1991 (4) TMI 395 - AT - VAT and Sales Tax

Issues Involved:
1. Whether the Deputy Assistant Director-General (MS) of the Central Government Medical Stores Depot in Calcutta is a "dealer" under section 2(b) of the West Bengal Sales Tax Act, 1954.
2. Whether sales made by the Depot are exigible to sales tax under the West Bengal Sales Tax Act, 1954.
3. Jurisdiction of the Tribunal under Article 131 of the Constitution.
4. Validity of assessments and demand notices.
5. Applicability of interest under section 8A of the 1954 Act.
6. Applicability of Article 285(1) of the Constitution regarding immunity from sales tax.
7. Entitlement to exemption and/or concession under section 4AA of the 1954 Act.
8. Refund of taxes paid and quashing of certificate proceedings.

Detailed Analysis:

1. Whether the Depot is a "Dealer":
The core issue was whether the Depot qualifies as a "dealer" under section 2(b) of the West Bengal Sales Tax Act, 1954. The Tribunal held that the Depot is indeed a "dealer" as it sells medicines and hospital appliances brought from outside West Bengal for the purpose of sale within the state. The definition of "dealer" under section 2(b) includes any person who sells notified commodities brought into West Bengal from outside for sale. The Tribunal rejected the argument that the Depot operates on a no profit no loss basis, noting that the profit motive is irrelevant to the definition of "dealer" under the 1954 Act.

2. Exigibility to Sales Tax:
The Tribunal concluded that the sales made by the Depot are exigible to sales tax under the 1954 Act. The sales of medicines and hospital appliances brought from outside West Bengal for sale within the state fit within the statutory definition of taxable sales. The Tribunal also rejected the argument that the Depot's activities are purely humanitarian and non-commercial, emphasizing that the statutory definition does not require a profit motive.

3. Jurisdiction under Article 131:
The Tribunal addressed the preliminary objection regarding jurisdiction under Article 131 of the Constitution. It was argued that the dispute falls within the exclusive jurisdiction of the Supreme Court. The Tribunal rejected this argument, stating that the dispute does not arise in the context of the Constitution or federalism but pertains to the recovery of assessed dues and interest. The Tribunal relied on precedents to assert its jurisdiction and dismissed the contention that the applications were not maintainable.

4. Validity of Assessments and Demand Notices:
The Tribunal examined the validity of the assessments and demand notices, noting that the applicant had been assessed for various years and had paid taxes under protest. The Tribunal found no merit in the argument that the registration certificate was a nullity or that the assessments were made ex parte without proper notice. It was held that the assessments and demand notices were valid and enforceable.

5. Applicability of Interest under Section 8A:
The Tribunal addressed the contention that the interest charged under section 8A of the 1954 Act was ultra vires the Interest Act, 1978, and Article 254 of the Constitution. The Tribunal held that the provisions of the Interest Act, 1978, do not apply to proceedings before taxing authorities and that section 8A of the 1954 Act is a special provision intended to compel timely payment of tax. It was concluded that there was no repugnancy between the Interest Act and section 8A, and the interest charged was valid.

6. Applicability of Article 285(1):
The Tribunal examined whether the sales made by the Depot are immune from state sales tax under Article 285(1) of the Constitution. It was held that Article 285(1) does not provide immunity from sales tax, as sales tax is an indirect tax levied on the sale of goods, not a direct tax on property. The Tribunal relied on precedents to conclude that the sales made by the Depot are subject to state sales tax.

7. Exemption and/or Concession under Section 4AA:
The Tribunal declined to entertain the argument regarding exemption and/or concession under section 4AA of the 1954 Act, as it was raised for the first time during the reply and had not been agitated before the assessing officer. The Tribunal noted that this issue involves ascertainment of facts and fulfillment of certain conditions, which could not be decided at this stage.

8. Refund and Quashing of Certificate Proceedings:
The Tribunal dismissed the applicant's request for a refund of taxes paid and quashing of certificate proceedings, as it had already held that the applicant is a "dealer" and the sales are exigible to sales tax. The Tribunal directed that if the applicant applies for certified copies of assessment orders and/or demand notices, the respondents should issue the same within three weeks, subject to compliance with relevant rules. The applicant was also advised to pursue statutory remedies, including appeals, subject to the law of limitation and other statutory provisions.

Conclusion:
The applications were dismissed with directions to the respondents to provide certified copies of assessment orders and/or demand notices if applied for by the applicant. The Tribunal upheld the validity of the assessments, demand notices, and interest charged under section 8A, and concluded that the sales made by the Depot are subject to state sales tax. The Tribunal also clarified that the dispute does not fall under the exclusive jurisdiction of the Supreme Court under Article 131.

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