TMI Blog1959 (2) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... d, the taxable turnover that remained amounted to the sum of Rs. 218-9-0 upon which the tax payable was Rs. 9-12-6, the amount being deposited in the treasury. It will be necessary presently to examine the provisions of section 5(2)(a)(ii) somewhat closely, but for the time being, it will be sufficient to say that this provision of law gives exemption in respect of 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, etc., provided that in the case of such sales a declaration duly filled up and signed by the registered dealer to whom the goods are sold is furnished in the prescribed manner by the dealer who sells the goods. On 22nd April, 1955, notice in Form VI of the Act was issued by the respondent No. 1 fixing 4th August, 1955, as the date for hearing the petitioner's assessment case for the period ending 31st December, 1954. On 27th February, 1956, the petitioner company filed a return for the period ending 31st December, 1955. On 4th September, 1956, the Commercial Tax Officer, respondent No. 1, issued notice in Form VI fixing 21st January, 1957, for hearing of the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or further time to obtain the duplicate declaration forms. The matter was adjourned till 20th August, 1957. On 20th August, 1957, the authorised Advocate of the petitioner appeared and prayed for action under section 21-A of the said Act, which empowers the Commissioner or any person appointed to assist him, to enforce the attendance of any person and examine him or to compel production of documents etc. The assessment of the case including the consideration of the application was adjourned till August and then till September, 1957. On 27th August, 1957, the petitioner company made an application before the Commissioner of Commercial Taxes, praying that the Commissioner should declare that it was entitled to receive duplicate declaration forms from the dealers concerned, and for an order directing these dealers to furnish duplicate declaration forms. On 30th August, 1957, the Commissioner rejected this application, stating that he had no jurisdiction to compel the dealers to issue duplicate declaration forms. The petitioner company thereupon made an application for revision under section 20(3) of the said Act, to the Board of Revenue, West Bengal. On 10th December, 1957, the Boar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue, to 13, Syed Sally Lane, Calcutta. It is stated that when the notice in Form VI dated 4th September, 1956, in respect of the assessment of the period ending 31st December, 1955, was served upon the petitioner company fixing the hearing on 21st January, 1957, the petitioner, sometime in the second week of January, 1957, started sorting out and segregating its relevant books of account, papers and documents for the purpose of producing the same before the Commercial Tax Officer. In course of doing so, it is alleged that the petitioner company discovered that a certain file containing as many as 147 declaration forms received by the petitioner from various dealers registered under the Bengal Finance (Sales Tax) Act, 1941, in respect of goods purchased from the petitioner, was missing. In spite of thorough searches conducted by the petitioner to trace out the said file, the petitioner failed to discover the same and the circumstances indicated that the said file might have been mislaid somewhere and/or lost in course of the shifting of the petitioner's office as aforesaid. Thereafter, the petitioner wrote letters to the various registered purchasing dealers whose declaration forms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act and which transactions could be proved to the hilt from the books of account of the dealers themselves and/or their evidence and it could be proved that the dealers had actually issued the declaration forms which had unfortunately been lost. Briefly put, therefore, the petitioner's case is as follows: It is a registered dealer. It had transactions with other registered dealers. In respect of sales made to these other registered dealers, it would get exemption provided that in the case of such sales a declaration was furnished, duly filled up and signed by the registered dealer to whom the goods have been sold. This declaration had to be on a prescribed form obtainable from the prescribed authority. The petitioner company alleges that it sold the goods and the purchasers duly handed over declaration forms in respect of such sales. In its return which was filed, exemption was claimed under section 5(2) (a) (ii) of the Act. But when it came to the production of the declaration forms it was found that a considerable number of declaration forms which were in a file had been lost, presumably, while the company was moving its head office from one address to another. Since the origi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to pay sales tax for an enormous amount simply because of an accident whereby certain declaration forms have been lost. On the other hand, it is argued on behalf of the respondents that the merits of the case or the factum of the alleged transactions are not relevant at all. The jurisdiction of the Commercial Tax Officer to make an assessment or to allow an exemption flows from the terms of the statute. It is argued that under the relevant provisions of the Act and the, Rules, it is not open to the Commercial Tax Officer to grant an exemption, unless a declaration form is furnished in the manner laid down. If the declaration form cannot be produced for any reason whatsoever, the condition-precedent laid down in the statute is not fulfilled and, therefore, whatever the merits of the case and the hardship suffered by a party, the Commercial Tax Officer is helpless, and must disallow the exemption. Therefore, the point is in a small compass and it is necessary to look into the provisions of the Act and the Rules. The exemptions are contained in section 5 of the Act. The relevant part of section 5 (2) is set out below: "(2) In this Act the expression 'taxable turnover' means in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (9); (3) Every registered dealer shall maintain in a register in Form XXIII true account of every declaration form received from the Commercial Tax Officer, and, if any declaration form is lost or destroyed or stolen, he shall report the same to the appropriate Commercial Tax Officer immediately and shall make appropriate entries in the remarks column of the register in Form XXIII. (4) The register in Form XXIII shall be kept in the place of business of the dealer and shall at all reasonable times be open to inspection by the Commissioner or by such other authority as may be authorised by the Commissioner in this