Decided on December 15,1999

Shaw Wallace Gelatines Ltd. Appellant
Commissioner Of Commercial Taxes And Ors. Respondents


L.N.Ray, Chairman - (1.) IN these two applications under Section 8 of the West Bengal Taxation Tribunal Act, 1987, which are in the nature of writ applications under Article 226 of the Constitution of India, the applicant -company is challenging two seizures of goods under seizure case Nos. 613 and 618 of 1998 -99 dated February 16, 1999 and February 17, 1999, respectively. The question that arises for decision is, whether di -calcium phosphate or DCP (animal feed grade) falls under Serial Nos. 12 and 13 of Schedule I to the West Bengal Sales Tax Act, 1994 ("1994 Act") and hence tax -free. Serial Nos. 12 and 13 of Schedule I are as under : "12. Balanced feed for cattle and pig. 13. Balanced poultry feed."
(2.) THE applicant's case is that it is a registered dealer under the 1994 Act and has been carrying on the business of sale of "nutritional DCP (animal feed grade) for cattle and pigs". DCP is a cattle and poultry feed supplement which provides nutrition and makes "balanced feed" for promoting maximum growth in the shortest possible time for achieving maximum production of meat and milk. The applicant -manufactures "nutritious feed additives (feed grade)" in its factory at Jabalpur. DCP is used "for supplementing cattle feed". In Glaxo Laboratories (India) Ltd. v. State of Gujarat [1979] 43 STC 386 (Guj) and Glindia Ltd. v. Union of India (1988) 36 ELT 479 (Bom) it was held that animal feed concentrates, and animal feed supplements are covered by the generic term "animal feed". The Supreme Court of India approved the view taken by the Bombay High Court in the second case. Even then, confusion prevailed in West Bengal. To repel that confusion, the Commissioner of Commercial Taxes, West Bengal by his "explanatory circular" No. 16347 (300) -C.T. dated September 14, 1992 clarified that "all cattle, poultry feed supplements" should be treated as covered by the entry "balanced poultry feed", commonly known as "Mash" under serial No. 67 of Schedule I of the Bengal Finance (Sales Tax) Act, 1941 which has been replaced by the 1994 Act. At the time, serial No. 69 of Schedule I of the 1941 Act was : "Balanced feed for cattle and pig". But respondent No. 1 issued a fresh circular under Memo No. 19752 (500) -C.T. dated September 25, 1998. The relevant extract from the earlier circular dated September 14, 1992 is reproduced below : - - "The Gujarat High Court has in the case of Glaxo Laboratories (India) Ltd. v. State of Gujarat [1979] 43 STC 386 held that, on a true and correct interpretation of the words 'cattle feed' and 'poultry feed', those terms must include not only that food which is supplied to domestic animals and birds as an essential ration for the maintenance of life but also that feed which is supplied over and above the maintenance requirements for growth of fattening and for production purposes. The Supreme Court has also rejected the special leave petition filed by the Andhra Pradesh Government in the said matter. In view of the above, all cattle, poultry feed supplements should be treated as covered by the entry balanced poultry feed, commonly known as 'Mash' as enumerated in item No. 67 of Schedule I appended to the Bengal Finance (Sales Tax) Act, 1941." The later circular dated September 25, 1998 was issued in connection with serial Nos. 12 and 13 of Schedule I to 1994 Act saying that feed supplements contain mainly medicinal ingredients and do not serve the purpose of feed. It was issued in supersession of the earlier circular dated September 14, 1992. The applicant's further case is that thereafter the sales tax authority of Duburdih check -post seized the impugned consignments of DCP (animal feed grade) for non -production of valid way bills. Those consignments were being imported into West Bengal under consignment Nos. 1101 and 1102 dated February 8, 1999 and 1254 and 1255 dated February 11, 1999. Way bills were necessary for taxable goods, but according to applicant, the said goods were not taxable.
(3.) BY interim orders dated March 1, 1999 in RN -34 and RN -35 of 1999 we directed release of the seized goods on furnishing security and for completion of the penalty proceedings which had been initiated. Accordingly, the Commercial Tax Officer, Duburdih check -post, completed the penalty proceedings. By order dated April 10, 1999, he imposed a penalty of Rs. 99,000 in respect of the seizure challenged in RN -34 and a penalty of Rs. 96,000 in respect of the seizure challenged in RN -35, under Section 71 of 1994 Act. Then the applicant challenged the orders of penalty by filing supplementary affidavits.;

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