TMI Blog1996 (7) TMI 535X X X X Extracts X X X X X X X X Extracts X X X X ..... he liberty to issue serially numbered bills or cash memos separately for each month. 2.. The case of applicant is that the firm is a registered dealer under the 1941 Act as a reseller of iron and steel items, hardwares, etc., and as a manufacturer of items like steel chips, brackets, etc. The manufacturing unit is located at 1, Height Road, Liluah, Howrah, which is registered as a small-scale unit under the Cottage and Small Scale Industries Department of the State Government. Its application for eligibility certificate for deferment of tax under section 10F of the 1941 Act was granted and the eligibility certificate was issued for the period from January 30, 1992 till January 29, 1993 for the first time. It is claimed that at the time of issuing that certificate, there was a thorough and detailed enquiry, inspection and examination of all necessary books of account and records by the concerned authority. The advantage of deferment of tax can be availed of under section 10F for seven years from January 30, 1992. According to statutory provisions, the eligibility certificate is required to be renewed on expiry of its validity which cannot extend beyond a period of twelve months in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he prayer for renewal, nor respondent No. 3 should have confirmed such rejection. The Assistant Commissioner who decided the prayer for renewal of the E.C. had no jurisdiction to review the findings of the earlier Assistant Commissioner who had issued the E.C. for the first time. The applicant has distinguished rule 3(66a) of the 1941 Rules from rule 48K(2), pointing out that in rule 48K(2) it is not stated that the purpose of issuing serially numbered cash memos and bills is to show proof of sales of goods which are claimed to be exempt. Rule 48K(2), it is contended, does not specifically mention that bills should be issued serially during a year or an accounting year. The word year cannot be incorporated in rule 48K(2). The distinction between exemption under rule 3(66a) and the deferment of tax under rule 48K(2) is emphasised by arguing that one is a provision for exemption from tax and the other is only for deferment of tax. 3.. The case of respondents in their affidavit-in-opposition is that the applicant had actually violated one of the vital conditions for renewal of E.C. under rule 48K(2) by not issuing serially numbered bills/cash memos for sales of goods manufactured ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efit is conditional. The conditions and restrictions are prescribed in rules 48C to 48K of 1941 Rules. There is also no dispute about that. Mr. S. Dasgupta, learned advocate for the applicant himself referred to rule 48C(4) and (5). According to him, rule 48C(5) does not indicate under what circumstances an application may be rejected. But the applicant has not challenged the validity of rule 48C(5). According to rule 48C(5), grant of the initial E.C. can be validly made for a period not exceeding twelve months at a time, subject to renewal of such certificate for every period of twelve months thereafter on an application made in form XXXVIB within thirty days before the expiry of the validity of such certificate and, in the event of rejection of the application, shall record reasons therefor and intimate the applicant . It is, thus, clear that renewal of E.C. is not automatic. There should be an application in the prescribed manner within the prescribed period and it is also liable to rejection for recorded reasons. This will be further evident from rule 48E. Under rule 48E, in case of contravention of provisions of the 1941 Act or the Rules thereunder, deferment of tax under sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on in question so that the dealer loses the benefit. On the strength of the said decision he also argued that rule 48K(2) should be liberally construed. Rule 48K(2) is reproduced below for the sake of proper appreciation: 48K(2). A registered dealer claiming deferment of payment of tax under section 10F or remission of tax under section 10G, shall keep separate account in respect of a newly set up industrial unit, issue serially numbered bills or cash memos for sales of goods manufactured in such unit and keep purchase bills or cash memos for purchase of goods used directly in the manufacture of goods therein. The requirement of this provision is clear that the newly set up industrial unit should have separate account and should issue serially numbered bills or cash memos for sales of its manufactured goods and also shall keep purchase bills or purchase cash memos of goods directly used in the manufacture of goods in that unit. The object is to ensure that the dealer who claims the benefit does not mix up his any other business with the newly set up industrial unit for which the benefit is claimed. The requirement of issuing serially numbered bills or cash memos for sales is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he dealer s manufacturing business in question from any other business he may have. 7.. Mr. Dasgupta argued that the decisions of this Tribunal relied on by Mr. Goswami, appearing for the respondents, cannot be applied to the present case which is under section 10F and rule 48K(2), because rule 3(66) and rule 3(66a) of the 1941 Rules were for exemption from tax, whereas section 10F and rule 48K(2) were for deferment of payment of certain percentage of tax for several years. But rule 3(66a) also required that the industrial unit should issue serially numbered cash/credit memos for sales of goods manufactured in such industry. Thus, the provisions in rule 48K(2) and that in rule 3(66a) relating to issuance of serially numbered bills or cash memos or credit memos for sales of goods manufactured in the unit, are in pari materia, or identical. In spite of the fact that rule 3(66a) was for exemption from tax, while section 10F and rule 48K(2) were for deferment of payment of tax, the provisions are identical in language and intention and they appear in the same Act and the same Rules. We do not see any reason to take a different view for the purpose of rule 48K(2). As held by the Sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Various other provisions of the 1941 Act like sections 4, 6B, 6D(1), 8, 11 and rule 18 (about annual returns) contemplate year as a unit of time or period. Section 2(j) defines year in relation to any dealer, as the year by reference to which, according to his declaration, the accounts are ordinarily maintained in his books, and where no such declaration is made, year means a British calendar year. It was held by this Tribunal in Nanda Technisch (P) Ltd. (RN-114 of 1993 decided on October 8, 1993), that cash memos are an integral part of a dealer s account and these are documents relating to accounts. Hence, it was held that without any doubt, year is the unit of period of time in relation to issuance of cash memos and under rule 3(66a), serially numbered cash memos with a running serial must be issued during the dealer s declared accounting year, namely, from 1st April or any other day which was the date of first sale of the manufactured product, till the 31st March of the following year. This decision is entirely applicable to the present case. In this connection reference should be made to the case of Ghanshyamdas v. Regional Assistant Commissioner of Sales Tax [1963] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch initial E.C. is to be applied for under rule 48C(4), and the initial E.C. cannot be issued for more than twelve months and every renewal should also be for only twelve months. That being so, the Assistant Commissioner who rejected the prayer for renewal of E.C. was not bound by the findings of his predecessor who had issued the E.C. for the initial period of twelve months. The second Assistant Commissioner dealing with the renewal application was obliged to consider all aspects of the matter to conclude whether the applicant had fulfilled the conditions and restrictions during the period for which renewal was applied. By not issuing year-long serially numbered cash memos for sales of manufactured products of the unit, the applicant did not fulfil all the conditions and restrictions to entitle her to renewal of the E.C. At one stage Mr. Dasgupta submitted on behalf of the applicant that cash memos were issued according to month-wise serial numbers, as the applicant was keeping computerised accounts. But Mr. Dasgupta could not say for certain that keeping of computerised accounts required that cash memos should be issued only according to month-wise serial numbers. Nor could he ..... X X X X Extracts X X X X X X X X Extracts X X X X
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