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Lily Biscuit Company (P.) Ltd. Vs. State of West Bengal - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtKolkata High Court
Decided On
Case Number Appeal from Original Order No. 540 of 1965
Judge
Reported in[1975]35STC236(Cal)
AppellantLily Biscuit Company (P.) Ltd.
RespondentState of West Bengal
Appellant Advocate Abhas Chandra Das Gupta, Adv.
Respondent Advocate Bhagabati Prosad Banerjee, Adv.
DispositionAppeal dismissed
Cases ReferredGinning and Groundunt Oil Mill Contractors Co. v. State of Andhra Pradesh A.I.R.
Excerpt:
- .....he has submitted that in the certificate, the certificate-holder is described as the state of west bengal while the admitted position is that the certificate relates to a demand under the central sales tax act. he has referred to article 269(1)(g) of the constitution which gives power to the union to levy and collect taxes on sale and purchase of certified goods in the course of inter-state trade and commerce. mr. das gupta fairly conceded that he could not challenge the tax as assessed in the proceeding but he was seriously challenging its recovery. he submitted that in view of the fact that the tax was payable to the union of india the certificate was fatally defective inasmuch as it described the state of west bengal as the certificate-holder.7. it would however appear to us that.....
Judgment:

Salil Kumar Datta, J.

1. This is an appeal by the petitioner-appellant against an order of Binayak Nath Banerjee, J., dated 26th May, 1965, summarily dismissing the writ petition filed by the petitioner under Article 226(1) of the Constitution of India.

2. The petitioner was served with a notice under Section 7 of the Bengal Public Demands Recovery- Act, 1913, along with a copy of the certificate for Rs. 10,675.10 representing the tax payable under Section 6 of the Central Sales Tax Act, 1956, read with Section 11 of the Bengal Finance (Sales Tax) Act, 1941. The petitioner filed an objection challenging the validity of the certificate and denying liability ; the objection was summarily rejected by the Certificate Officer on 12th March, 1964. An appeal was taken to the Collector which was also dismissed. The petitioner thereafter filed a petition in revision before the Commissioner which also met with the same fate. The petitioner moved a revisional application therefrom before the Board of Revenue which by order dated 2nd April, 1965, dismissed the petition. The petitioner thereafter moved this court under Article 226 of the Constitution, as already stated, praying for writs quashing the order of the Board of Revenue and also forbearing the respondents from giving effect to the impugned order. Curiously enough no writ was prayed for quashing the certificate itself and the application was summarily rejected.

3. Various contentions were raised by Mr. Das Gupta in support of the appeal and as the appeal was contested by the respondents, we have heard the learned Advocates on the merits of the case. Mr. Das Gupta's primary contention centres round the form of the certificate, which, according to him, suffers from fatal irregularities. He has referred to the well-known legal proposition as set out in Herbert Broom's 'A selection of legal maxims' (Tenth Edn.) :

A remedial statute, therefore, shall be liberally construed, so as to include cases of mischief which the statute was intended to remedy: whilst, on the other hand, where the intention of the legislature is doubtful, the inclination of the court will always be against that construction which imposes a burden, tax or duty, on the subject.

4. He has also referred to the decision in Abanindra Kumar Maity v. A.K. Bishwas (1954) 58 C.W.N. 573 in which it was held that the omission to mention in the certificate the period for which the demand is due, as expressly required by column 2 of the form of the certificate, renders the certificate invalid, inasmuch as it is absolutely essential also to give the assessee a proper notice of the tax liability. It was held in that case that the Certificate Officer was required to sign the certificate in the prescribed form and any error or omission in filing the form of the certificate is fatal to the certificate and to the entire proceedings, which is therefore liable to be quashed. For a rubber-stamp signature also, the certificate was held to be invalid. He also referred to the decision in the case of Satish Chandra Bkowmick v. Union of India (1961) 65 G.W.N. 324, in which it was held again that a certificate under the Bengal Public Demands Recovery Act, 1913, which is not in the form prescribed under the rule-making powers under the Act, cannot be executed under the Act. It was held that the certificate under the relevant sections must be signed by the Certificate Officer on the day on which he files the certificate in his office and the date borne on the notice must be the date on which the certificate is signed and filed. The defect in the certificate in respect of the above matters rendered the certificate invalid. In N.C. Mukherjee v. Union of India [1964] 51 I.T.R. 366, a more liberal view was taken and it was held that if the public demands are sufficiently identified it is not necessary to state expressly the dates of commencement of the chargeable accounting periods or to mention the income-tax on the basis of which the excess profit is said to have been assessed and a mere defect in form or omission to fill up a blank will not render the certificate invalid.

