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TMI Blog1976 (1) TMI 154X X X X Extracts X X X X X X X X Extracts X X X X ..... of goods were kept in the normal course of business. In pursuance of a notice under section 14 of the said Act the petitioner produced his books of account before the Commercial Tax Officer, Taltola Charge, who fixed his liability under section 4(2) of the said Act and completed assessments under section 11(2) of the Act for 1360 B.S. The said order fixing the date of liability and the order of assessment on its basis were however set aside on appeal with a direction to make the assessment afresh after determining the date of liability. The Commercial Tax Officer again determined the liability on and from Aghran, 1361 B.S. and completed assessments for the years 1361 B.S. and 1362 B.S. and these assessments were again set aside on appeal and the Commercial Tax Officer was directed to make their assessment after fixing the date of commencement of liability. On 4th October, 1963, the Commercial Tax Officer determined the liability of the petitioner to pay tax on and from 30th Jyaishta, 1363 B.S. Thereafter, three assessments were made for the years 30th Jyaishta, 1363 B.S. to 31st Chaitra, 1365 B.S. In making the assessments the jabeda khata (tikcha book) produced by the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of liability of the petitioner since 30th Jyaishta, 1363 B.S. and all subsequent orders on the basis of the said fixation of the liability are valid, lawful, proper and in consonance with the principles of natural justice and are not in breach of article 19 or 265 of the Constitution. It has been submitted that the petitioner had enough remedy under the statute and this application under article 227 of the Constitution was not maintainable in the facts and circumstances of the case. Affidavit-in-reply has been affirmed by the petitioner reiterating the statements and contentions made in the petition. The assessments and certificate proceedings are illegal and void since their inception as the petitioner had no statutory liability either to be registered under the Act or to comply with any of the provisions of the Act. The petitioner was not liable to pay any tax. Mr. Gopal Chandra Chakravarti, the learned Advocate for the petitioner, has contended that the order dated 4th October, 1963, under section 4(2) of the Act determining the liability of the petitioner to pay tax for sale of garlands and bouquets from 30th Jyaishta, 1363 B. S. as made by the Commercial Tax Officer, Tal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date of commencement of the liability of the petitioner, it has been submitted, is a quite valid and proper order. In support of the submission reliance has been made on an unreported decision in Union of India v. Commercial Tax OfficerCivil Rules Nos. 6607 and 6608 (W) of 1969 decided on 12th May, 1972 (Calcutta High Court)., made by Chittatosh Mookerjee, J. In order to decide this contention it is necessary to mention the scheme of the Act. Section 3 of the Act vests the Commissioner with all the powers for carrying out the purposes of this Act and in doing so the State Government has appointed other officers such as Assistant Commissioners, Commercial Tax Officers, etc., to assist him in this matter. These officers shall exercise such powers as are delegated to them by the Commissioner. Section 15 of the Act has empowered the Commissioner to delegate his powers under the Act to the persons appointed under section 3 to assist him subject to such conditions and restrictions as prescribed by the Rules framed under the said Act. Rule 71 empowers the Commissioner to delegate his powers under sections 7 and 11 to the Commercial Tax Officer. Section 4 of the said Act provides for dete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceeding for assessment as envisaged in section 11(2) of the said Act. It is convenient to refer in this connection to the observation of D. Pal, J., in the decision in Sri Surajmal Jain v. Commercial Tax Officer[1973] 32 S.T.C. 601.: "In fact, section 4 of the Bengal Act (the corresponding provision being section 6 of the Central Act) does not envisage the exercise of any power by any Commercial Tax Officer under the Act. That section being a charging section creates the liability to pay. Such liability, as already pointed out, does not depend upon any assessment. If section 6 of the Central Act or section 4 of the Bengal Act requires the making of any order or contemplates the exercise of any power under the aforesaid sections, there would have been a delegation of such power to the subordinate authorities as it has been provided for in the case of the making of an assessment under section 11 of the Bengal Act. Having regard to the scheme of the Central Act as also the Bengal Act, respondent No. 1 had no such power for the determination of any such liability independently of any assessment proceeding. The order made by him on 31st July, 1967, fixing such liability is