concluded that the legislative intent was clear in specifying the exempted goods and that the expression in the first column of item No. 7 was descriptive, not a condition or exception. Therefore, the notice challenging the tax assessment was not set aside.

4. Ultimately, the Tribunal dismissed the application, allowing the authorities to proceed with the assessment based on the notice dated September 3, 1981. The applicants were given the opportunity to be heard before any action was taken. The Tribunal also granted a stay of operation of the order for a period of eight weeks upon the request of the applicants.

5. The judgment made no order as to costs, and the application was officially dismissed, upholding the legality of the notice and the tax assessment process in this case.