- (1.) (Civil Rule No. 3560 of 1953.) This is an application under Article 226 of the Constitution for a writ in the nature of mandamus directing the opposite parties to rescind or withdraw three notices issued under the provisions of the Bengal Finance (Sales Tax) Act calling upon the petitioner to produce certain books of accounts and documents and also calling upon the petitioner to show cause why penalty should not be imposed on him under section 11(2) of the said Act and why the petitioner should not be prosecuted for not getting his firm registered in accordance with the provisions of the Act.
(2.) THE case of the petitioner is that the petitioner is one of the Aratdars at the Howrah betel leaf market. It is alleged that the pan or betel leaf cultivators of Howrah and Hooghly bring their produce to the Howrah pan-hat where these are sold to purchasers. In that market there is a class of middle-men or Aratdars who help the cultivators in the sale, by bringing the seller-growers and purchasers together, guaranteeing the price, and when the price is not paid on the spot, by advancing to to the seller-growers, the whole or part of the sale price, taking upon themselves the responsibility of collecting the money due from the purchasers and for their labours the Aratdars or middle-men charge one pice per rupee on the sale proceeds as their remuneration. In April, 1951, a notice was issued upon the petitioner and several other pan agents under section 22(1)(a) of the Bengal Finance (Sales Tax) Act for non-registration of the petitioner firm. On the 29th August, 1951, a petition was presented by the Howrah Pan Commission Agents Association stating that pan being a vegetable within the meaning of item No. 6 in the schedule appended to the Bengal Finance (Sales Tax) Act was exempted from taxation and so the notice served should be discharged. On 27th September, 1951, the Commissioner however informed the President of the Association that the petition had been rejected. On 31st October, 1951, further notices were issued by the Commercial Tax Officer requiring the petitioner and other pan-agents to produce books of accounts and necessary documents for examination and informing them that it had been held by higher Sales Tax Authorities that pan was not a vegetable under item No. 6 of the Schedule to the Sales Tax Act. The petitioner thereupon appeared before the Commercial Tax Officer and contended that pan was exempt from taxation and that the petitioner was not a dealer; but on 17th March, 1952, the Commercial Tax Officer held that the petitioner was a dealer and pan was not a vegetable and therefore was liable to taxation. On 29th April, 1952, the petitioner made a revisional application to the Commissioner of Commercial Taxes under section 20(3) of the Act against the said order of Commercial Tax Officer dated the 17th March, 1952. The said revisional application is still pending before the Commissioner of Commercial Taxes. On 13th June, 1953, the Commercial Tax Officer issued two fresh notices in Form No. VI under sections 11 and 14(2) of the Sales Tax Act and directed the petitioner to attend before the said officer on 20th July, 1953, with accounts and documents specified in the said notices. Both the said notices called upon the petitioner to show cause why penalty should not be imposed on him under section 11(2) of the Act. One of the said notices bears No. 1R-12/51/4800 and the case number is 81 of 53-54. It sought to make the petitioner liable to assessment for the period commencing from the 17th January, 1952, and ending on the 31st Chaitra 1358 B.S. The other notice bears No. 1R-12/51/4801 and it relates to case No. 85 of 53-54 and it seeks to make the petitioner liable in respect of the period commencing from 1st Baisakh 1359 B.S. and ending on 31st Chaitra, 1359 B.S. On 18th June, 1953, another notice bearing No. 1R-12/51/4799 was issued by the Commercial Tax Officer calling upon the petitioner to show cause under section 22(1)(a) of the Act as to why the petitioner should not be prosecuted for not getting his firm registered in time. On 20th July, 1953, the petitioner produced accounts and documents before the Commercial Tax Officer and renewed his objection as to liability to pay tax on the ground that pan was an exempted article and that the petitioner was not a dealer. It is further alleged in paragraph 15 of the petition that the pan commission agents including the petitioner have no authority to sell the stock of pan brought by the cultivators to the market and it is the cultivator who decides whether his produce should be sold to a particular bidder and at what price. The pan agents merely bring the seller-grower and the purchaser together and accept the responsibility of realising money from the purchasers, who from their long association, and usually intimately known to them. The petitioner has in the petition challenged the legality of the notices on the ground that pan is a vegetable within the meaning of item 6 and so exempt from taxation, and that the petitioner is not liable to taxation as he is not a dealer within the meaning of section 2(c) of the Sales Tax Act.
(3.) IN the affidavit in opposition which has been filed on behalf of the opposite parties it has been stated in paragraph 3 that the petitioner is an Aratdar in the Howrah Pan Market and has a stall in the said market. The system which is followed for selling pan in the market is thus described in the said paragraph :- "The system is that the producers of pan (chasis) come with their pan at the arat of the Aratdars in the market and place their goods at the respective arats. The purchasers of pan then contract the Aratdars and make bids which when accepted by Aratdars the sale is made by the Aratdars. The purchasers however do not pay the price of pan all at once to the Aratdars who allow them to remove the goods on credit. The Aratdars them pay the price of the pan to the producers concerned deducting commission at the rate of one pice to the rupee from the price at which the pan is sold. The sales are noted in the books of the Aratdars and chalans are issued to the purchasers by the Aratdars noting the price therein and the Aratdars realise the said purchase price from the purchasers and the producers having been already paid the price, have no concern with such realisations". ;