TMI Blog1990 (5) TMI 219X X X X Extracts X X X X X X X X Extracts X X X X ..... ramed under the BFST Act provided that a dealer liable to pay tax may deduct from his gross turnover, its turnover on the sales of various types of goods mentioned in the several sub-clauses of the rule. Clause (28), prior to April, 1975, related to sales of cotton fabrics, rayon or artificial silk fabrics, woollen fabrics, dyed or printed, and sales of mill-made cotton fabrics embroidered after they came out of the mill. By a notification bearing No. 1823-F.T. dated April 1, 1975, clause (28) of rule 3 was substituted with effect from April 7, 1975. The substituted clause is reproduced below: "28(a) Sales of all varieties of textile fabrics (other than satranchi, carpets and druggets) made wholly or partly of cotton, staple fibre, rayon, artificial silk or wool including handkerchiefs, towels, bed-sheets, bed spreads, table cloths, napkins, dusters, cotton velvets and velveteen, tapes, niwars and laces. Explanation.-In this sub-clause the expression 'textile fabrics' includes embroidered textile fabrics, but does not include pure silk cloth, rubberised cloth, belting and pipes including hosepipes. (b) Sales of tobacco other than cigarettes. Explanation.-In this sub-claus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and binding between the parties. 5.. After the aforesaid decision the authorities made assessment for the period 1983-84 which is the subject-matter of the writ application. During the pendency of the appeal before the Division Bench, the BFST Act, 1941, was amended by introducing section 10A with effect from October 1, 1983, providing for payment of interest under circumstances mentioned in the various sub-sections of the said section. 6.. As already stated, in the present application, three orders made under the BFST Act, 1941 and three orders made under the Central Sales Tax Act, 1956, for the period 1983-84 are involved. The orders relate to assessment, imposition of penalty and charging of interest. We have already indicated that at the time of hearing the challenge was confined only to the imposition of penalty and the charging of interest. It may be mentioned here that the Tribunal has no jurisdiction to decide the questions raised relating to the Central Sales Tax Act, the said Act not being a specified State Act under the West Bengal Taxation Tribunal Act, 1987. We shall, therefore, confine ourselves to the imposition of penalty and the charging of interest under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edress against the wrongful acts complained of. The Supreme Court observed that it is well-recognised that where a right or liability is created by a statute which gives a special remedy for enforcing it, remedy provided by the statute only must be availed of. As against this Mr. Bajoria relied upon several decisions of the Supreme Court in justification of the presentation of the writ application in spite of provisions for preferring appeal under the statute. The first case relied on by Mr. Bajoria, is the case of Onkarlal Nandlal v. State of Rajasthan reported in [1985] 60 STC 314. In this case the Supreme Court observed that "ordinarily we do not entertain an appeal directly against an order made by an officer in the hierarchy, when there are other remedies by way of appeal or revision provided to an assessee under the statute". In that case the question at issue was whether a resale made by an assessee in the course of inter-State trade or commerce, can be regarded as a resale within the State with all its consequences. The Supreme Court observed that the High Court had in another case already taken a view on the disputed question. It was, therefore, argued on behalf of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inal determination of the matter. The relief that the respondent-company may get in respect of a particular year, it was contended, was not an effective and adequate relief, for in the next year the respondent-company has again to ask for refund and to prefer an appeal if the application for refund is rejected. The contention thus urged on behalf of the respondent-company was upheld and it was observed that unless an alternative remedy can give full and effective relief to the aggrieved party, it will not stand in the way of his moving the High Court under article 226 of the Constitution. 12.. Hence, upon a preponderance of judicial opinion, it is clear that although ordinarily a writ application under article 226 is not to be entertained where alternative remedy is available, yet in the special circumstances of the case where the alternative remedy available is not adequate and is a mere formality, it would be not in the interest of justice to drive the assessee to pursue the relief in all stages of the hierarchy contemplated by the statute before moving the High Court. In the instant case it is evident that the issues involved in this case do not relate to any disputed question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed with reference to the time when the returns were filed and at that time the applicant was not under any obligation to pay the tax in view of the interim order of the High Court although it was required to show the amount of tax payable under rule 3(28). 