behalf. (5)....................................... (6) No registered dealer to whom a declaration form is issued by the Commercial Tax Officer shall transfer the same to another person except for the purpose of sub-rule (2). (7) A declaration form in respect of which a report has been received by a Commercial Tax Officer under sub-rule (3) shall not be valid for the purpose of sub-rule (2). (8) The Commissioner shall from time to time publish in the Calcutta Gazette the particulars of the declaration form in respect of which a report is received under sub-rule (3)." Declar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter amongst the parties, it could not be done because a matter of principle was involved. It will be observed that in the rules there is no provision for the issue of duplicate declaration forms, while there is provision for informing the authorities about the loss or destruction of declaration forms prior to their issue. It is prescribed that such forms would be rendered invalid and the factum of loss or destruction should be brought to the notice of the public. Beyond this, however, there is no specific provision for assisting the dealer who has received declaration forms from his purchasers and these have been lost or destroyed. In paragraph 14 of the petition, the petitioner has referred to a circular issued by the Commissioner of Commercial Taxes, West Bengal, and sent to the Bharat Chamber of Commerce, in or about July, 1955. In that circular, it is said that in case of a bonafide loss of a statutory declaration form, "in transit", it would be in order for the purchasing dealer to issue a duplicate declaration Form XXIV subject to three conditions. The first is that the new declaration form made in lieu of the ones lost in transit should be marked "duplicate issued in lie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uent. Cases had occurred where written up declaration forms had been chemically or otherwise treated for removal of the original writing and fraudulently used over again. If a dealer who alleged loss of declaration forms was allowed to have duplicates as a matter of right, evasion of tax would be widespread and rampant. In his opinion, it was the duty of every dealer, in his own interest as well as in public interest, to keep declaration forms carefully and in safe custody and if he lost the forms, he did so at his own risk and had to take the consequences. So far as this case is concerned, it is said that there exists ground for suspecting the bona fides of the petitioner company. The first ground alleged is one of delay. The office of the petitioner company was shifted from one address to another in June, 1955, and yet it was in May, 1957, that information was lodged by the petitioner company with the Officer-in-charge, Jorasanko Police Station, regarding the alleged loss, and it was in May, 1957, that information was received by the Commissioner about the loss. It is pointed out that even at that stage the report made to the Commercial Tax Authorities was not complete. Secondl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (3) ledger, cash book, journal and bank pass-book for the relevant purchases made by the said dealer. This application has admittedly not been disposed of when the assessment was made. It is however argued that under the Act or the Rules, the Commercial Tax Officer had no jurisdiction to accept secondary evidence of the declaration forms. What is required under the statute is actual production of the "prescribed" forms in the "prescribed" manner. If that is so, the application under section 21-A of the Act is of no effect, because the calling of witnesses and their books would lead to nothing. We, therefore, come to the real point in this case, namely, as to whether it is possible for the Commercial Tax Officer to grant exemption without production of the actual declaration forms and upon a consideration of secondary evidence, that is to say, evidence of the fact that such a declaration form had in fact been issued. So far as the proviso to section 5(2)(a)(ii) is concerned, there can be no doubt that exemption has been made conditional upon a declaration in the prescribed form being furnished in the prescribed manner. The manner prescribed is to be found in the Rules which lay do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n had been issued by a registered dealer in favour of the petitioner company, that would be wholly insufficient for the purposes of enabling him to grant exemption under section 5 (2) (a) (ii) of the Act. According to the proviso to that sub-section, the condition precedent for granting such exemption is that the dealer who sells the goods and asks for exemption must furnish in the prescribed manner a declaration form in Form XXIV duly filled up and signed by the registered dealer to whom the goods are sold and containing the prescribed particulars. In such a case the condition is that the declaration form should be produced. Exemption could not be be granted if the Commercial Tax Officer was satisfied that the transaction had taken place and a declaration form had been issued, but not produced because it was lost or destroyed. If I hold that exemption could be granted even in such a case, I would have to add to the wordings of this statute, and this I cannot do. Whether the pre-condition imposed for exemption is a hard one, causing a great deal of hardship to dealers who accidentally and without any fault on their part lose a declaration form, is a matter of policy and it is for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he provisions of section 5(2)(a)(ii) and the proviso contained therein constitute an unreasonable restriction on the fundamental right of the petitioner company to carry on its trade and business under Article 19(1)(g) of the Constitution. To start with, Article 19(1)(g) of the Constitution does not apply to the petitioner company, which is a Corporation. Article 19(1)(g) applies only to a citizen, and a Corporation cannot be a citizen. Then, again this particular ground has not been taken, although it is generally stated that the order complained of is tantamount to an interference with the petitioner's alleged fundamental right under Article 19(1)(g) of the Constitution. Taking all the facts and circumstances into consideration, I do not see why the restriction is an unreasonable one. In this particular kind of transaction, the ultimate liability for the payment of sales tax is that of the consumer-purchaser. For purposes of facilitating the collection of taxes, it is collected from the dealer who sells. Where, however, a sale is made to a registered dealer, then payment is exempted for the time being because facility is given for entering into a chain of transactions, it being i ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