5. Mr. Das Gupta submitted that if the decision in the case of N.C. Mukherjee v. Union of India [1964] 51 I.T.R 366 was intended to lay down a proposition of law, contrary to Satish Chandra's case (1961) 65 C.W.N. 324, cited above, the same should have been referred to a larger Bench as was observed by the Supreme Court in the case of Venkateswara Rice, Ginning and Groundunt Oil Mill Contractors Co. v. State of Andhra Pradesh A.I.R. 1972 S.C. 51. It may be mentioned here that by an amendment to the Public Demands Recovery Act by W. B. Act No. 11 of 1961, it was provided that notwithstanding any decision of any court and anything contrary to the Act, no certificate filed under Section 6 of the Act and no notice served under Section 7 of the Act shall be deemed to be invalid or shall be called in question merely on the ground of any defect, error or irregularity in the forms thereof. This Act was, as it appears, came into force on 28th April, 1961.

6. Mr. Das Gupta's contention is that the certificate suffers from several fatal defects. He has submitted that in the certificate, the certificate-holder is described as the State of West Bengal while the admitted position is that the certificate relates to a demand under the Central Sales Tax Act. He has referred to Article 269(1)(g) of the Constitution which gives power to the Union to levy and collect taxes on sale and purchase of certified goods in the course of inter-State trade and commerce. Mr. Das Gupta fairly conceded that he could not challenge the tax as assessed in the proceeding but he was seriously challenging its recovery. He submitted that in view of the fact that the tax was payable to the Union of India the certificate was fatally defective inasmuch as it described the State of West Bengal as the certificate-holder.

7. It would however appear to us that under Section 9(3) of the Central Sales Tax Act power has been given on behalf of the Government of India to assess, collect and enforce payment of any tax including penalty on the authorities who under the sales tax law of the State are empowered to assess, collect and enforce payment of the tax in the same manner as the goods under the General Sales Tax Act are assessed, paid and collected. For that purpose such authorities have also been given all powers they have under the general sales tax law of the State. Accordingly, the Central sales tax therefore may be assessed and collected in West Bengal in the same manner as sales tax under the Bengal Sales Tax Act is assessed and collected. The State of West Bengal, it is not disputed, is the certificate-holder in respect of recovery of Bengal sales tax. Though the State of West Bengal acts as agent of the Union of India under the provision of law, full and absolute powers have been given to the State of West Bengal itself to levy, assess and recover the amount obviously in its own name. In view of this position, we do not find that there is any irregularity or defect in the certificate in describing the State of West Bengal as the certificate-holder of the dues under the Central Sales Tax Act.

8. Mr. Das Gupta has next submitted that the certificate is under Section 4 of the Bengal Public Demands Recovery Act, which is confined to demand of arrears of land revenue, while admittedly the present demand is not an arrear of land revenue. It would appear that Rule 1A was inserted in Schedule II of the Bengal Public Demands Recovery Act after Rule 1 of the said schedule. Under Section 38, the rules of schedule II have been given the effect as if enacted in the body of the Act. Rule 1A lays down that the procedure to be followed in respect of certificate of arrears of sales tax shall be the same as those in the case of arrears of land revenue payable to the Collector. It would therefore appear by and under the same provision the arrear for sales tax has been given the status of arrears of land revenue payable to the Collector. Accordingly Section 4, which relates to public demand including land revenue payable to Collector, in our opinion, in terms applies to the recovery of sales tax and this section has been specifically mentioned in the notice itself. But for this amendment it could be contended that Section 4 would have no application to the certificate, which contention might require consideration relating to the validity of the certificate. But, in view of this amendment, it is no longer possible to argue that the certificate suffers from any defect in referring Section 4 in the body of the certificate itself.

