Sudhamay Basu, J. - (1.) This Rule concerns assessment of the firm M/s. G.S. Brothers, a partnership firm having its registered office at 226, Rash Behari Avenue, Calcutta-19 with regard to the period of 4 quarters ending December 1965, 4 quarters ending December, 1966, 4 quarters ending December 1967 and 4 quarters ending December 1969 under the provisions of West Bengal Finance (Sales Tax) Act, 1941. The problem in issue stems from the submissions of revised returns by the petitioner in respect of sales tax for the aforesaid periods. The petitioner's case is that it had erroneously submitted returns showing amounts received on account of hire-purchase agreement as amounts of sale and had paid sales tax in advance on the basis of such hire-purchase agreements, although such agreements did not mature as sales. As the petitioners had paid the sales tax by mistake in respect of the hire-purchase agreements it sought to recover the same but did not succeed.
(2.) The petitioner deals in various types of Radios, Radiograms, Fans, Refrigerators, Records, Record-players and Electrical appliances. It enters into hire-purchase agreements with several parties with intention to sell the articles according to the terms and conditions of the agreement. The agreement, of which specimen copies are annexed to the petition, reveals that the hirer is to pay a stipulated sum on the execution of the agreement as an initial sum by way of hire after which the hirer is to pay a stipulated sum by way of rent as per schedule of the agreements at the end of which on payment of Re. 1/- the transaction ripened into a sale and the subject of hire became the property of the hirer. No sale is effected until an option is exercised by the hirer and the terms of the agreement is fulfilled. In respect of the assessment for the 4 quarters ending December, 1965 for which the petitioner filed quarterly returns within time a notice was issued in form VI under Ss. II and 14(1) of the West Bengal Finance (Sales Tax) Act directing the petitioner to produce relevant accounts and documents. By a letter dated 23rd July 1969 the petitioner, inter alia, pointed out mistakes in having submitted the returns showing amounts on account of hire-purchase agreement as amounts of sale. It is alleged in the petition that on the 25th of July, 1969 the Commercial Tax Officer declined to decide the question of liability to hire-purchase transactions and threatened the petitioner by saying that if the petitioner agitated and pressed the question the issue of declaration forms would be stopped to the petitioner. The said Commercial Tax Officer, one S.K. Chakraborty who is respondent No. 1 made assessment determining the gross turnover at Rs. 12,11,630.61 and the taxable turnover was estimated at Rs. 11,02,718.46. On the 25th July, 1969 the petitioner made an appeal before the Assistant Commissioner which was allowed on the 18th of February, 1970 by setting aside the assessment and directing the Commercial Tax Officer to make fresh assessment after affording opportunity to the petitioner of being heard.
(3.) Meanwhile, with regard to the 4 quarters ending December, 1966, the petitioner had similarly, by a letter dated 17th of December, 1969 filed a revised return and claimed depreciated value of articles lent on hire-purchase at 50% and another return was filed before the regular assessment was made. It is alleged that at the time of assessment the same Commercial Tax Officer was shown the order of the Assistant Commissioner setting aside the earlier assessment but no heed was paid to the same. While seemingly professing not to tax hire-purchase transaction on the ground that the dealer did not produce a statement of such transactions, even though registers and other books were before him, the officer, according to the petitioner, arbitrarily made similar assessment as in the previous case. On appeal the Assistant Commissioner by a letter dated 2nd of December, 1971 set aside the appeal and remanded the case once again to the Commercial Tax Officer with a direction to pass fresh orders in accordance with law. Both the Appellate authorities accepted the principle that hire-purchase transactions were not liable to sales tax and orders of remand were passed on the aforesaid principle directing the Commercial Tax Officer to scrutinise the matter and decide accordingly.;