- (1.) THE petitioner in this case is Messrs. Bhartia Electric Steel Co., Ltd. It carries on the business of manufacturing steel castings, ingots, bars, rounds, flats and squares and selling the same after such manufacture. The petitioner is a registered dealer under section 7 of the Bengal Finance (Sales Tax) Act, 1941 (Bengal Act VI of 1941) (hereinafter referred to as the 'Act'). Under section 7 of the Act, no dealer, while being liable to pay tax under section 4 of the Act, can carry on business unless he has been registered under the Act, and possesses a registration certificate. That is to say, a dealer whose turnover exceeds the taxable quantum and who has thus become liable to pay tax under the Act, must get himself registered and possess a registration certificate. The turnover of this particular company admittedly exceeds the taxation quantum and therefore it has to get itself registered. The petitioner company made application in the prescribed form. The application for registration for the year ending 31st December, 1940, was made on 4th September, 1941. The application was made by Nandalal Bhartia, one of the directors of the company, stating that the business was mainly wholesale manufacturing and partly retail. It was mentioned that the gross turnover during the year ending 31st December, 1940, was Rs. 22,00,000. It was then stated as follows :- "Following classes of goods are ordinarily purchased by us (a) For purpose of manufacture : Iron and steel, scrap, boring, hardware, metals, stationery, mill stores, ingots and billets, mill stores, oils, tools, machinery accessories, spare parts, chemicals, bricks, building materials, sand, coal."
(2.) IT was further stated that the company did not purchase anything for resale. Finally, it was stated that the company manufactured for sale the following class of goods : "Steel castings, ingots, bars, rounds, flats, squares etc." This application was produced at the hearing and has been marked as Exhibit 1. The certificate was granted by the Commercial Tax Officer, Beadon Street, on 27th September, 1941, in Form IIB as prescribed by the rules. This certificate has been produced at the hearing and has been marked Exhibit A. The certificate inter alia contains the following statement :- "Sales of the following goods to this dealer will be free of tax - (a) For purposes of manufacture, Iron, steel, scraps, borings, hardware, metals, stationery, mill stores, ingots and billets, oils, tools, sand and coal, and (1) any other raw materials .. -- | Certified by the purchasing | dealer to be required (2) Plant, machinery, spare parts, | for use in any process in accessories and consumable | the manufacture of steel stores .... | castings, ingots, bars, | rounds, flats, squares." (3) Building or plumbing materials | or fixtures required for | construction, fitting out | or repair of any building. -- | So far as goods for resale are concerned, the certificate was originally endorsed as "Nil" but subsequently it was amended by adding piecegoods. Similar certificates continued to be issued for succeeding years. The certificates dated 14th October, 1941, and 19th May, 1954, have been produced. These certificates have been collectively marked as Exhibit A. On 13th December, 1954, the petitioner made an application to the Commercial Tax Officer, Beadon Street, District II Calcutta, for inserting tea, ghee, spices, fuel, utensils and cutlery in the said certificates for exemption of sales tax, alleging that they were used for manufacture of sweetmeats, tea, foodstuffs and meals in the canteen of the factory. On the same day the respondent Commercial Tax Officer wrote to the petitioner asking it to send its registered certificate by 16th December, 1954. On 18th December, 1954, the petitioner replied by saying that the registration certificate had already been sent. On 23rd December, 1954, the respondent Commercial Tax Officer sent a memorandum to the petitioner a copy whereof is annexed to the petition at page 13. It is in the following terms :- "Re. Scrutinisation of the registered certificate. It is proposed to delete some of the items from your registration certificate. You are therefore requested to appear before the undersigned on 30th December, 1954, at 11-30 a.m. to produce or cause to be produced any objection to such deletion. Specific items will be mentioned at the time of hearing."
(3.) ON 30th December, 1954, the petitioner wrote back to the Commercial Tax Officer a letter, copy whereof is set out at page 15 of annexure B to the petition. The letter stated that it was not possible to show cause against the deletion of items from the registration certificate unless particulars of the specific items proposed to be deleted were stated. On 4th January, 1955, the Commercial Tax Officer replied to this letter (page 17) inter alia stating as follows :- "Dear Sir, With reference to you Advocate's letter dated 30th December, 1954, I beg to inform you that the scope of exemption under section 5(2)(a)(ii) of the Bengal Finance (Sales Tax) Act in the case of manufactures has been restricted by the Government to admit only those goods which are actually used in the manufacture of goods for sale. It has accordingly been decided to extend exemption under section 5(2)(a)(ii) in the case of manufactures to the following classes of goods which should be specified in the certificate of registration as being intended for use in the manufacture of goods for sales. (a) Raw materials, and articles which are components or constituents of the finished product. (b) Consumable stores which are used in the process of manufacture, e.g., fuel, lubricating oil, chemicals, provided that they are actually used in the process of manufacture, or are required for use in machines employed in a manufacturing process. (c) Plant and machinery used in turning out the finished product. (d) Spare parts and replacement for the plant and machinery indicated in (c) above. In accordance with the above decision, your registration certificate is proposed to be amended to show as under : 1. Raw materials. 2. Plant, machinery, spare parts and accessories. 3. Consumable stores, viz., sand, coal, tea, ghee. Provided that all goods for which exemption from payment of sales tax is claimed are intended for use in the actual process of manufacture of the goods named below :- (i) Steel castings, ingots, bars, rounds, flats, squares; (ii) Sweetmeats, tea, for canteen at the factory. Hoping your confirmation in respect of the above matter by 10th January, 1955." ;