Sabyasachi Mukharji, J. - (1.) The petitioner is a partnership firm. The petitioner is registered under the Bengal Finance (Sales Tax) Act, 1941. For the assessment period ending with the four quarters in December, 1960, the petitioner claimed deductions under Section 5(2)(a)(ii) of the said Act. The said deductions except for one item were allowed, but the claim for deduction of Rs. 50,942 and supported by the declaration form No. A 10879493 was disallowed. The Commercial Tax Officer, Manicktola Charge, was of the opinion that the transaction in question was not genuine as it did not, according to him, take place in the normal course of business. He, accordingly, disallowed the claim for deduction on that account. Being aggrieved by the aforesaid decision, the petitioner preferred an appeal to the Assistant Commissioner, Commercial Taxes. The Assistant Commissioner found that the purchasing dealer had obtained the declaration form in question on 17th December, 1959 and the said declaration form was alleged to have been obtained by the petitioner on 18th June, 1960, although according to the purchasing dealer's application dated 21st December, 1959, declaration forms issued on 17th December, 1959, had already been exhausted by that time. The petitioner, thereafter, preferred a revision application before the Additional Commissioner, Commercial Taxes. The Additional Commissioner, Commercial Taxes, by his order also confirmed the decision of the Commercial Tax Officer. Against the impugned order the petitioner moved the Member, Board of Revenue, West Bengal. The Member, Board of Revenue, by an order dated 9th May, 1972, dismissed the said revision application. The petitioner, thereupon, on 12th January, 1973, moved this court and obtained a rule nisi in this application under Article 226 of the Constitution.
(2.) The petitioner's ground of challenge to the impugned orders is that the petitioner, having complied with all the conditions necessary under Section 5(2)(a)(ii) of the Bengal Finance (Sales Tax) Act, 1941, as well as Rules 27A and 27AA of the Bengal Sales Tax Rules, 1941, was entitled to deduction as claimed for the transaction covered by the said declaration form. The respondent-authorities in refusing to grant the said deduction has acted arbitrarily and contrary to the provisions of law. It was, further, contended that there were no materials for holding that the transactions represented by the said declaration form was not genuine and the respondent-authorities had acted on mere surmise or guess. In aid of this submission, counsel for the petitioner drew my attention to a Bench decision of this Court in the case of Durga Sree Stores v. Board of Revenue, West Bengal [1964] 15 S.T.C. 186. There the court observed that the scope of Article 227 of the Constitution of India was at least as wide as that of old Section 107 of the Government of India Act, 1915. If the decision of the Tribunal could be shown to be arbitrary and devoid of reason or if it was based on an error on a jurisdictional point then, by exercise of the power of superintendence under Article 227 of the Constitution, the High Court could and should revise the decision. If an error, whether of fact or of law, was such that the erroneous decision had resulted in the Tribunal exercising jurisdiction, not vested in it by law, or in its having failed to exercise jurisdiction vested in it by law, that would come within the scope of Article 227 of the Constitution. This error might have resulted from violation of the rules of natural justice by taking into consideration matters, which were extraneous and irrelevant, or by substituting judicial consideration by bias, based on suspicion, arising from those extraneous matters or from any other cause whatsoever, but if it had affected assumption or exercise of jurisdiction, as envisaged above, it would be a jurisdictional error for the purpose of the article. In that case, the assessee-firm assessed to sales tax under the Bengal Finance (Sales Tax) Act, 1941, had claimed deduction from its turnover, sales to "registered dealers" under Section 5(2)(a)(ii), but the Commercial Tax Officer had disallowed deduction in respect of 30 items on the ground that those transactions were suspicious and the certificates of these dealers were cancelled within some months after the transactions. The appellate authorities did not accept the reasons of the Commercial Tax Officer and had allowed the assessee's claim in respect of 21 transactions. They, however, disallowed the assessee's claim in respect of 9 transactions on the ground that the purpose of the purchase had not been specified in the relative statutory declarations. The Board of Revenue in rejecting the revision did not apply its mind to the reasons of the appellate authority but had based its decision on the ground of suspicion which weighed with the Commercial Tax Officer. It was held that the Board in proceeding on mere suspicion had committed not an error on a mere question of fact or law, but an error touching and concerning jurisdiction and the remedy provided by Section 21 was in no way alternative remedy to Article 227 of the Constitution. The facts of that case, in my opinion, are significantly different from the facts of the instant case as would be noticed later.
(3.) Reliance was placed also on the decision of the Supreme Court in the case of State of Madras v. Radio and Electricals Ltd. [1966] 18 S.T.C. 222 (S.C.). There the Supreme Court was dealing with Section 8(1) read with Section 8(3)(b) of the Central Sales Tax Act, 1956. The Supreme Court observed that reading Section 8(1) with Section 8(3)(b) of the said Act it was clear that the legislature intended to grant the benefit of concessional rates of tax under the Act to registered dealers provided that the goods sold were of the class or classes specified in the certificate of registration of the purchasing dealer and the goods were intended to be used for resale by him or for use in the manufacture of goods for sale or for use in the execution of the contracts or for packing of goods for resale. There the Supreme Court observed that indisputably the seller could have in these transactions no control over the purchaser. He had to rely upon the representations made to him. He must satisfy himself that the purchaser was a registered dealer and the goods purchased were specified in the certificate ; but his duty extended no further. If he was satisfied on a representation made to him in the manner prescribed by the rules and the representation was recorded in the certificate in form C the selling dealer was under no obligation to see to the application of the goods for the purpose for which it was represented that the goods were intended to be used. The Supreme Court also observed at page 234 of the Reports that if the purchasing dealer held a valid certificate specifying the goods which would be purchased and furnished the required declaration to the selling dealer, the selling dealer became on production of the certificate entitled to the benefit of Section 8(1) of the Central Sales Tax Act, 1956. But the Supreme Court cautioned that it was of course open to the sales tax authority to satisfy himself that the goods which were purchased by the purchasing dealer under the certificate were specified in the purchasing dealer's certificate in form B. These observations were made in connection with a different contention and in a different context.;