(1.)The question that arises for consideration in this Rule is as to whether sugar candy is exempted from operation of the West Bengal Sales Tax Act, 1954 (West Bengal Act 4 of 1954) (hereinafter referred to as the said Sales Tax Act, 1954) by virtue of the notification dated March 3, 1958 issued under S. 26 of the said Sales Tax Act, 1954 by the State Government and secondly whether such sugar candy comes within the definition of any of the notified commodities taxable under the said Sales Tax Act, 1954 on the notification dated February 6, 1967.
(2.)In order to decide the aforesaid issues it would be necessary to refer to the changes in the relevant statutory provisions and the notifications issued thereunder from time to time as also to certain undisputed facts. On July 1, 1941 the Bengal Finance Sales Tax Act, 1941 (Bengal Act 4 of 1941) (hereinafter referred to as the Sales Tax Act, 1941) came into effect. This Sales Tax Act of 1941 imposed incidence of tax on sale of goods but on the provisions of section 6 read with the entry No.3 Schedule I of this Act 'sugar' was exempted from the operation of this Statute until the Schedule was amended by omission of the term 'sugar' by section 13(a) of the Bengal Finance Sales Tax Second Amendment Act, 1955 (West Bengal Act 22 of 1955). On such amendment with effect from September 25, 1955 sugar came under the incidence of the Sales Tax Act of 1941. It was so done obviously to bring it within the purview of the Sales Tax Act of 1954 by a notification issued under the provisions of section 25 of the said Sales Tax Act of 1954. The said notification was issued on the day following that is, September 26, 1955 and as a result of the aforesaid amendment and the notification 'sugar' came to be taxable under the Sales Tax Act of 1954. In the background of this position on December 24, 1957 a Central Act known as the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (Act 58 of 1957) (hereinafter referred to as the Additional Duties Act, 1957) came into force. By virtue of the provisions of section 3 of this Additional Duties act, 1957 excise at the rate specified in the First Schedule thereto was imposed on sugar. The Government of West Bengal in order to share the distribution of additional duties of the Second Schedule thereto issued a notification dated March 3, 1958 referred to hereinbefore. It is necessary to set out this notification as we shall have to find out the true scope and import of this notification.
No. 506F, T. - 3rd March 1958 - Whereas the Governor is of opinion that it would be in the public interest so to do.
Now, therefore, in exercise of the power conferred by section 26 of the West Bengal Sales Tax Act, 1954 (West Bengal Act IV of 1954), hereinafter referred to as the said Act, the Governor is pleased hereby to exempt from the operation of the said Act with effect from the 14th December 1957 sugar, being a notified commodity within the meaning of cause (i) of that section subject to the condition that in respect of sugar which had been sold before the commencement of the West Bengal Sales Tax (Amendment) Ordinance, 1958 ad also in respect of sugar on which no additional duties of excise have been levied under the Additional Duties of Excise (Goods of Special Importance) Act, 1957, the dealer claiming such exemption shall make, to the satisfaction of the prescribed authority referred to in sub-section (1) of Section 3 of the said Act, a lump payment on account of sales tax in respect of such sugar.
By order of the Governor,
Secy. to the Govt. of West Bengal"
(3.)It is not in dispute that on the basis of the aforesaid notification dated March 3, 1958 sugar was exempted from the incidence of the Sales Tax Act, 1954. In the meantime with effect from April 29, 1961 sugar was also declared to be one of the goods of special importance in inter-State trade and commence under section 14 of the Central Sales Tax Act, 1956 (Act 74 of 1956). On such declaration section 15 of the Central Sales Tax Act, 1956 brought in the consequential restriction on the right of a State of impose a tax on the sale or purchase of sugar. While this position was continuing the Government of West Bengal on February 6, 1967 issued two notification one under section 25 of the Sales Tax Act, 1954 specifying certain commodities to be taxable under the Sales Tax Act, 1954 with effect from March 1, 1967 and the other under section 4 of the Sales Tax Act, 1954 specifying the rate of tax. Commodities in this notification are "all varieties of lozenges, including any item of lozenges made or processed in pan or cooker; hard boiled sugar confectionary toffees, caramels; chocolates; chocolate bars with brand names (e.g. Cadbury chocolate, Sathe's chocolate) and without brand names any gelatine product known as cough lozenges or jujubes and sweet gums such as chewing gums."