M.N.Roy, J. - (1.) Messrs. Jugal Kishore Radhakishan, a firm registered under the Indian Partnership Act (hereinafter referred to as the said petitioner), has impeached in this rule the ultimate determination of the respondents in the matter of disallowing exemption in terms of Section 5(2)(a)(ii) of the Bengal Finance (Sales Tax) Act, 1941 (hereinafter referred to as the said Act), which appears in annexure X to the supplementary affidavit and the incorporation of the same in annexure G to the petition. The said petitioner is, admittedly, a registered dealer under the said Act having registration certificate No. C.S.-2/1649-A and on the basis thereof carries on business both as a wholesale and retail dealer in textile amongst other commodities. There is also no dispute that the said petitioner duly submitted quarterly returns in the course of its business before the sales tax authorities concerned and has also paid and is paying sales tax in terms of the requirements of law. It appears that for the fourth quarter ending with Chait Sudi 8 of the year 2013 according to Hindi Calendar, Sambat, the said petitioner submitted its return and its gross turnover amounting to Rs. 11,86,970-13-3 as taxable turnover and after all deductions claimed an exemption amounting to Rs. 34,00,220-0-0 and on that basis duly paid a sum of Rs. 2,194-3-6 as the amount of tax payable on such turnover.
(2.) By an order dated 30th September, 1964, the Commercial Tax Officer, Amratalla Charge, respondent No. 4, imposed an additional tax of Rs. 15,947-8-0, after disallowing the claims of the petitioner under Section 5(2)(a)(i) of the said Act, which claim incidentally amounted to Rs. 5,23,975-2-3 and also a claim for deductions under Section 5(2)(a)(ii), for sales to the registered dealers amounting to Rs. 5,55,210-0-0 and a further claim of deductions under Section 5(2)(a)(v) for sale to the registered dealers amounting to Rs. 52,00,674-11-9. Respondent No. 4 further imposed a penalty for a sum of Rs. 300 and also issued a notice in form VII for Rs. 13,753-5-9 after deduction of a sum of Rs. 2,194, being the amount of tax paid by the said petitioner. Being aggrieved by such determination, the said petitioner preferred an appeal before the Assistant Commissioner, Commercial Taxes, Dharmatolla Charge, respondent No. 3, on the ground, inter alia, that the decision of respondent No. 4, in disallowing the total claim under Section 5(2)(a)(ii), merely on the ground of suspicion was wrong, erroneous and arbitrary, inasmuch as it is well-settled that if the date of cancellation of registration is subsequent to the date of transaction and, as required by Rule 27A of the Rules as framed under the said Act (hereinafter referred to as the said Rules), if the declaration forms are produced in support of the claim for exemption, then it would be an obligation on the part of the Commercial Tax Officer concerned to allow such claim. It was also submitted that imposition of penalty was excessive, as most of the returns were filed in time. The said respondent No. 3, however, upheld the order of respondent No. 4 and, consequently, rejected the appeal as aforesaid holding, inter alia, that respondent No. 4 was justified in disallowing the said petitioner's claim and holding further that because of the amount of tax involved the penalty cannot be said to be unreasonable or excessive and that too when no satisfactory explanation could be furnished as to why the returns in question were not filed in time.
(3.) From that determination, a revision under Section 20(3) of the said Act, being Revision Case No. 175 of 1966-67, was preferred by the said petitioner, before the Additional Commissioner, Commercial Taxes, West Bengal, respondent No. 2, contending, inter alia, that the sales in question being duly supported by the relevant declaration forms should have been admitted as claims under Section 5(2)(a)(ii) of the said Act and it was also contended that subsequent cancellation of registration certificates of the purchasing dealers would not be a valid ground justifying disallowance of the claims and further the assessment, as has been made and is sought to be the basis, was arbitrary and excessive and, furthermore, the penalty, as imposed, was unreasonable, apart from being excessive. By an order dated 29th January, 1971, the said respondent No. 2 allowed the revision in question in part by modifying the assessment order. From a reference to the order in question, it would appear that a sum of Rs. 5,000 only out of the claim under Section 5(2)(a)(ii) of the said Act was allowed, as a result whereof, the taxable turnover was reduced from Rs. 3,56,250-11-3 to Rs. 3,35,244-0-0. It would further appear from a reference to the determination that the other findings of respondent No. 3, including the penalty, were upheld.;