Skip to content


Madanlal Khaitan Vs. the Commercial Tax Officer and ors. - Court Judgment

LegalCrystal Citation
Subject Excise ;Sales Tax
CourtKolkata High Court
Decided On
Case Number Civil Revision Case No. 447 (W) of 1967
Judge
Reported in[1972]29STC625(Cal)
AppellantMadanlal Khaitan
RespondentThe Commercial Tax Officer and ors.
Appellant Advocate Saumen Kumar Ghose and ; Badal Chandra Chakraborty, Advs.
Respondent Advocate P.K. Sengupta and ;Samarendra Nath Dutt, Advs.
Disposition Petition allowed
Cases ReferredG. C. Panda v. Commercial Tax Officer
Excerpt:
- anil k. sen, j. 1. the question that arises for consideration in this rule is as to whether sugar candy is exempted from the operation of the west bengal sales tax act, 1954 (west bengal act 4 of 1954) (hereinafter referred to as the said sales tax act, 1954) by virtue of the notification dated 3rd march, 1958, issued under section 26 of the said sales tax act, 1954, by the state government and secondly whether such sugar candy comes within the definition of any of the notified commodities taxable under the said sales tax act, 1954, in the notification dated 6th february, 1967,2. in order to decide the aforesaid issues it would be necessary to refer to the changes in the relevant statutory provisions and the notifications issued thereunder from time to time as also to certain undisputed.....
Judgment:

Anil K. Sen, J.

1. The question that arises for consideration in this rule is as to whether sugar candy is exempted from the operation of the West Bengal Sales Tax Act, 1954 (West Bengal Act 4 of 1954) (hereinafter referred to as the said Sales Tax Act, 1954) by virtue of the notification dated 3rd March, 1958, issued under Section 26 of the said Sales Tax Act, 1954, by the State Government and secondly whether such sugar candy comes within the definition of any of the notified commodities taxable under the said Sales Tax Act, 1954, in the notification dated 6th February, 1967,

2. In order to decide the aforesaid issues it would be necessary to refer to the changes in the relevant statutory provisions and the notifications issued thereunder from time to time as also to certain undisputed facts. On 1st July, 1941, the Bengal Finance (Sales Tax) Act, 1941 (Bengal Act6 of 1941) (hereinafter referred to as the Sales Tax Act, 1941) came into effect This Sales Tax Act of 1941 imposed incidence of tax on sale of goods but on the provisions of Section 6 read with entry No. 8, Schedule I of this Act 'sugar' was exempted from the operation of this statute until the Schedule was amended by omission of the term 'sugar' by Section 13(a) of the Bengal Finance (Sales Tax) (Second Amendment) Act, 1955 (West Bengal Act 22 of 1955). On such amendment with effect from 25th September, 1955, sugar came under the incidence of the Sales Tax Act of 1941. It was so done obviously to bring it within the purview of the Sales Tax Act of 1954 by a notification issued under the provisions of Section 25 of the said Sales Tax Act of 1954. The said notification was issued on the day following, that is, 26th September, 1955, and as a result of the aforesaid amendment and the notification 'sugar' came to be taxable under the Sales Tax Act of 1954. In the background of this position on 24th December, 1957, a Central Act known as the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (Act 58 of 1957) (hereinafter referred to as the said Additional Duties Act, 1957), came into force. By virtue of the provisions of Section 3 of this Additional Duties Act, 1957, excise at the rate specified in the First Schedule thereto was imposed on sugar. The Government of West Bengal in order to share the distribution of additional duties on sugar in terms of the provisions of the Second Schedule thereto issued a notification dated 3rd March, 1958, referred to hereinbefore. It is necessary to set out this notification as we shall have to find out the true scope and import of this notification.

