TMI Blog1974 (11) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... ion was removed, the application of the 1941 Act to cigarettes revived proprio vigore. In any case, definite indications of such revival are available in the language and scheme of the 1958 Act and the Bengal Act 13 of 1959. - C.A. No. 1183 of 1970, - - - Dated:- 6-11-1974 - KHANNA H.R., SARKARIA R.S. AND GUPTA A.C. JJ. A.K. Sen, M.C. Bhandare and Dr. D Pal Senior Advocates, (P. Mridul and D.N. Gupta, Advocates, with them), for the appellant. B. Sen and P.K. Chatterjee, Senior Advocate (R.S. Rathore, O.P. Khaitan, B.P. Maheshwari and Mrs. Laila Seth, Advocates, with them), for the respondents. -------------------------------------------------- The judgment of the court was delivered by SARKARIA, J.- Whether the sale of cigarettes after the enactment of the West Bengal Sales Tax (Amendment) Act, 1958 (for short, the 1958 Act), is governed by the Bengal Finance (Sales Tax) Act, 1941 (for short, the 1941 Act), and, as such, a dealer in the State of West Bengal is entitled to the benefits under section 5(2)(a)(ii) of the 1941 Act in making purchases free of sales tax of raw material and other goods required for use in the manufacture of cigarettes on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the recommendation of the Finance Commission, Parliament enacted the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (Central Act 58 of 1957). This Act came into force on December 24, 1957. It declared the aforesaid three classes of goods "to be of special importance in inter-State trade or commerce". Further, the proviso to para 1(b)(iii) of the Second Schedule appended to the said Act, gave effect to the recommendation of the Finance Commission with regard to the distribution of additional duties among the States. Manufactured tobacco is mentioned under item 9(ii) of the First Schedule of the 1957 Act. It further indicates that cigarettes, cigars, cheroots and bidis all fall under the description of "manufactured tobacco". They have been subjected to this additional duty of excise at different rates. Part I of the Second Schedule relates to distribution of these additional duties. In view of the Central Act 58 of 1957, the State Legislature passed the 1958 Act. It received the assent of the President and was thereafter published in the Calcutta Government Gazette on March 30, 1958. It amended the 1954 Act. The 1958 Act substituted for the words "ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r under the 1941 Act. As a consequence the Additional Commissioner and Commercial Tax Officer, Bhavanipore, wrote letters dated September 8, 1958, and September 22, 1958, respectively. The substance of these letters was that from December 24, 1957, a dealer or a manufacturer in cigarettes was not liable to pay any sales tax under the 1941 Act or under the 1954 Act and was not entitled to benefits of registration certificate under either of the said Acts and that, in the circumstances, it was proposed to delete the amendment which was made in the registration certificate of the company under the 1941 Act on July 1, 1958, by inclusion of cigarettes and smoking mixtures in the manufacturers' column of such certificate. The company wrote back on October 31, 1958, contending that the 1941 Act was applicable to cigarettes and, as such, it was entitled to the benefit of section 5(2)(a)(ii) of the 1941 Act and the sales tax authorities were not competent to amend the registration certificate issued under the 1941 Act. These contentions were rejected by the Commercial Tax Officer, who by his letter of February 2, 1959, asked the company again to send its registration certificate for amendme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to cigarettes and smoking mixtures as made on July 1, 1958. Against the judgment of the learned single Judge, the revenue carried an appeal to a Division Bench of the High Court which accepted the appeal and dismissed the writ petition. The ratio of the two separate but concurrent judgments of the appellate Bench of the High Court is that the 1954 Act had the effect of completely repealing the 1941 Act in relation to cigarettes and the repeal of the 1954 Act in relation to cigarettes by the 1958 Act did not revive the operation of the 1941 Act in regard to cigarettes on the principle "that the repeal of a repealing Act does not revive the repealed Act". Since the 1941 Act stood completely obliterated from the statute book in relation to cigarettes, no sales tax would be payable in regard thereto either under the 1954 Act or under the 1941 Act. Upon these premises it was held that the company as a dealer in cigarettes and smoking mixtures is not entitled to any certificate of registration under the Act of 1941 as it is neither a dealer within the meaning of that Act, nor liable to pay sales tax under that Act. The general rule of construction is that the repeal of a repealing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ates that its purpose is to impose a general tax on the sale of goods in Bengal. "Goods" are defined in clause (d) of section 2 as "all kinds of movable property other than actionable claims, stocks, shares or securities, and includes all materials and commodities". "Dealer" means "any person who carries on the business of selling goods in West Bengal and includes the Government" [section 2(c)]. The charging provision is in section 4, according to which, every dealer whose gross turnover during the preceding year exceeds the taxable quantum shall be liable to pay tax under this Act on all sales effected by him after the notified date. Sub-section (5) of section 4 defines "taxable quantum" to mean "in relation to any dealer who imports for sale any goods into West Bengal, or manufactures or produces any goods for sale, 10,000 rupees" and "in relation to any other dealer, 50,000 rupees". Section 5 of the 1941 Act prescribes the rate of tax. Its original sub- section (2)(a)(ii) reads as under: "(ii) sales to a registered dealer- of goods of the class or classes specified in the certificate of registration of such dealer, as being intended for resale by him, or for use by him in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the above proviso does not save the operation of section 5 of the 1941 Act, but only makes that provision a part of the 1941 Act. In our opinion, the issues that arise in this case cannot be correctly and completely answered by construing section 23 of the 1954 Act in this manner. We would, therefore, defer the final answers to the questions posed till the conjoint survey of the 1954 Act, 1958 Act and other relevant enactments is complete. Suffice it to say, now, on an analysis of section 23 of the 1954 Act that it excepts everything relating to cigarettes from the operation of the 1941 Act, save to the extent indicated in the proviso. We are not persuaded that clause (ii) of the proviso does not save anything in section 5 of the 1941 Act. The words "in calculating the taxable turnover under section 5 of the said Act" in this clause are a clincher. They show beyond all manner of doubt that the calculation of the taxable turnover from which the deduction of the price of goods sold to a dealer for use in manufacturing cigarettes is to be made, has still to be done under section 5 of the 1941 Act. Assuming that clause (ii) of the proviso incorporates, by reference, section 5 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " An analysis of this section 25 would show that the 1954 Act (as amended by the 1958 Act) can be made applicable by a notification under this section, only to a commodity "which is liable to taxation under the Bengal Finance (Sale Tax) Act, 1941", and further that the 1941 Act "shall cease to apply to such commodity" and the 1954 Act shall apply to such commodity only from the date of such notification. It is not disputed that cigarettes can be notified as a taxable commodity under the amended section 25 of the 1954 Act. It necessarily implies that the 1941 Act would cease to apply to cigarettes, only when the requisite notification in respect thereof under section 25 of the 1954 Act is issued. There can be little doubt that if such a notification were to be issued and later on rescinded, such recession would revive the application of the 1941 Act. The position would be the same if, as in the present case, no notification under section 25 specifying cigarettes as a taxable commodity was at all issued. It may further be noted that the 1941 Act was amended by the Bengal Act 13 of 1959, which was published in the Government Gazette on October 28, 1959. It inter alia amended sec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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