TMI Blog2005 (8) TMI 632X X X X Extracts X X X X X X X X Extracts X X X X ..... 99. An appeal was preferred against the order on September 9, 1999. During pendency of the appeal an application under section 5 of the West Bengal Sales Tax (Settlement of Dispute) Act, 1999 (hereinafter referred to the Act, 1999 ) was submitted before the designated authority on September 12, 2001. Before filing the said application a sum of Rs. 2,50,000 was deposited on May 24, 2000 to avoid penalty, interest, etc., on the assessed tax. The application under section 5 of the Act, 1999 was disposed of on April 19, 2002 and tax Rs. 1,91,558 finally determined by the authority became payable by the petitioner within 30 days from the receipt of the notice issued in form 2. The competent authority being satisfied with the deposit of Rs. 2,50,000 made previously on May 24, 2000 issued a certificate of settlement in terms of the provision of sub-section (1) of section 8 of the Act, 1999 on July 15, 2002. The petitioner, therefore, became entitled to get refund of Rs. 58,442 being paid in excess which was illegally withheld by the respondent No. 2 on the ground that the applicant-dealer since already had paid more than the demand raised, the question of refund did not arise as per the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch distinguishes persons or things that are grouped together from others left out of the group and (2) that the differentia must have rational relation to the object sought to be achieved by statute in question (AIR 1995 SC 191) sic. 7.. The two tests used to determine permissible classification are cumulative. The first test that the classification should be based on an intelligible differentia means that the basis adopted for classification should not be vague. The second test that the differentia employed ought to have a rational nexus to the object sought to be achieved, is the important part because many classifications can be over-inclusive or under-inclusive. The underlying purpose in subjecting the taxing power to article 14 is that the State should try its best to distribute the burden of taxation evenly and equitably. Hence, the court can interfere only in cases where the classification is capricious, arbitrary or clearly unjust and a taxation law can be struck down being violative of article 14, if there is no reasonable basis behind the classification made by it. 8.. In the present case, as it appears from annexure B to the application, the arrear tax in dispute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o pay only 33 per cent of the arrear tax in dispute, whereas a dealer who had paid more than 33 per cent of arrears in tax in dispute before filing an application under section 5, would have to suffer loss since the amount of tax paid in excess would be confiscated, which is violative of article 14 of the Constitution of India. 10.. The grievance reflected by the petitioner, in my opinion, has reasonable basis. Truly, it appears that the Legislature has created discrimination among the same group of dealers by enacting the first part of the provision of section 14 of the Act, 1999. This legislation, i.e., provision for non-refundable excess payment has, at all, no reasonable basis. There is no reasonable explanation as to why a group of dealers who do not deposit any amount shall get the benefit of settlement paying only 33 per cent while others who deposit more than 33 per cent for the same cause will be deprived from getting refund of the balance amount. The classification thus made, is fanciful and clearly unjust and offends the rule of equality under article 14 of the Constitution. We do not find any conceivable justification for such classification among the dealers for som ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f law. 16.. It has been contended by the petitioner that denial of refund of excess amount paid under section 14 of the Act, 1999 is violative of article 14 of the Constitution of India inasmuch as the persons who are availing of the settlement of scheme under the aforesaid Act without making any payment are benefited by paying only 33 per cent of the arrear tax in dispute whereas those who deposited more than 33 per cent of the arrear tax in dispute are deprived of getting refund of the balance excess amount. 17.. On behalf of the respondents, it is submitted that since the petitioner opted to come under the Act, 1999 after depositing more than 33 per cent of the amount of arrear tax in dispute, he is not entitled to get refund under section 14 of the said Act. 18.. The point for consideration is that whether the petitioner is entitled to get refund of the amount so claimed. 19.. This application was, at first, assigned to a two-Member Bench and subsequently it was assigned to a three-Member Bench on the ground that in order to decide whether the petitioner is entitled to get refund, it is required to examine whether section 7 and section 14 of the Act, 1999 actually v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titutionality of such legislation by the generality of its provisions. Law relating to economic activities should be viewed with greater latitude than laws touching civil rights such as freedom of speech, religion, etc. There is always a presumption in favour of the constitutionality of a statute and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional principles. The Legislature understands and correctly appreciates the needs of its own people, its laws are directed to problems made manifest by experience and its discriminations are based on adequate grounds [(1981) 4 