witho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by certain person, their performance in any other manner than that specified or by any other person than one named, is impliedly prohibited." The said decision has been relied on in Ramchandra v. Govind Joti A.I.R. 1975 S.C. 915 at 918., where it has been held that statutory power has to be exercised in the manner prescribed for exercise of that power and in no other way. The impugned order passed on 4th October, 1963, under section 4(2) of the Act is, therefore, illegal and as such is liable to be set aside. With regard to the submission that there was an alternative remedy by way of revision provided in the statute against the said order determining the liability, which being not availed of, the same could not be challenged in this revisional petition, it appears that the order determining the liability being one without jurisdiction can be successfully challenged in this revisional application. It has been held in the decision reported in Paresh Nath Cloth Stores v. N. Pal[1960] 64 C.W.N. 683. that the existence of an alternative remedy by way of appeal is not a bar to the exercise of the High Court's power of superintendence under article 227 of the Constitution in a case w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al labour or mechanical power". In Nilgiri Ceylon Tea Supply Co. v. State of Bombay[1959] 10 S.T.C. 500., the question was whether blending of different brands of tea purchased in bulk from the market by a registered dealer according to a formula evolved without the application of mechanical or chemical process can be treated as altered or processed after purchase within the meaning of section 8(a) of the Bombay Sales Tax Act, 1953, so that the dealer would not be entitled to deduct the value of the purchase of tea from the turnover for purpose of assessment of sales tax. It was held that although some skill was involved in the preparation of tea mixtures, that could not be regarded as processing within section 8(a) of the Act. The commodity remained in the same condition. There was no alteration in the nature and character of the goods in the preparation of tea mixtures as contemplated by the said Act. In Union of India v. Delhi Cloth General MillsA.I.R. 1963 S.C. 791., it was held by the Supreme Court that the word "manufacture " generally meant the bringing into existence of a new substance and does not mean merely to produce some changes in a substance, however minor in conse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les tax on the turnover of medicines so dispensed. It was tried to be contended on behalf of the respondents that this decision of the Supreme Court did not take notice of a Bench decision of this Court reported in North Bengal Stores Limited v. Board of Revenue, Bengal[1946] 1 S.T.C. 157., where it was held by a Division Bench of this Court that preparation of mixture of different drugs by a dispensing chemist according to the prescription of a physician is manufacture. Whatever may be the effect of this decision it cannot override the ratio decidendi of the case in Commissioner of Sales Tax v. Dr. Sukh Deo[1969] 23 S.T.C. 385 (S.C.)., which is binding on all courts, according to article 141 of the Constitution. Thus on a conspectus of all the aforesaid decisions the following ingredients are necessary to constitute manufacture: (a) There must be change in substance and different article must emerge having a distinctive character and use from the raw material by the use of physical labour or by mechanical process; (b) The articles produced either by physical labour or by mechanical process will be on large scale and will pass as a commercial commodity from hand to hand. In bou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1st Vaisakh, 1370 B.S. to 13th Bhadra, 1370 B.S., which corresponds to 3rd September, 1963. Admittedly, flower was exempted from taxation from 10th May, 1963, by its inclusion in the first column of Schedule I to the said Act and as such the assessment made for the period from 10th May, 1963, to 3rd September, 1963, is ex facie illegal and without jurisdiction. The next question that arises for consideration is whether the orders making best judgment assessments rejecting the tokcha book and estimating the turnover are arbitrary and capricious. Admittedly, the petitioner who claims to be not a manufacturer and as such not a dealer assessable to tax did not file the returns of his turnover. Tokcha book containing accounts of daily sale and purchase of goods by the petitioner was rejected by the Commercial Tax Officer, respondent No. 3, on the ground that there was no supporting vouchers and cash memos. Respondent No. 3 thereafter estimated the turnover of the petitioner according to the best of his judgment and completed assessments on the basis of such estimated turnover. It was contended that respondent No. 3 should not have rejected the tokcha book and if the account was not cl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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