NOTIFICATION

No. 506 F. T.-3rd March, 1958-Whereas the Governor is of opinion that it would be in the public interest so to do

Now, therefore, in exercise of the power conferred by Section 26 of the West Bengal Sales Tax Act, 1954 (West Bengal Act 4 of 1954), hereinafter referred to as the said Act, the Governor is pleased hereby to exempt from the operation of the said Act with effect from the 14th December, 1957, sugar, being a notified commodity within the meaning of Clause (i) of that section, subject to the condition that in respect of sugar which had been sold before the commencement of the West Bengal Sales Tax (Amendment) Ordinance, 1958, and also in respect of sugar on which no additional duties of excise have been levied under the Additional Duties of Excise (Goods of Special Importance) Act, 1957, the dealer claiming such exemption shall make, to the satisfaction of the prescribed authority referred to in Sub-section (1) of Section 3 of the said Act, a lump payment on account of sales tax in respect of such sugar.

By order of the Governor,

B. Dasgupta

Secy, to the Govt. of West Bengal.

3. It is not in dispute that on the basis of the aforesaid notification dated 3rd March, 1958, sugar was exempted from the incidence of the Sales Tax Act, 1954. In the meantime with effect from 29th April, 1961, sugar was also declared to be one of the goods of special importance in inter-State trade and commerce under Section 14 of the Central Sales Tax Act, 1956 (Act 74 of 1956). On such declaration Section 15 of the Central Sales Tax Act, 1956, brought in the consequential restriction on the right of a State to impose a tax on the sale or purchase of sugar. While this position was continuing, the Government of West Bengal on 6th February, 1967, issued two notifications-one under Section 25 of the Sales Tax Act, 1954, specifying certain commodities to be taxable under the Sales Tax Act, 1954, with effect from 1st March, 1967, and the other under Section 4 of the Sales Tax Act, 1954, specifying the rate of tax. Commodities in this notification are 'all varieties of lozenges, including any item of lozenges made or processed in pan or cooker ; hard-boiled sugar confectionery, toffees, caramels, chocolates, chocolate bars with brand names (e.g., Cadbury's chocolate, Sathe's chocolate) and without brand names, any gelatine product known as cough lozenges or jujubes and sweet gums such as chewing gums.'

4. The present dispute arose on the issue of the aforesaid notification. The petitioner carries on the business of manufacturing sugar candy at Siliguri. For the said manufacturing business he had to draw sugar on quotas issued by the Rationing Officer, Siliguri. On 21st February, 1967, the Commercial Tax Officer, Siliguri, issued a direction to the Rationing Officers that all varieties of lozenges and hard-boiled sugar confectioneries are notified under Section 25 of the Sales Tax Act, 1954, and no quotas of sugar to the manufacturers of such commodities should any further be issued unless they are registered under the West Bengal Sales Tax Act, 1954. Though this direction of the Commercial Tax Officer on its face is in consonance with the notification issued by the State Government under Section 25 of the Sales Tax Act, 1954, there is no dispute that a copy of the said direction was served by the Rationing Officer, Siliguri, on the petitioner's firm with a note dated 23rd February, 1967, that the petitioner should obtain necessary registration from the Commercial Tax Officer, Siliguri, immediately by 31st March, 1967, if not already obtained. It is also not disputed that the Rationing Officer, Siliguri, insisted upon the petitioner's obtaining registration as a dealer on pain of suspending the quotas of sugar in default and in such circumstances, on 1st March, 1967, the petitioner was coerced to obtain registration as a dealer under the Sales Tax Act, 1954. Simultaneously, the Commercial Tax Officer treating sugar candy to be one of the goods declared under Section 25 of the Sales Tax Act, 1954, started an assessment proceeding. It was started under Section 11(2) of the Sales Tax Act, 1941, in respect of the period from 30th November, 1960, up to 31st March, 1966. It was so started on the reason that sugar candy being one of the commodities declared taxable under the Sales Tax Act, 1954, with effect from 1st March, 1967, must necessarily on the provisions of Section 25 be deemed to be taxable for the previous period under the Sales Tax Act of 1941. In such assessment proceeding, he assessed a sum of Rs. 37,504.70 as the tax payable by the petitioner up to the period ending with the year 1966. The petitioner, however, protested and objected on the ground that sugar candy is exempted from the operation of the Sales Tax Act, 1954, on the notification dated 3rd March, 1958, referred to hereinbefore and, in any event, it does not come within the meaning of any of the commodities notified under Section 25 of the Sales Tax Act, 1954, dated 6th February, 1967. Such objection and protest were of no consequence and as the respondents continued to impose the tax obligations on the provisions of the two Sales Tax Acts above referred to on sugar candy, the petitioner moved this court with the above writ petition. His prayer is for a writ in the nature of mandamus or certiorari setting aside all proceedings, orders, notices for assessing the petitioner to sales tax under either of the two Sales Tax Acts of West Bengal and also commanding the respondents to forbear from assessing the petitioner's sugar candy business for the purpose of sales tax under either of the Acts above referred to. The petitioner has also prayed for a declaration that sugar candy is not assessable to sales tax under either of the two Sales Tax Acts or under the notification dated 6th February, 1967, and also for a writ in the nature of prohibition prohibiting the respondents from assessing the petitioner to sales tax in respect of sugar candy.