9. Mr. Das Gupta has further submitted that the arrear of sales tax has been equated to land revenue payable to a Collector. In the certificate we do not find the name of the Collector of any particular district, but the State of West Bengal has been described as the certificate-holder, as already noted. This, in the opinion of Mr. Das Gupta, renders the certificate again fatally defective as there would be misconception in the mind of the assessee as to which Collector such amount would be payable. This argument appears to be misconceived. It would appear that the Collector is representing the State of West Bengal in so far as this demand is concerned, and if instead of mentioning the name of the Collector the real authority to whom the arrears are due is mentioned in the certificate, we do not find that thereby any irregularity is committed, which would render the certificate invalid or otherwise questionable. It may be mentioned here that in the certificate the nature of the demand has been clearly stated as being tax due under the Central Sales Tax Act and, accordingly, there is no scope for any confusion in so far as this demand is concerned. In that view of the matter, we are of the opinion that mere description of the State of West Bengal in place of the Collector of a particular district does not cause any prejudice to the petitioner and the certificate is in no way questionable on that account.

10. Mr. Das Gupta has further drawn our attention to the statutory forms of demand under the Central Sales Tax Act and the entry of penalty in the said statutory form. This entry is unnecessary, as it is submitted, such penalty under the sections of the said Act is not recoverable under the law as since held by judicial decision. None the less the authority did not take care to delete such entry so as to bring the demand notice and form in conformity with the provisions of the Act and Rules, According to Mr. Das Gupta, incorporation of entry of penalty in the demand notice form renders the demand invalid and such demand being the basis of the certificate, the proceedings based thereon are also invalid. This contention is stated only to be rejected. It is not the case of Mr. Das Gupta that there has been an imposition of penalty on the dues of the petitioner, and the mere existence of the entry of penalty in the statutory form does not, in our opinion, render the demand invalid or fatally defective.

11. Mr. Das Gupta has also drawn our attention to the description of the Commercial Tax Officer as prescribed authority in the form of notice and assessments under the Central Sales Tax Act and submitted that this indicates that in levying, assessing or collecting the demand the Commercial Tax Officer acts as prescribed authority. Such description is not to be found in the demand notices or in the certificate which should have described the certificate-holder as representing the Union of India. The statutory agency, it appears, was created by the relevant Act and thereby the State of West Bengal itself has been given full and complete powers of levying, assessing and recovering of the Central sales tax dues. Accordingly, it is not necessary that in the certificate or in the demands there should be any description of the appropriate authority as acting as the prescribed authority under the Central Sales Tax Act when all powers in connection therewith has been given to the State Government and its sales tax authorities under its general law of sales tax.

12. There is no doubt that in column 3 there is a misdescription in respect of demand which is stated to be under the Bengal sales tax law. This error in description has not caused any prejudice to the petitioner particularly when the certificate itself mentions that the amount has been due under the Central Sales Tax Act. Considering all aspects we are of the opinion this incorrect entry does not render the certificate in any way invalid.

13. It has been further contended that the delegation of power by the Central Government has not been properly done and has not been accepted by an Act of Legislature. In view of Section 9 of the Central Sales Tax Act delegating full powers to the authorities of the State under its sales tax law, it is difficult to appreciate the contention, as we find nothing improper about the delegation, which on its terms is absolute and complete. As to the other contention, in matters of administration of revenue and other law, when power is delegated by one government to another, no question of formal acceptance of delegated powers is called for or necessary.

14. All the contentions raised on behalf of the appellant fail and this appeal is accordingly dismissed. In the circumstances there will be no order as to costs. The respondents will be entitled to appropriate the amount deposited with the Registrar, Appellate Side, towards the dues under the certificate as prayed for by the learned Advocate for the appellant.

15. Let the operation of the order be stayed for eight weeks from date as prayed for by the learned Advocate for the appellant.

B.C. Ray, J.

16. I agree.


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