Saikh Abdul Motaleb, Member (J) - (1.) THE Petitioner in this case is the proprietor of M/s. Everest Distributing House at 10/D/1, Ho Chi Min Sarani, Kolkata 700 071 and carrying on the business as a consignment agent of M/s. Wyeth Lederly Limited, now known as M/s. Wyeth Limited, Bombay, Maharashtra, and is a registered dealer having registration certificates under both the Central and State Acts with liability of an agent as per Explanation II of Sub -section (10) of Section 2 of the West Bengal Sales Tax Act, 1994. The Petitioner accordingly filed returns for the period of four quarters ending March 31, 2005, i.e., for the period 2004 -05 on which the Deputy Commissioner of Commercial Taxes, Corporate Division (Respondent No. 2) completed the assessment by an order dated June 26, 2007 and thereby adding back an amount of Rs. 11,54,872, treating the value of medicines returned on expiry of date and due to damage and breakage and the sum of Rs. 32,81,050 as the value of medicines supplied as free sample and treating the both as intra -State sale, to the gross turnover for the purpose of assessment and levy of tax thereon and being aggrieved by and dissatisfied with the said assessment order the Petitioner preferred an appeal before the Additional Commissioner of Commercial Taxes, West Bengal (Respondent No. 1) who, in his turn has disposed of the appeal by an order dated July 27, 2009 confirming the order of assessment and hence the present application Under Section 8 of the West Bengal Taxation Tribunal Act, 1987 is filed praying for setting aside the assessment and the appellate orders impugned and for consequential relief(s).
(2.) IT is contended in the application and submitted by Mr. Bhattacharyya, learned advocate appeared for the Petitioner that Respondent No. 1 by misconception as to the peculiarity of the trade of dealing in drugs and medicines included the amount of Rs. 10,38,542 to the gross turnover for which credit notes were issued against the sale value of the returned medicines on expiry of saleable date relating to the year 2003 -04 and also the balance sum of Rs. 1,16,320 on account of damage and breakage for non -production of relevant documents. It is further submitted that the dealer had to suffer a return of the goods of the said value sold to the wholesalers, retailers, etc., in the previous year, i.e., 2003 -04 for which he was entitled to deduct the said amount of Rs. 10,38,552 from the turnover of the assessment year 2004 -05 as per provision of Sub -section (40) of Section 2 of the Act and Rule 159 of the Rules, 1995 but Respondent No. 1 has failed to appreciate that and hence the present assessment on the amount suffers from illegality and material irregularity for treating the amount as intra -State sale. It is further submitted by Mr. Bhattacharyya that the balance sum of Rs. 1,16,320 has been so added back to the gross turnover on the ground of non -production of relevant documents for the exemption claimed but actually the Petitioner produced all relevant documents for that not only at the stage of assessment but also at the stage of appeal but both the assessing and the appellate authorities have failed to appreciate that and have erred in adding the said amount to the gross turnover which is palpably illegal and invalid. It is also contended in the application and submitted by Mr. Bhattacharyya that the Petitioner imported medicines worth Rs. 32,81,050 from the principal -company for distribution as free sample to the doctors, medical practitioners, whole -sellers, stockiest, sub -distributors, etc., etc., for sales promotion and for the purpose of building up better market and for advertisement, etc., and on proper approval forms issued by the principal -company and not for sale at all but the Respondents have failed to appreciate that and the fact that there was no provision to presume that once the goods have been imported through way -bill cannot but be disposed of only by way of sale and can never be permitted to distribute the same as free samples as is presumed in the order ignoring the special character/peculiarity of the business in medicine and hence the order on this point also suffers from illegality and material irregularity by treating the same as intra -State sale. It is also contended in the application and submitted by Mr. Bhattacharyya that as per trade practice in medicine, the drugs and medicines have a specific life period prescribed by the manufacturers within which such medicines are required to be utilized failing which those loss their utility and market value and are returned to the manufacturers for free replacement and here in this case the Petitioner received return of such expired medicines from the sub -dealers, wholesalers, retailers, etc., for replacement and hence the sale price of such returned medicines claimed to be deducted from the gross turnover but the Respondents, being failed to appreciate that special feature of the medicinal business, have illegally added the said value to the gross turnover as intra -State sale and thereby have committed a gross material irregularity to interfere with by this Tribunal and on the basis of the above Mr. Bhattacharyya prays for setting aside the orders impugned directing deduction of the said amounts from the gross turnover as added back and thereby not to levy any tax thereon as has been imposed in the assessment impugned. In support of his above contentions and submissions Mr. Bhattacharyya has cited/referred the decision of this Tribunal taken in an another case of the Petitioner for the period 2002 -03 being Case No. RN -650 of 2009 and prays for a similar finding that the applicant is entitled to get deduction/exemption of the sale price of the free replacement medicines and also the value of the medicines distributed as free sample. In reply, Mr. B. Majumdar, learned State Representative, has placed sole reliance on the reasons assigned in both the order of assessment and appellate order impugned in this case and submits that both are based on explicit reasons and consideration of the statutory provisions with reference to the facts claimed by the Petitioner and hence, none of the orders suffers from any illegality and/or material irregularity whatsoever and therefore prays for dismissal of the application with costs.
(3.) WE have gone through and considered the contents of the application and the documents annexed thereto together with the orders impugned and the submissions made for both the sides thereon. Undisputedly and also evidently by practice the business of medicinal goods has some peculiarity and/or peculiar aspects than that of other business. There cannot be any denial that the drugs and medicines have a specific life period prescribed by the manufacturing companies within which those are required to be utilized as otherwise those become useless as well as valueless. There is also no denial of the fact that in medicinal business all dealers right from retailers to stockiest are required to check periodically their stocks to find out the medicines going to be expired and for return of the same to the distributors and/or manufacturers as the case may be claiming replacement of medicine of equal value, as refund of the value paid for such medicines is not a practice in the business but for that a certificate from the Chartered Accountant is required to be produced (Rule 159). There is no and cannot be also denial of the fact that different medicines has its different period of life, i.e., period of expiry and all the above established facts in medicinal business are required to be considered at the time of assessment etc.;