5. The rule is being contested by the respondents and two affidavits have been filed-one by the Commercial Tax Officer and the other by the Rationing Officer. A supplementary affidavit has been filed by the Commercial Tax Officer in terms of this court's order dated 17th January, 1972. I shall refer to the relevant statements made in this affidavit hereinafter while considering the material issues but broadly the facts leading to the present writ petition are not in dispute.

6. Mr. Ghose, appearing for the petitioner, has raised three points. In the first place, he contends that the term 'sugar' in the notification dated 3rd March, 1958, under Section 26 of the Sales Tax Act of 1954 includes within it sugar candy so that with effect from 14th December, 1957, sugar candy is no longer assessable to sales tax under the State Acts; steps taken by the respondents in the present case to impose sales tax under the State laws are inconsistent with and contrary to the said notification and as such, ultra vires the powers of the respondents. Mr. Ghose next contends that sugar does not come within the meaning of any of the commodities notified under Section 25 of the Sales Tax Act of 1954 under the notification dated 6th Feburary, 1967, and as such, the respondents have no authority to impose any sales tax under the provisions of the Sales Tax Act of 1954.

7. Thirdly, Mr. Ghose contends that assuming for a moment that sugar candy had been subjected to the incidence of the Sales Tax Act, 1954, by the notification under Section 25 dated 6th February, 1967, as aforesaid, even then the other notification dated 6th February, 1967, under Section 4 thereof in so far as it authorises imposition of sales tax at 5 per cent, on sugar candy, is ultra vires the powers of the State Government in view of the specific limitation laid down by Section 15 of the Central Sales Tax Act.

8. Mr. P. K. Sengupta, appearing for the State, has contested each of the points raised by Mr. Ghose and has further taken a preliminary objection that no cause of action has arisen for the present writ petition.

9. Before dealing with the points raised by Mr. Ghose, I should first dispose of the preliminary point raised by Mr. Sengupta. On the facts of the present case, I fail to find any merit in this objection. On the issue of the notification dated 6th February, 1967, under Section 25 of the Sales Tax Act, 1954, the Commercial Tax Officer, Siliguri, issued a direction on 21st February, 1967, to the Rationing Officer directing him to suspend the quota of sugar to persons manufacturing commodities notified. The Rationing Officer taking the view that sugar candy is one of commodities so notified by the notification dated 6th February, 1967, called upon the petitioner to have himself registered with the Commercial Tax Officer failing which the consequences as directed by the Commercial Tax Officer will follow. Therefore, clearly between the Rationing Officer and the Commercial Tax Officer, it was taken as an accepted position that on the said notification sugar candy would be liable to sales tax under the provisions of the Sales Tax Act of 1954. The matter did not rest there. The Commercial Tax Officer himself assessed the petitioner to sales tax under the Sales Tax Act of 1941 for the period prior to 1967 evidently on the view that when sugar candy was made liable to taxation under the Sales Tax Act, 1954, from 1967 by virtue of the notification dated 6th February, 1967, for the period previous thereto such sugar candy must, necessarily be liable to sales tax under the Sales Tax Act of 1941. When the petitioner is contending that neither of the two Sales Tax Acts authorises imposition of any sales tax on sugar candy, the aforesaid acts on the part of the respondents clearly furnish a cause of action for a writ petition as in the present case. In this view, the preliminary objection raised by Mr. Sengupta is overruled.

