B.C.CHAKRABARTI - (1.) BOTH the cases arise out of the same application initially filed in the High Court as a writ application under article 226 of the Constitution - one for extension of the interim order in terms of the provisions of the West Bengal Taxation Tribunal Act, 1987 and the other relating to the main application. The prayer for extension of the interim order was allowed vide order dated May 17, 1989. In regard to the main application, the case of the applicant is as follows : The applicant No. 1 is a private company within the meaning of the Companies Act, 1956 and the applicant No. 2 is a shareholder of the said company. The company carries on the business of manufacturing television receiver sets at its factory situated at Raghunathpur, Jaynagar, in the district of 24 Parganas. It is a newly set up small-scale industrial unit duly registered with the Cottage and Small-scale Industries Department of the Government of West Bengal. The goods manufactured by the company have been notified under the West Bengal Sales Tax Act, 1954 (hereinafter referred to as "the 1954 Act" ). The company is duly registered as a dealer under the 1954 Act and also under the Central Sales Tax Act, 1956. A notification being Notification No. 1177-F. T. dated March 31, 1983, provided that no tax shall be payable by a dealer under the Act on sales by a newly set up small-scale industry of notified commodities other than those included in Schedule X manufactured by it during the period of three years if the industry is situated within the area of the Calcutta Metropolitan District or for five years if it is situated elsewhere in West Bengal from the date of its first sale of such manufactured notified commodity. A dealer claiming the benefit of the notification was required to obtain a certificate of eligibility. The first sale of the applicant was made on March 8, 1984. The applicant No. 1 applied to respondent No. 3 for issuance of the eligibility certificate pursuant to which respondent No. 3 issued a certificate of eligibility dated December 21, 1984, certifying that the company was eligible to claim exemption from tax during the period of validity of the certificate. The certificate was initially valid for the period from March 8, 1984 to December 31, 1984 and was, thereafter, renewed and extended from time to time up to March 7, 1987. In terms of the Notification No. 1177-F. T. dated March 31, 1983, the applicant was granted exemption for the period of three years. Section 4aaa provides that every dealer whose aggregate of the gross turnover under the 1954 Act and the Bengal Finance (Sales Tax) Act, 1941, exceeds Rs. 50 lakhs, shall in addition to the tax payable by him under section 4 of the Act, be liable to pay turnover tax on his turnover as is specified in sub-section (2 ). Under sub-section (2) of section 4 of the 1954 Act, a dealer liable to pay tax under sub-section (1) of the said section and availing himself of the benefit under section 23a of the Act by furnishing a declaration referred to in the proviso thereto, shall, in addition to the tax payable under sub-section (1), be liable to pay tax on all purchases from an unregistered dealer of goods taxable under the Bengal Finance (Sales Tax) Act, 1941, required by him for use directly in the manufacture of the notified commodity. In respect of the period from January 1, 1985 to March 7, 1987, a total sum of Rs. 19,04,042. 05 was paid by and/or realised from the applicants by way of turnover tax under section 4aaa of the Act. Further a sum of Rs. 2,33,854. 70 was paid by and/or realised from the company on the purchases made by them from unregistered dealers by way of purchase tax under sub-section (2) of section 4 of the Act. The respondents also purported to realise interest amounting to Rs. 1,92,408 for alleged delay in payment of the said amounts. The applicants were later advised that they were not liable to pay turnover tax or purchase tax under the Act during the period of exemption and that the amounts referred to above were paid under a mistake of law. Thereafter, the applicants filed revised returns claiming that they were not liable to pay any turnover tax during the period of exemption which the company had deposited under a mistaken view of the law. The applicants addressed several letters in this behalf and claimed refund of the sums paid by them towards turnover tax. The last reminder issued by the applicants is dated February 11, 1988. The applicants, however, were not favoured with any reply to the letters addressed by them to the respondents. While making the assessment for the period up to December 31, 1984, the respondent, Commercial Tax Officer, by his order dated April 15, 1988, held that the company was entitled to the exemption under the said notification but purported to levy purchase tax on purchases made by them from unregistered dealers. For the period up to December 31, 1984, no amount by way of turnover tax was levied or demanded by the respondents. In September, 1988, the applicants filed revised returns for the period from January 1985 to February 1987 before respondent No. 1 claiming therein that they were not liable to pay any purchase tax during the period of the said exemption. The order dated April 15, 1988, passed by the respondent, Commercial Tax Officer, purporting to levy purchase tax and turnover tax in respect of the period from March 8, 1984 to March 7, 1987, was illegal, invalid and without jurisdiction.
(2.) ON the aforesaid grounds and interpretation of the different sections of the Act to which we shall advert to in greater details later on, the applicants prayed for an injunction restraining the respondents from making any assessment under the Act save in accordance with the revised returns for the period from January 1, 1985 and from levying any purchase tax or turnover tax in respect of the period of exemption. The applicants have also prayed for a direction upon the respondents to refund the total sum collected by the respondents from the applicants by way of purchase tax and turnover tax and interest in respect of the period from March 8, 1984 to March 7, 1987, together with interest at the rate of 2 per cent per month from the date of collection till the date of refund. The application is opposed. The case of the respondents as made out in the affidavit-in-opposition, may be briefly stated thus : Notwithstanding the fact that the applicants enjoyed exemption from payment of sales tax as a small-scale industrial unit by virtue of eligibility certificate granted to the applicants, the applicants are, none-the-less, liable to pay turnover tax in terms of section 4aaa of the 1954 Act. The case of a dealer enjoying exemption by virtue of eligibility certificate under the 1954 Act, stands on a different footing from that of a dealer under the Bengal Finance (Sales Tax) Act, 1941, under similar circumstances. The claim that the applicants are not liable for turnover tax or purchase tax upon an analogy to the provisions of the BFST Act, 1941, is unwarranted. Assuming that there might have been some scope for confusion in regard to the liability for payment of turnover tax, there could be no confusion in regard to the liability for payment of purchase tax. In fact, the applicants are liable to pay both turnover tax and purchase tax under the 1954 Act during the period of validity of the certificate of eligibility. The revised returns submitted by the applicants were so made under a gross mistake of law. The demand for turnover tax and purchase tax in respect of the impugned period was valid and authorised by law. On such averments the respondents pleaded that the demand for refund of the amounts already paid by the applicants is not tenable and the case, accordingly, is liable to fail.
(3.) THE applicants filed an affidavit-in-reply which virtually is a repetition of the claim made in the original writ application and denial of the points raised in the affidavit-in-opposition.;