1995 (3) TMI 436 - AT - VAT and Sales Tax

Summary

Issues:
- Interpretation of the term "processing" under the West Bengal Sales Tax Act, 1954
- Tax liability on sales of television sets under the brand name "Videocon"
- Imposition of penalty for non-payment of tax
- Correct rate of tax applicable
- Relief under section 4(1a) of the 1954 Act

Interpretation of "Processing":
The case involved a dispute regarding whether affixing stickers of the brand name "Videocon" on television sets constituted "processing" under the West Bengal Sales Tax Act, 1954. The Assistant Commissioner upheld the assessment orders, relying on the definition of "processing" in section 2(b) of the Act and a previous Supreme Court decision in the case of Chowgule & Co. The applicant argued that merely affixing stickers did not amount to processing, citing other Supreme Court decisions. The Tribunal analyzed the term "processing" and concluded that for an operation to be considered processing, it must bring about a change in the commodity. In this case, affixing stickers did not result in a substantial change in the television sets, thus not constituting processing under the Act.

Tax Liability and Penalty Imposition:
The Commercial Tax Officer had imposed a penalty on the applicant for non-payment of tax on sales of television sets under the brand name "Videocon." The Assistant Commissioner upheld this decision along with the assessment orders. However, since the Tribunal found that there was no processing involved in the sales, it held that the tax liability on the second sales of the same commodities was not valid. Consequently, the question of imposing a penalty did not arise, and the Tribunal set aside the appellate order and directed the modification of the assessment orders.

Correct Rate of Tax and Relief under Section 4(1a):
The correct rate of tax applicable and the relief under section 4(1a) of the 1954 Act were also contested issues in the case. However, the Tribunal did not find it necessary to determine these aspects due to the primary issue of whether affixing stickers constituted processing. As a result of the finding that there was no processing involved, the Tribunal allowed the application, set aside the appellate order, and directed the modification of the assessment orders by the Commercial Tax Officer within a specified timeframe.

Conclusion:
The Tribunal allowed the application, emphasizing that affixing stickers did not amount to processing under the West Bengal Sales Tax Act, 1954. Consequently, the tax liability on the sales of television sets under the brand name "Videocon" was deemed invalid, and the penalty imposition was not upheld. The Tribunal directed the modification of the assessment orders within a specified period and disposed of the main application without costs.