10. The most important point for consideration in this case is the first point raised by Mr. Ghose. Section 26 of the Sales Tax Act, 1954, provides as follows:

If the State Government is at any time of opinion that it would be in the public interest so to do, it may, by notification in the Official Gazette, and from such date and subject to such terms and conditions as may be specified in such notification, exempt from the operation of this Act-

(i) any notified commodity in respect of which duties of excise are leviable under Sub-section (1) of Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 ;

(ii) ...

11. It should be noted that this Section 26 was incorporated by the West Bengal Sales Tax (Amendment) Act, 1958, just after the enforcement of the said Additional Duties Act, 1957. On incorporation of this Section 26, the notification dated 3rd March, 1958, was issued thereunder by the State Government exempting sugar from the operation of the Sales Tax Act, 1954. The difficulty, however, arises with the meaning and import of the term 'sugar' used in this notification and the controversy between the parties centres round the question whether the term 'sugar' in this notification includes sugar candy or not.

12. The term 'sugar' has not been defined in either of the two Sales Tax Acts of the State of West Bengal. The notification dated 3rd March, 1958, also does not define or explain the term 'sugar' though there are certain materials in the notification which may assist us to interpret the term 'sugar' as used therein. Section 2(c) of the Additional Duties Act, 1957, defines the term 'sugar' by incorporating the definition of the said term as specified by the relevant entry in the First Schedule to the Central Excises and Salt Act, 1944. Similar is the position with the Central Sales Tax Act. Section 14 thereof incorporates the same definition. The relevant entry of the First Schedule to the Central Excises and Salt Act, 1944, is the present entry No. 1 which corresponds to the earlier entry No. 8. The relevant extract of the said entry is set out hereunder :

(1) Sugar produced in a factory ordinarily using power in the course of production of sugar. 'Sugar' means any form of sugar in which the sucrose content, if expressed at a percentage of the material dried to constant weight at 105 centigrade, would be more than ninety. * * *

13. On the meaning ascribed to the term by this entry it is not restricted to mean sugar in its nascent state or sugar as is known in ordinary commerce ; it includes sugar in any form so that so long as the basic material remains the same and its sucrose content is ninety per cent., it would be sugar notwithstanding the fact that it may have undergone a change in its form resulting in a change in its nomenclature in ordinary commerce. Reference may be made to the decision of the Supreme Court in the case of State of Gujarat v. Sakarwala Bros. [1967] 19 S.T.C. 24 (S.C.). In this case, patasa, harda and alchidana were held to fall within the above definition of sugar. Sugar candy also has been held to fall within the above definition in the case of Abdul Malik & Co. v. Commercial Tax Officer [1963] 14 S.T.C. 214 and Vasantha & Co. v. State of Madras [1963] 14 S.T.C. 696. In my view, therefore, if it be established that in sugar candy the basic material remains the same and its sucrose content remains ninety percent., it would still be sugar within the meaning of the Central Excises and Salt Act, 1944. It is nothing but sugar in a different form.

14. In paragraph 2 of the writ petition, the petitioner has set out the process in which the sugar candy is being manufactured by him. He has further categorically stated that sugar candy so produced is nothing but refined sugar in another form containing more than ninety per cent. of sucrose in it. The statement is not denied by the Commercial Tax Officer. The Rationing Officer in paragraph 8 of his affidavit no doubt has stated that sugar candy is prepared from sugar by adding other materials to and on operation of a process of manufacture. This statement is, however, somewhat misleading. That sugar undergoes a process to become sugar candy cannot and is not disputed nor undergoing such process itself would take it out of the meaning ascribed by the Central Excises and Salt Act, 1944. Similarly, in the process of manufacture and particularly for refining it some other materials or chemicals may be used but it is not the case of the Rationing Officer that by the use of such other material, there is any change in the basic material. So, I must accept the case of the petitioner that the sugar candy manufactured by him in the process set out in paragraph 2 would be sugar within the meaning of the term as defined by the said Central Excises and Salt Act, 1944, so long as its sucrose content remains more than ninety per cent.

