TMI Blog1996 (6) TMI 341X X X X Extracts X X X X X X X X Extracts X X X X ..... of the petitioners is that in view of the aforementioned scheme they were only entitled to enjoy tax holidays for the aforementioned period not only as regards payment of sales tax but also turnover tax in terms of the provisions of section 6B(2)(e) of the said Act which was deleted with retrospective effect by reason of the 1987 Amendment Act. 5.. It is contended that the petitioners were not being granted eligibility certificate for which they filed a writ application and the said writ application having been allowed, an eligibility certificate was granted in their favour. 6.. The petitioners allegedly pursuant to or in furtherance of the promise made by the State set up the industry in the year 1980 and the first sale from its manufacturing unit took place on September 21, 1982. According to the petitioners, they were entitled to such tax holidays till 1984 but by reason of the aforementioned 1987 Amendment Act which came into force with effect from July 1, 1987, the said benefit granted to them had been taken away and thus, the said Act should be held to be ultra vires article 14 of the Constitution of India. 7.. The learned trial Judge upon hearing the counsel for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned counsel submits that from a perusal of section 6B(2)(e) which was inserted with effect from April 1, 1979 by West Bengal Act No. 4 of 1979, it would be evident that an exception was created thereby inasmuch as the factors mentioned therein were not to be included in computation of gross turnover. Our attention was drawn to section 5(2)(a)(vi) of the Act for the purpose of showing that in terms thereof such other sales as prescribed were not to be included and in that view of the matter rule 3 comes into the picture in terms whereof promise was made for grant of tax holidays to newly set up SSI units. According to the learned counsel, in this view of the matter, the relief which was granted once, cannot be taken away by reason of the amending Act which came into force with effect from July 1, 1987 with retrospective effect. The learned counsel submits that in any event such benefits could not be given to certain industries and denied to some other industries and on that score also article 14 of the Constitution of India comes into play. The learned counsel in this connection relied upon Lohia Machines Ltd. v. Union of India reported in [1985] 152 ITR 308 (SC); [1985] 2 SCC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses it covers, not by the freaks and exceptions it martyrs. 16.. A free-flow of trade is although protected by a statute, the same cannot be said to be ultra vires article 301 unless such free-flow of trade is directly or materially impaired by a tax. It is beyond any cavail of doubt that regulatory or compensatory measures can be taken by the Legislature in view of article 304(b) of the Constitution of India. Normally a tax on the sale of goods does not directly and materially impede the free-flow of movement of transport of goods. 17.. It is not in dispute that the Supreme Court of India in Hoechst Pharmaceuticals Ltd. v. State of Bihar reported in [1984] 55 STC 1 has held levy of turnover tax as valid. The said question came up for consideration also before this Court in Century Spinning Mfg. Co. v. State of West Bengal reported in [1989] 73 STC 277 wherein this Court clearly held that turnover tax is a tax on sales and not on income. It further held that the provision of section 6B are not violative of articles 301 and 304 of the Constitution. 18.. Levy or imposition of a tax is not a restriction at all in the matter of carrying on a trade. 19.. It is also well-known ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he West Bengal Act No. 4 of 1979 provides for liability for payment of turnover tax and the rate thereof. 24.. Section 6B(2) provides that the turnover tax shall be levied on the part of the gross turnover of a dealer during any period which remains after deducting therefrom his turnover during that period on the factors enumerated therein. Clause (e) of section 6B(2) referred to sale of goods which are generally exempted from tax under sub-clause (vi) of clause (a) of sub-section (2) of section 5. The said provision, as indicated hereinbefore, was omitted with retrospective effect by section 2(4)(B)(ii) of the West Bengal Taxation Laws (Amendment) Act, 1987. 25.. Sub-clause (vi) of clause (a) of sub-section (2) of section 5 refers to such other sales as may be prescribed. The said provision was inserted with effect from June 4, 1961 by Bengal Finance (Sales Tax) (Amendment) Act, 1961 by section 3(2) of West Bengal Act No. XIV of 1961. It is, therefore, evident that section 6B having been inserted later on could not have been contemplated to be within the purview of rule 3. 26.. Rule 3 of the Bengal Sales Tax Rules, 1941 provides that in calculating his taxable turnover, a de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion (2) provides that the turnover tax shall be levied on that part of the gross turnover of the dealer during any period which remains after deducting therefrom its turnover during that period on certain sales as mentioned in different sub-sections. Clause (e) of the said provision undoubtedly referred to sale of goods which are generally exempted from tax. Therefore, it is evident that when clause (e) referred to section 5(2)(a)(vi) only, it referred to the goods as may be prescribed inasmuch as otherwise the words such other sales as may be prescribed as contained in clause (g) of subsection (2) of section 6B become otiose. Furthermore, as indicated hereinbefore, rule 3(66) which was inserted in the year 1975 could not have been intended to cover turnover tax which was levied much later on. It is now well-known that in the matter of interpretation of statutes, the history of legislation also plays a vital role. 34.. It has to be borne in mind that there is no provision for exemption of turnover tax in the 1954 Act in respect of the small-scale industries. Section 4AAA of the 1954 Act, relating to imposition of turnover tax is a self-contained code, which separately provides ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y provided by making a new rule. 40.. In Lohia Machines Ltd. v. Union of India [1985] 152 ITR 308 (SC), several decisions had been cited to show that even a fiscal statute can be amended with retrospective effect. See Jawaharmal v. State of Rajasthan reported in AIR 1966 SC 764 at page 772, Assistant Commissioner of Urban Land Tax v. Buckingham and Carnatic Co. Ltd. reported in [1970] 75 ITR 603 (SC) at page 620, Krishnamurthi and Co. v. State of Madras reported in [1973] 31 STC 190 (SC) at page 197, Hira Lal Rattan Lal v. Sales Tax Officer [1973] 31 STC 178 at page 186 and State of Gujarat v. Ramanalal Keshava Lal Soni reported in [1983] 2 SCC 33 at page 62. 41.. In Shantilal Brothers v. State of Karnataka reported in [1985] 59 STC 178 (Kar), Jagannath Sethy, J. (as His Lordships then was) clearly held that a validating Act may be given a retrospective effect. 42.. In Bajaj Tempo Ltd. v. Commissioner of Income-tax reported in [1992] 196 ITR 188 (SC); [1992] 3 SCC 78 upon which also strong reliance has been placed by Mr. Paul has no application in the present case. In that case, it was held that a reasonable and purposive construction is necessary to make the provision me ..... X X X X Extracts X X X X X X X X Extracts X X X X
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