15.. The penalty was imposed under section 11(1) of the BFST Act, 1941. The section in substance empowers the Commissioner if he is satisfied that default was made without reasonable cause, to direct that the dealer shall pay by way of penalty in addition to the amount of tax so assessed, a sum not exceeding one and a half times of that amount. It was further submitted by Mr. Bajoria that penalty can only be imposed for contumacious conduct or where there is wilful disregard of the statutory obligations. In support of this contention reliance was placed in the case of Hindustan Steel Ltd. v. State of Orissa [1970] 25 STC 211 (SC); AIR 1970 SC 253. There the question whether imposition of penalty for failure by a dealer to get itself registered in the honest and genuine belief that it was not a dealer, was in question. It was observed that the liability to pay penalty does not arise merely upon proof of default in registering as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n it may be relevant to refer to the grounds for levy of interest as found by the assessing authority. It may be stated thus: As per revised statement in the form of return the dealer admits liability to pay tax on sales on woollen carpets. As the dealer himself has admitted his liability to pay sales tax on woollen carpets, the dealer is liable to pay interest at the rate of 2 per cent on the admitted sale of woollen carpets. It is submitted on behalf of the applicant that it had not, in fact, filed any revised return admitting liability to pay tax for the sale of woollen carpets. There is a provision in sub-section (4) of section 10 of the BFST Act, 1941, enabling a dealer to furnish a revised return if the dealer discovers any omission or other error in any return furnished by him. But sub-section (4) of section 10 prescribes a time-limit for furnishing such return. It has to be filed before the date "prescribed for furnishing of the next return". In the instant case the returns were furnished long ago. In the course of assessments, it is stated by the applicant, that the assessing authority required the applicant to submit a statement showing the break-up of sales and it is com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the High Court. The plea of the department is that the applicant filed a revised return in the course of assessment proceedings which indicated that a considerable sum had not been paid according to the return. The grievance of Mr. Bajoria is that the applicant did not, in fact, file any revised return and he could not lawfully file any such return at the time when the assessments were made in view of the time-limit prescribed by sub-section (4) of section 10 of the BFST Act. The assessing authority, it seems, was conscious of this legal position. He had called upon the applicant to submit a statement showing the break-up of sales which the applicant did and the assessing officer treated that statement as a revised return. This certainly he was not entitled to do. Mr. Bajoria in support of his contention referred to the decision of Maya Debi Bansal v. Commissioner of Income-tax, West Bengal reported in [1979] 117 ITR 125 (Cal). In that case the question involved was where a return is submitted in a wrong form, can assessment be treated as a best judgment assessment as if no return has been filed. It is difficult to apply the facts of that case and the ratio of that decision to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een referred to a larger Bench by the Supreme Court for reconsideration. In support of the contention that such a reference has been made our attention was drawn to page 5 of the Section, "From our Reporter at the Supreme Court" of 66 STC. In the case of Kingsway Co. [1990] 76 STC 119, this Tribunal had observed that the applicant could not, while furnishing the return, leave any part of the return blank but that the applicant could furnish the return of the entire taxable turnover and then claim exemption from payment of the tax in view of the interim order of injunction. It is submitted that, that has exactly been done in this case and, therefore, on the authority of the decision rendered in the case of Kingsway Co. [1990] 76 STC 119 (WBTT) there is no question of charging interest under section 10A of the BFST Act. Mr. Bajoria also referred to the case of Annapurna Biscuit Manufacturing Co. v. State of Uttar Pradesh reported in [1982] 50 STC 56 (All.), Capital Packers v. Commissioner of Sales Tax reported in [1989] 75 STC 42 (All.) and Haji Lal Mohd. Biri Works v. State of U.P. [1973] 32 STC 496 (SC) in support of his contention that where a dealer calculated the tax in cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he facts are different in the sense that the returns submitted by the applicant could not be said to be incomplete far less that there was no return. It is true that it had not paid the tax as per the return but it did so under the authority of the interim order passed by the High Court which permitted the applicant to submit its return in that manner and then claim exemption from the payment of tax. In such a situation even though the ultimate decision by the Division Bench went partly against the applicant, it would be iniquitous to call upon it to pay interest for the amount which it was authorised by the order of the court not to pay till disposal of the matter. To this extent the facts of this case are different from the facts in the case of Kingsway Co. [1990] 76 STC 119 (WBTT). While it may be theoretically correct that when a writ petition is dismissed, interest on arrears becomes payable since there is nothing which prevents the running of interest merely because of the operation of the stay order. But in the fact situation of the case, we feel that the charging of interest was unjust. The grounds for levy of the interest as found by the assessing authority is that the d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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