15. Notwithstanding the above position, it would still have to be considered whether the term 'sugar' in the notification of the State Government dated 3rd March, 1958, bears the same meaning as given to it by the Central Excises and Salt Act, 1944, or not. On this point, I feel inclined to accept the contention of Mr. Ghose that though the language used in this notification is simply 'sugar' yet what was meant and intended was sugar as defined in the Central Excises and Salt Act, 1944. Mr. Sengupta may be right in his contention that in commercial market sugar may have a different connotation from sugar candy but I am unable to accept his contention that the notification dated 3rd March, 1958, should be construed with reference to such connotation as in ordinary commercial market. The notification itself gives us ample indication to show that the term 'sugar' therein is not used in the sense as contended for by Mr. Sengupta. It refers to sugar with an important qualification, viz., 'being a notified commodity within the meaning of Clause (i) of that section (section 26)'.

16. Clause (i) of Section 26 qualifies the notified commodity as one in respect of which duties of excise are leviable under Sub-section (1) of Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957. If sugar is such a commodity-as it is on the notification-it must include sugar candy as duty payable under the Additional Duties Act, 1957 is in respect of sugar which includes sugar in any form including sugar candy. The notification further specifies that in respect of sugar on which additional duties of excise under the Additional Duties Act, 1957, had not been paid, the dealer claiming exemption must make a lump payment. All these clearly establish that the term 'sugar' in the notification has been used in the same sense as it bears in the Additional Duties Act, 1957. To ascribe any other meaning to the term 'sugar' in that notification would bring in inconsistency. The same conclusion would be reached if we consider the matter from another standpoint. It is not in dispute that the notification of exemption from the operation of the Sales Tax Act, 1954, dated 3rd March, 1958, was issued when the State Government participated in the central pool of additional duties realised on sugar under the said Additional Duties Act, 1957. The Second Schedule to this Act clearly lays down that no State could participate in a party of this pool or share all the contributions therefrom if it continues to impose sales tax on sugar. The object of the said Additional Duties Act, 1957, further clearly sets out that the additional excise duty was being imposed in replacement of sales taxes levied by the Union and the States on sugar, tobacco and mill-made textiles and distribute me net proceeds to states. J neretore, it it cannot be disputed that additional duties of excise under the aforesaid Act of 1957 are being imposed on sugar including within its meaning sugar candy, the exemption granted for qualifying the State to share the distribution of such levy must also extend to include sugar candy. This court by an order dated 17th January, 1972, called upon the respondents to disclose whether additional duties are being levied on sugar candy under the provisions of the said Additional Duties Act, 1957, and whether the State is sharing all the contributions from the pool or not. In answer to this requisition, a supplementary affidavit has been filed by the Commercial Tax Officer in which true disclosure of actual facts has been avoided. It is only stated that sugar has been exempted from the West Bengal Sales Tax Act, 1954, and the same was subjected to the Additional Duties of Excise (Goods of Special Importance) Act, 1957, keeping provision for realisation of sales tax on the sale of sugar on which no additional duty of excise was paid and the State of West Bengal was sharing the contribution of additional duties at the relevant time. It is further stated in this supplementary affidavit that the respondents have no knowledge whether additional duties are levied on sugar candy or not. In this affidavit, however, there is an admission that the State of West Bengal is sharing the contributions from the pool of additional duties on sugar realised under the Act of 1957. This contribution obviously refers to contribution on all the heads set out in Article 2 of the Second Schedule of the Act of 1957. Therefore, when on the provisions of this Act there can be no doubt that additional duties of excise is being levied on sugar in any form including sugar candy and when that is within the scope of incidence of the Act, the State of West Bengal must be sharing the duties so imposed. This, the State of West Bengal could not have done except by exempting sugar candy from the incidence of sales tax. Therefore, the natural conclusion would follow that the term 'sugar' in the notification dated 3rd March, 1958, means and includes sugar in any form including therein sugar candy as defined by the Central Excises and Salt Act, 1944. Such was the view taken of a similar notification issued by the State of Madras in the case of Vasantha and Co. v. State of Madras [1963] 14 S.T.C. 696 as also by the Mysore High Court in the case of Abdul Malik and Co. v. Commercial Tax Officer [1963] 14 S.T.C. 214. Mr. Ghose rightly relies on the Supreme Court decision in the case of State of Gujarat v. Sakarwala Brothers [1967] 19 S.T.C. 24 (S.C.). In the case before the Supreme Court a question had arisen as to whether tax was payable on the sales of patasa, sukkar (sugar candy), bura sugar, harda and alchidana in view of the exemption granted by entry No. 47 of Schedule A to the Bombay Sales Tax Act, 1959. The Deputy Commissioner of Sales Tax held that bura sugar would come within the exemption but not the other items. The Commissioner of Sales Tax revised the order of the Deputy Commissioner and held that sukkar (sugar candy) being sugar in one form was exempted from tax liability under the said entry No. 47 but not the other items. Then the matter went over to the Gujarat High Court for consideration whether patasa, harda and alchidana would come within the exemption as sugar in some form. The High Court accepted the contention that these articles also come within the definition of the term 'sugar', as in entry No. 47 and this view of the High Court was affirmed by the Supreme Court. This being the position, the decision of the Supreme Court relied on by Mr. Ghose well supports his contention. Mr. Sengupta, however, wanted to distinguish this decision of the Supreme Court on the ground that entry No. 47 of Schedule A to the Bombay Sales Tax Act, 1959, denned sugar by incorporating the definition as in the First Schedule to the Central Excises and Salt Act, 1944. But according to Mr. Sengupta there is no such definition in the West Bengal Act or in the notification. On my findings made hereinbefore, absence of incorporation of such definition is of no consequence because under Section 26 read with the notification when exemption is being granted to sugar as a commodity subject to additional duties under the Central Act of 1957, sugar must necessarily mean sugar as defined in the Central Act of 1957. That apart, as pointed out earlier, unless sugar including sugar in any form is exempted from sales tax, the State Government could not have shared all the contributions from the pool of additional duties realised under the Additional Duties Act, 1957. Taking all these circumstances into consideration, the absence of any definition of sugar in the West Bengal Act or in the notification in question makes no difference in my view.

