HURDATROY JUTE MILLS PRIVATE LTD Vs. SUPERINTENDENT OF COMMERCIAL TAXES

JUDGEMENT

(1.) Hurdatroy Jute Mills Private Limited (petitioner No. 1) is a private limited company registered under the Indian Companies Act, 1913, and petitioners Nos. 2 and 3 are the directors of petitioner No. 1. Petitioner No. 1 has a factory at Katihar in the district of Purnea which manufactures jute products like hessians, twines, gunny bags, etc. Petitioner No. 1 is registered under the Central Sales Tax Act, 1956 (hereinafter to be called "the Central Act") as well as under the Bihar Sales Tax Act, 1959 (hereinafter to be called "the Bihar Act"). Respondent No. 1 is the officer appointed, under the Bihar Act having jurisdiction to assess petitioner No. 1 under the Central Act. In this writ application under articles 226 and 227 of the Constitution, the petitioners have challenged the validity of the assessment order dated the 20th of January, 1969, passed by respondent No. 1 for the period 1st of April, 1968, to the 30th of November, 1968. A copy of the assessment order has been made annexure 1 to the application.

(2.) It appears that the petitioners filed monthly returns showing Rs. 1,00,75,507.99 as gross turnover. Respondent No. 1 on examination of the books of account of petitioner No. 1 accepted that gross turnover and proceeded to determine the tax on the basis of that turnover. Petitioner No. 1 had claimed sales of Rs. 23,89,000 and odd outside the State of Bihar through arhat and had produced sale notes from the commission agents residing outside the State of Bihar. The claim of petitioner No. 1 was allowed. Petitioner No. 1 had further claimed a deduction on account of sales inside the State of Bihar for Rs. 3,00,000 and odd. That claim was also allowed by respondent No. 1. Deducting the two amounts aforesaid, the balance taxable turnover under the Central Act was determined at Rs. 73,53,649.16". It appears that petitioner No. 1 had shown total sales in the course of inter-State trade and commerce to the registered dealers and Government departments of the various States but it had filed declarations in forms 'C and 'D' only for Rs. 53,18,465.41. As the declaration in respect of Rs. 3,324 in 'C form did not carry the requisite certificate by the purchasing dealers, the declaration for that amount was disallowed and petitioner No. 1 was made liable to pay tax at the rate of 10 per cent, on account of such sales. Finally, respondent No. 1 assessed petitioner No. 1 on the turnover of Rs. 53,15,141.41 at the rate of 3 per cent, and on the balance turnover of Rs. 20,38,507.75 at the rate of 10 per cent. The total tax calculated on that basis was assessed at Rs. 3,63,305.01. Respondent No. 1 further took the view that petitioner No. 1 is liable to pay penalty at the maximum rate of Rs. 5 under Section 14(4) of the Bihar Act for the delay in filing of the returns for 46 days and also penalty at the maximum rate of Rs. 5 under Section 20(4) of the Bihar Act for the delay in making payment of the tax for 1182 days amounting to Rs. 6,140. He, however, deducted out of that amount a sum of Rs. 2,655 on the ground that the assessee had already been penalised for such non-submission of returns. He imposed only the balance amount of penalty at Rs. 3,485 under Sections 14(4) and 20(4) of the Bihar Act. Thus, according to the assessment order (annexure 1), the total demand of tax and penalty which was made against petitioner No. 1 was for Rs. 3,66,790.01. The petitioners did not file any appeal against the order of assessment but filed the present application on the 6th of February, 1969, challenging the validity of the order of assessment.

(3.) Before dealing with the contentions, which have been raised by Mr. Asok Kumar Sen, learned counsel appearing for the petitioners, in support of this application, I would refer to the relevant provisions of the Central Act and the Bihar Act. Section 6 of the Central Act is the charging section. Sub-section (1) of Section 6, which is relevant for our purpose, reads as follows :