SCC 675 at page 676]. In another judgment, the apex Court has observed that the court should try to sustain validity of the Act to the extent possible. It should strike down the enactment only when it is not possible to sustain it. The court should not approach the enactment with a view to pick holes or to search for defects of drafting much less inexactitude of language employed. After all, an Act made by the Legislature represents the will of the people and that cannot be lightly interfered with. The unconstitutionality must be plainly and clearly established ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase between the State of Kerala v. Builders Association of India [1997] 104 STC 134, the honourable Supreme Court has observed that having voluntarily and with the full knowledge of the features of the alternate method of taxation opted to be governed by it, a contractor cannot be heard to question of validity of the relevant sub-sections or the rules. In this instant case too, the petitioner opted voluntarily and with the full knowledge of the features of the Act, 1999 to be governed by it, he cannot question the validity of section 7(1)(a) and section 14 of the Act. The learned advocate for the petitioner, in course of his argument, cited a decision of the three-Member Bench of this Tribunal in V.J. Suraiya v. Additional Commissioner, Commercial Taxes, West Bengal [2002] 127 STC 575 wherein the retrospective operation of the amended section 7 of the Act, 1999 was held discriminatory, confiscatory and unconstitutional. He has also cited a decision of the Tamil Nadu Taxation Special Tribunal which held that section 6(4) of the Samadhan Scheme which provides for denial of refund of the excess amount as unconstitutional [Nagalakshmi Co. v. State of Tamil Nadu [2003] 132 STC 306 (TN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me entitled to get refund of Rs. 58,442 being paid in excess. But the petitioner's grievance is that respondent No. 2 is withholding refund in view of the provision of section 14 of the Act of 1999. 3.. The contention of the Revenue is that the provision of section 14 of the 1999 Act debars any kind of refund and therefore the petitioner will not get back any refund. Therefore, the main dispute arises whether the petitioner is entitled to the refund of the amount as claimed. 4.. There is no dispute that Rs. 58,442 has been lying with the respondent as the tax liability of the petitioner came down to Rs. 1,91,558 in view of the determination of the competent authority under the Act of 1999. Let us now turn over to the Act of 1999 itself. The preamble to the Act runs as: An Act to provide for expeditious enforcement of payment of arrear tax, penalty or interest in dispute under the sales tax laws in West Bengal by way of settlement of such dispute . Therefore the purpose for which this Act was brought to our statute book is to give an opportunity to the taxpayers to pay their arrears of tax by way of settlement of dispute with the Revenue authority and it aims at the aug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in it was clearly stated that if the parties have taken up a particular position before the court at one stage of litigation, it is not open for them to approbate and reprobate and to resile from that position. It means that the parties shall not be heard to say anything contrary to each other. Therefore, once the petitioner has opted for the Act of 1999, he cannot escape his liability under the said Act. When he took advantage of the Act of 1999 by making an application under section 5 of the Act, he must have known the mischief of section 14 of the said Act. It may be true that the persons who are availing the settlement scheme without making any payment will be benefited by paying only 33 per cent under section 6 of the Act of 1999 whereas those who will deposit more than 33 per cent of the arrear tax in dispute will be deprived of getting refund of the balance amount. But here the Act is very specific. Let us now turnover to section 14 of the Act which runs: Any amount paid by an applicant under section 6 shall not be refundable under any circumstances . 7.. Now to get rid of the mischief of section 14, the petitioner has sought for establishing that section 14 of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1) 4 SCC 675 at page 676]. In another judgment, the apex Court has observed that the court should try to sustain validity of the Act to the extent possible. It should strike down the enactment only when it is not possible to sustain it. The court should not approach the enactment with a view to pick holes or to search for defects of drafting much less inexactitude of language employed. After all, an Act made by the Legislature represents the will of the people and that cannot be lightly interfered with. The unconstitutionality must be plainly and clearly established before an enactment is declared as void (State of Bihar v. Bihar Distillery Ltd. AIR 1997 SC 1511). 21.. In the light of the aforesaid observations of the apex Court, the case of the petitioner may be examined. The petitioner's case is that the total arrear tax in dispute is Rs. 5,04,099 (annexure B ). The petitioner deposited a sum of Rs. 2,50,000 and an application under section 5 of the Act, 1999 was filed on September 12, 2001 which was disposed of on April 19, 2002. When he submitted the application under section 5 of the Act, 1999, he was well aware of the application under section 5, the excess amount ..... X X X X Extracts X X X X X X X X Extracts X X X X
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