17. Incidentally Mr. Sengupta also contended that the definition of sugar, as set out in the Schedule to the Central Excises and Salt Act, must mean sugar produced in a factory ordinarily using power in the course of production of sugar so that in the absence of any evidence whether sugar or sugar candy in the present case was so produced in a factory or not, the petitioner is not entitled to any relief. This contention of Mr. Sengupta does not appeal to me. He proceeds on the basis as if the entire entry constitutes the definition but that is not so. The definition has been set out separately by providing that:

Sugar means any form of sugar in which the sucrose content, if expressed at a percentage of the material dried to constant weight at 105 centigrade would be more than ninety.

18. This is only the definition clause which has been incorporated into the Additional Duties Act, 1957, and the Central, Sales Tax Act. Incidentally Mr. Sengupta strongly relied on the decision of this court in the case of G. C. Panda v. Commercial Tax Officer (1963) 67 C.W.N. 1102 in contending that notwithstanding the fact that sugar and sugar candy are basically the same material, yet commercially they are different and what was exempted by the notification dated 3rd March, 1958, was sugar as is known in ordinary commerce and not sugar candy. No doubt, the decision relied on by him well supports his contention but I am unable to accept the same on the reasons given hereinbefore and particlurly on the authority of the Supreme Court decision in the case of Sakarwala Bros. [1967] 19 S.T.C. 24 (S.C.)

19. On my conclusions as above, I must uphold the contention of Mr. Ghose that on the notification dated 3rd March, 1958, under Section 26 of the Sales Tax Act, 1954, sugar including sugar candy is exempted from the operation of the Sales Tax Act, 1954. Necessary consequence would be that it is also exempted from the Sales Tax Act, 1941, as when it was initially brought under the purview of the Sales Tax Act, 1954, under Section 25 it was excluded from the Sales Tax Act, 1941.

20. The second point raised by Mr. Ghose is also of some substance. There is no dispute that attempt to impose sales tax on sugar candy was made on the basis of the impugned notification dated 6th February, 1967, as made under Section 25 of the Sales Tax Act, 1954. None of the commodities specified in this notification would cover sugar candy except if at all the commodities specified as hard-boiled sugar confectioneries. According to the respondents, sugar candy answers this description. The term 'confectionery', however, means 'a collective name for sweetmeats or confections'. The term 'confection' again means 'making by mixture of ingredients'. Such is the meaning attributed to the terms in the Shorter Oxford English Dictionary. So, in my view, in order to be hard-boiled sugar confectionery, there must be more than one ingredient including sugar and it does not mean pure sugar in other forms. It is true that candy or sugar candy though it normally means crystallised sugar made by boiling or slow evaporation, at times or places also means or includes any confection made of or with sugar candy. Such is the meaning given by the same dictionary to the term 'candy'. Therefore, though the term 'sugar candy' may at times include sugar confectioneries, sugar candy made of pure sugar manufactured in the process set out in paragraph 2 of the writ petition does not mean sugar confectionery. It remains sugar but in a different form. In this view, I must accept the contention of Mr Ghose that sugar candy as referred to in paragraph 2 of the writ petition containing sugar only with 90 per cent, sucrose therein does not come within the term hard-boiled sugar confectionery as in either of the two notifications dated 6th February, 1967, and as such, does not become liable to the incidence of the Sales Tax Act of 1954.

21. So far as the last point raised by Mr. Ghose is concerned, it appears to me that the said point does not really arise for consideration. Section 14 of the Central Sales Tax Act declares sugar to be one of the goods of special importance in inter-State trade and as a consequence thereof the limitation of Section 15 of the said Act comes into effect. But this is only with respect to sugar as defined in the First Schedule in the Central Excises and Salt Act, 1944, and nothing else. Therefore, in order to succeed on the third point raised, Mr. Ghose must have to statisfy this court that (1) sugar candy is sugar and (2) the impugned notification dated 6th February, 1967, imposes sales tax on such sugar candy but at a rate above the one prescribed by Section 15 of the Central Sales Tax Act, 1956. But once he succeeds to show that sugar candy is sugar, he succeeds on the first point and the pommodity is totally beyond the purview of the incidence irrespective of the rate. Mr. Ghose, however, is right in his contention that if it be held that the notification dated 6th February, 1967, imposed sales tax at the rate so prescribed on any commodity which may come within the definition of sugar as defined by the Central Excises and Salt Act, 1944, then the prescribed rate of 5 per cent, infringes the prohibition imposed by Section 15 of the Central Sales Tax Act. Therefore, the third point raised by Mr. Ghose does not really arise for consideration.

22. On the conclusions as above, this application succeeds.

23. A question now arises what should be the relief to be granted to the petitioner on this writ petition. He is certainly entitled to a declaration that sugar candy manufactured by him, so long it answers the description of sugar as defined in the Additional Duties Act, 1957, and so long as the notification dated 3rd March, 1958, under Section 26 of the West Bengal Sales Tax Act, 1954, remains in force, is not liable to any taxation under either of the two Sales Tax Acts of West Bengal, viz., the Bengal Finance (Sales Tax) Act, 1941, or the West Bengal Sales Tax Act, 1954. Subject to the two conditions aforesaid, he is also entitled to have a mandate from this court on the respondents directing them not to enforce any of the aforesaid two Acts or the incidence thereunder on the sugar candy as manufactured by the petitioner and also not to enforce any order, notice or circular issued for the assessment already made for the period from 30th November, 1960, to 31st March, 1966, vide annexure 'C' to the writ petition, as the petitioner has specifically excluded such assessment from the scope of the present writ petition.

24. Let a writ in the nature of mandamus do issue accordingly with a declaration as above.

25. The rule is made absolute. The petitioner is entitled to costs-hearing fee being assessed at five gold mohurs.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //