Messrs. Durga Sree Stores v. Board Of Revenue, West Bengal And Anr. Opposite Parties.

2. This rule was issued under Article 227 of the Constitution of India. It is directed against an order, passed by Shri N. Roy Choudhury, Additional Member, Board of Revenue, West Bengal, rejecting the revisional application of the present petitioner in the matter of assessment of tax under Bengal Finance (Sales Tax) Act, 1941.

3. The petitioner is a partnership firm, engaged in the business of wholesale distributer of stationery and toilet goods, provisions and other allied products. The firm was registered as a ‘dealer’ under the Bengal Finance (Sales Tax) Act, 1941 and Registration Certificate bearing No. C.S 1|2193A, was issued to the petitioner firm. In course of its business, the petitioner firm claims to have sold goods to various parties, many of whom were also “Registered dealers” under the Bengal Finance (Sales Tax) Act, 1941. During the assessment proceeding for the year 1954–55 under section 11 of the above Bengal Finance (Sales Tax) Act, 1941, the petitioner firm submitted a return, showing the gross turnover for the period of four quarters, ended 31st March 1955, at Rs. 15,62,840-5-6 pies and the corresponding Trading Profit and Loss Account was also produced, showing the sales at the same figure. The Commercial Tax Officer verified the sale with the cash memos and found them to agree.

4. In the above return, submitted by the petitioner (Assessee) firm, exemption was claimed first under section 5(2) (a) (i) of the aforesaid Act, that is, for sale of goods, declared tax-free under section 6, for an amount of Rs. 84,248-1-6 pies. That part of the claim was wholly allowed by the assessing officer. The Assessee firm also claimed exemption under section 5(2) (a) (ii) for sales to ‘registered dealers’ for Rs. 14,78,594-4-0 p. In respect of this part of the claim of exemption the assessing officer allowed exemption only to the extent of Rs. 21073-3 as but he disallowed the claim in respect of Rs. 14,57,521/-. He found that the sales had apparently been made to ‘registered dealers’ but the reason for his disallowing exemption in respect of Rs. 14,57,521/- was that the said officer was suspicious about the “genuineness and integrity” of the relative transactions, which were comparatively heavy. The purchasing dealers in those transaction are said to have left the business and the registration certificate of each of those dealers has since been cancelled. For these reasons, the Commercial Tax Officer found the very nature of the said transactions to be suspicious and held that they were fraudulently shown with a view to avoiding payment of tax. This assessment was made by an order, dated, 5th December 1956.

5. Against the above order of assessment the petitioner firm preferred an appeal before the Assistant Commissioner of Commercial Taxes, Calcutta (Central) and the said appellate officer held that the commercial tax officer had disallowed the claim on presumption and suspicion but, in none of the cases in question the Registration Certificate has been cancelled by any notification, as required by law, at the relevant time. In respect of eight items, however, this appellate officer found the requisite statutory declarations to be defective inasmuch as, in these eight declarations, the purpose of purchase had not been specified, as required under Rule 27 of the Bengal Sales Tax Rules. The total amount of transaction in respect of these eight items comes to Rs. 5,12,430-4 as and he (the appellate officer) disallowed the claim for exemption in respect of that amount under section 5 (2) (a) (ii). The order of the Commercial Tax Officer was modified accordingly by order, dated 6th May 1957. Thereafter however, the Additional Commissioner of Commercial Taxes, West Bengal, by his order, dated 5th August, 1957 in Revision Case No. 195 of 1957–58, disallowed the exemption of claim for a further amount of Rs. 48,178/- representing sales to Messrs. Narayan Bastralaya on the ground that the said amount had been left out by a clerical error and had been overlooked by the Assistant Commissioner but he allowed deduction in respect of a sale to Saha Stores for an amount of Rs. 33, 937-2 as, which had been disallowed by the Assistant Commissioner. The order of the Additional Commissioner brought the total amount of exemption disallowed under the above head, to Rs. 5,26,667-2 as. Against the above order, the petitioner firm moved the Board of Revenue, State of West Bengal, by way of Revision under section 20(3) of the West Bengal Finance (Sales Tax) Act, 1941 and that Revision petition was registered in the Board as case no 305 of 1957 and it was heard and rejected by Shri N. Roy Chaudhury, Additional Member, Board of Revenue, by his order, dated 30th March 1960 wherein he found, inter alia, as follows:—

“The declaration forms show that by and large individual transactions were of heavy amounts. The sales are all said to be in cash purchases by them being also in cash. It is argued that the defects in respect of the 9 declaration forms are of a technical nature. One of the most curious circumstances is that the registration certificates of all 30 purchasing dealers except one were cancelled in some cases within months, in some cases within a year and one or two cases within two years of the sale transactions evidenced by them. If in these circumstances, the authorities below have rejected 9 declaration forms, I do not see any reason why I should interfere.”

6. Against this order of the Board of Revenue, the assessee firm moved this court under Article 227 of the Constitution of India and obtained the present Rule.

7. Mr. Alak Gupta, appearing on behalf of the petitioner firm, has attacked before us the correctness and propriety of the order of the learned Additional Member, Board of Revenue, mainly on the ground that the Board of Revenue, in disposing of the above Revisional application, did not advert to the record, which shows that the reason of the Commercial Tax Officer, that the very nature of the transactions was suspicious, had not been accepted by either the Assistant Commissioner of Commercial Taxes, who allowed the claim in respect of 21 transactions out of 30 items but disallowed the claim only in respect of 9 (8+1) transactions and the only reason which weighed with the said authorities for disallowing the claim in respect of those nine items was that the purpose of the purchase had not been specified in the relative statutory declarations in these nine cases. The Board of Revenue did not at all apply its mind to that reason of the Assistant Commissioner and the Additional Commissioner of Commercial Taxes, or to the contentions of the assessee firm against the same. But the Board proceeded only upon suspicion, that is, the reason for disallowance, which weighed with the Commercial Tax Officer but which was rejected by the Assistant Commissioner and the Additional Commissioner of Commercial Taxes. In this connection, Mr. Gupta has drawn our attention to the fact that the order of the Assistant Commissioner was not challenged by the department. According to Mr. Gupta, the learned Additional Member, Boara of Revenue, has in the circumstances, acted in excess of his jurisdiction and with gross impropriety and his order is liable to be set aside by the Court in the exercise of its power of super-intendence under Article 227 of the Constitution. According to Mr. Gupta further, the error he is complaining against, has been caused by violation of canons of natural justice in so far as the tribunal concerned has been influenced by bias, arising from the fact that Registration certificates of the purchasing dealers had since been cancelled. Those cancellations, however, were made long after the impugned transactions of purchase from the assessee firm so that, so argued Mr. Gupta, that fact could have no bearing or relevancy whatsoever in relation to the petitioner's claim for exemption-under section 5 (2) (a) (ii) of the Act. According to Mr. Gupta again the error is apparent on the face of the record, as the impugned order appears to be arbitrary and it does not disclose any relevant reason for rejecting the petitioner's revisional application under section 20(3) of the Act and it is not possible to ascertain on what legal ground the said rejection is based. Another error also, according to Mr. Gupta, is apparent on the face of the record, namely that the tribunal below failed to appreciate that if the sales in question were not genuine transactions those could not be considered in determining the gross turnover for the purpose of assessment of tax under the Act. Mr. Gupta also referred to three cases before the Board of Revenue namely,

(1) Case No. 22 of 1951 (Shriniwas Jiwanram v. State of West Bengal)

(2) Case No. 268 of 1957 (Royal Stores Supply v. State of West Bengal) &

(3) Case No. 1 of 1954 (P.L Mukherjee and Sons v. State of West Bengal).

where the Board of Revenue had held that a seller could not be responsible for the movement of the purchasing dealer and also that defects in declaration forms, similar to those in question in the present case, were immaterial and of no consequence and attacked the order of the Board of Revenue in the present case as having violated canons of natural justice and also basic principles in the matter of exercise of jurisdiction in disregarding its own precedents and procedure. In support of his contention that such defects as above bring the present case within the scope of Article 227 of the Constitution of India. Mr. Gupta relied on two decisions of the Supreme Court, namely, the case of (1) D.N Banerjee v. P.R Mukherjee, reported in 1953 S.C.A 303 and the case of (2) Waryam Singh v. Amar-nath reported in 1954 S.C.A 334.

8. Mr. Mukherjee appearing on behalf of the opposite parties before us, has contended that the present application tinder Article 227 of the Constitution is not maintainable because the grounds, mentioned by Mr. Gupta, for impugning the order in question are not sufficient to bring the case within the ambit of that Article of the Constitution. He contested Mr. Gupta's argument about lack of reason or violation of any rule of natural justice because, according to him, the reason for disallowance was the violation of the statutory rules, particularly Rule 27A of the Bengal Sales Tax Rules, read with rules 6 and 7 and the relevant forms, prescribed by or under the said rules. In support of this contention Mr. Mukherjee relied on the decisions of the Supreme Court, reported in (3) A.I.R 1957 S.C 882 (Union Of India v. T.R Varma ), (4) A.I.R 1958 S.C 398 (Nagendra Nath Bora v. Commissioner of Hills Division), (5) A.I.R 1959 S.C 1111 (Phulbari Tea Estate v. Workmen) (6) A.I.R 1960 S.C 137 (Satyanarayan Laxminarayan Hegde v. Mallikarajun Bha-vanappa Tirumala). Mr. Mukherjee's second submission was that Article 227 of the Constitution could not be availed of by the petitioners as the Act itself, with which we are here concerned, contained within it a complete remedy, in or under section 21 thereof. Mr. Mukherjee further contended that there was no error, apparent on the face of the record, because the decision of the tribunals below was based on an interpretation of certain sections of the Act, which led them to hold that the particular Declaration Forms had not been duly filled up because all the alternative entries, regarding purpose of purchase, printed in the said forms, had been retained without striking out any. According to Mr. Mukherjee therefore, there was no error, apparent on the face of the record, to bring the case within Article 227 of the Constitution and he relied on the decisions of the Supreme Court, reported in (4) A.I.R 1958 S.C 398 (Nagendra Nath Bora v. Commissioner of Hills Division), (6) A.I.R 1960 S.C 137 (Satyanarayan Laxminarayan Hegde v. Mallikarajun Bhavanappa Tirumala) and (7) A.I.R 1961 S.C 970 (Shri Ambica Mills Co. Ltd. v. Shri S.B Bhatt) in support of his above contention. Mr. Mukherjee also contended that the impugned order was based on inferences from facts, available to the Tribunals below from the departmental file and, according to Mr Mukherjee, such decision was not revisable in the exercise of the powers of this court under Article 227 of the Constitution. For this branch of his submission, Mr. Mukherjee relied on the case of Kapur Brothers v. Commercial Tax Officer (8) A.I.R 1958 Cal. 125, as an authority.

9. The contention of Mr. Mukherjee regarding the limits of the scope of Article 227 has to be examined before we proceed to consider Mr. Gupta's submissions on the merits. It may perhaps be conceded, for purposes of this case, that the jurisdiction of this Court under Article 227 of the Constitution will not be exercised for correction of mere errors of law or fact of the Tribunals below and that the powers under Article 227 are to be exercised only to keep the subordinate tribunals within the bounds of their authority or jurisdiction. As a corollary it may perhaps also be conceded that even an error of law would not attract the power of superintendence under Article 227 of the Constitution unless such error has been on a jurisdictional point. What is jurisdictional error or error on a jurisdictional point we shall presently consider so far as it is necessary for our present purpose but we deem it pertinent to note here that even on the highest authority (vide, Satyanarayan Laxminarayan Hegde v. Mallikarjun Bhavanappa Tirumala, (6) A.I.R 1960 S.C 137)— to cite the latest Supreme Court case on the point—the Article may be attracted in appropriate cases, to correct errors, other than purely jurisdictional errors, where such errors are apparent on the face of the record. Numerous indeed, are the judicial decisions on the above Article and, on those authorities, it may now be taken to be firmly settled that the scope of Article 227 of the Constitution of India is at least as wide as that of old section 107 of the Government of India Act, 1915 [vide Satyanarayan Laxminarayan Hegde v. Mallikarjun Bhavanappa Tirumala, (6) A.I.R 1960 S.C 137].

10. It was pointed out by Chief Justice Harries in the case of Abdul Rahim Naskar v. Abdul Jabbar Naskar (9) reported in 54 C.W.N 445 as also in the case of (10) Bimala Prosad Roy v. State of West Bengal (55 C.W.N 87) that on the High Court's power of superintendence, section 107 of the Government of India Act, 1915, which had been curtailed by section 224 of the Government of India Act, 1935 has been restored in full by Article 227 of the Constitution of India. The extent and limits of this power of superintendence was broadly defined in a judgment, delivered by Rankin, C.J in the case of Manmatha Nath Biswas v. Emperor (11) reported in 37 C.W.N 201, thus:

“The general superintendence which this court has over all jurisdiction subject to appeal, is a duty to keep them within the bounds of their authority to see that they do what their duty required and that they do it in a legal manner.

Defects of jurisdiction, fraud on the part of prosecutor and error on the face of the proceedings are all good grounds”

for exercise of the above power of superintendence. This jurisdiction has been held to include judicial as well as administrative superintendence in the case of Hari Bishnu Kamath v. Ahmad Ishaque (12) A.I.R 1955 S.C 233, and, as already noticed, it will extend to cases of jurisdictional error as also errors, apparent on the face of the record (vide Satyanarayan Laxminarayan Hegde v. Mallikarjun Bhavanappa Tirumala (6) A.I.R 1960 S.C 137. The case of (7) Sri Ambica Mills Co. Ltd. v. S.B Bhatt, A.I.R 1961 S.C 970 does not, to say the least, lay down anything to the contrary. No doubt in (4) Nagendra Nath Bora v. Commissioner of Hills Division, A.I.R 1958 S.C 398 there are some observations, not wholly reconcilable with the above view but in view of the later Supreme Court decision (Satyanarayan Laxminarayan Hedge v. Mallikarjun Bhavanappa Tirumala, (6) A.I.R 1960 S.C 137), those observations have much of their force. In our view, then, if the decision of a tribunal can be shown to be arbitrary and devoid of reason or erroneous on the face of it or to be based on an error on a jurisdictional point, then, by the exercise of the power of superintendence under Article 227 of the Constitution this court can and should revise the said decision.

11. What is a jurisdictional error has been the subject of illuminating judicial decisions. In this case, however, we need concern ourselves with only one aspect of that matter and it is enough for us to refer in this connection to the decision of the Privy Council in the case of Joy Chand Lal Babu v. Kamalakshya Chaudhury (13) L.R 76 I.A 131, where Sir John Beaumont, delivering the judgment of the Board, observed, inter alia, as follows:—

“although error in a decision of a subordinate court does not by itself involve that the subordinate court has acted illegally or with material irregularity so as to justify interference in revision under sub-section (c) nevertheless if the erroneous decision results in the subordinate court exercising a jurisdiction, not vested in it by law or failing to exercise a jurisdiction so vested a case for revision arises under sub-section (a) or subsection (b) and sub-section (c) can be ignored.”

12. If therefore an error, be it an error of fact or of law, is such that the erroneous decision has resulted in the subordinate court or tribunal exercising jurisdiction, not vested in it by law, or in its having failed to exercise jurisdiction vested in it by law, that will come within the scope of section 115 of the Civil Procedure Code or for the matter of that, of Article 227 of the Constitution, as the case may be. This error may have resulted from a violation of rules of natural justice by taking into consideration matters which are extraneous and irrelevant or by substituting judicial consideration by bias, based on suspicion, arising from those extraneous matters or from any other cause whatsoever but if it has affected the assumption or exercise of jurisdiction, as envisaged above, it will be a jurisdictional error for purposes of the above Article.

13. We shall first examine the present case to see whether any jurisdictional error as above, has been committed by the tribunal concerned, that is, the Board of Revenue.

14. The error, complained of by Mr. Gupta, is of omission to deduct sales to a ‘registered dealer’ from the gross turnover to ascertain the taxable turn over under section 5 (2) (a) (ii). Only by such deduction can the taxable turnover be ascertained for levying the tax under section 4 of the Act. If by error in this respect, the Tribunal has omitted to deduct what section 5 (2) (a) (ii) enjoins it to deduct, then the tribunal has failed to grant deduction, to which the assessee is entitled, and the tax has been levied, on an amount which the tribunal has no jurisdiction to tax. In other words, by reason of such error, the tribunal has assumed jurisdiction to levy tax on deductible or non-taxable amount and has failed to exercise jurisdiction to grant deduction or exemption enjoined by law. It follows, then that if there has been an error by the Tribunal of the nature, contended for by Mr. Gupta, it is on a jurisdictional point and on the authority of the decisions above referred to, it clearly comes within the purview of Article 227 of the Constitution and makes the decision of the tribunal amenable to the powers of revisional superintendence of this Court under that Article.

15. On the merits, Mr. Gupta has pointed out that the impugned transactions were sales to “Registered dealers” who at the date of the particular transaction, held Registration certificates, issued by the department. This is admitted on all hands, sometime later, these registration Certificates were cancelled by the department. This cancellation of the Registration certificates, however, cannot have retrospective effect so as to affect the legality or validity of the above transactions of sale of earlier dates. The reason that impelled the Commercial Tax Officer to disallow the deductions was that he found the very nature of the transactions in question to be suspicious as the transactions had been entered in the books as having been made on cash. Against this order of the Commercial Tax Officer, there was an appeal to the Assistant Commissioner of Commercial taxes, and he, in his order, did not accept the Commercial Tax Officer's above reason because the latter had not discussed any evidence in support of his suspicion. The Assistant Commissioner, therefore, upheld, the disallowance only in respect of those items, in which he found that the Declaration Forms were defective, in so far as the purpose of purchase had not been specified and|or date had not been given below the signature of the declarant. The items, so disallowed, were originally eight in number but the Additional Commissioner in revision added another item on the same ground, which had been dropped by the Assistant Commissioner in his summing up through inadvertence or clerical error, The learned Additional Member of the Board of Revenue, however, while dealing with these 9 items, has not at all dealt with the reason of alleged defect in the Declaration forms but has based his decision only on the reason of suspicion which weighed with the Commercial Tax Officer but which was rejected or overruled by the Assistant Commissioner in appeal. As a matter of fact, the learned Additional Member of the Board of Revenue has based his order, now under challenge herein, mainly upon the following observations:

“One of the most curious circumstances is that registration certificates of all 30 purchasing dealers except one were cancelled; in some cases within a few months, in some cases within a year and in one or two cases within two years of the sale transactions evidenced by them. If in these circumstances, the authorities below have rejected 9 declaration forms I do not see any reason why I should interfere. The petition is rejected.

16. This decision of the Board of Revenue, Mr. Gupta has argued, has also been arbitrary in view of three decisions of the Board, one of which was by the Additional Member of the Board of Revenue himself, in which similar circumstances have been held to be of no consequence in the matter of allowing deduction under section 5 (2) (a) (ii) of the Act and, further that it is in violation of canons of natural justice, because it proceeds upon a reason which was rejected by the appellate authority, the Assistant Commissioner and also by the Additional Commissioner, against which no objection was or could be taken by the Department.

17. On behalf of the opposite parties, Mr. Mukherjee has not relied on the reason of suspicious nature of the transactions but he has sought to justify the order of the Board of Revenue by relying on the reason that the Declaration forms were defective as was held by the Assistant Commissioner of Commercial Taxes. Regarding these defects, Mr. Mukherjee has contended that the relevant Form XXIV, prescribed under Rule 27A of the Bengal Sales Tax Rules, requires the purpose of the purchase to be entered in it, where that form provides the following entry—

“are for resale

use in manufacture of goods for sale

use in the execution of contracts

Packing of goods for resale.”

and a foot note in that form says ‘strike out whichever is not applicable’.

18. In the forms IIA and IIB, which are the forms of certificates for registration of the dealer, the relevant portion reads as follows:

“the business is

+ wholly

mainly

partly

partly

partly

19. Sales of the following goods to this dealer will be free of tax—

(a) for purposes of manufacture (b) for re-sale. A foot note in this form says, in respect of the portion quoted above,—

+ “Enter here whether business is wholly agriculture, horticulture, mining, manufacturing wholesale or retail distribution, contracting or catering, or a combination of any two or more.”.

20. Mr. Mukherjee has argued, by reference to the above forms, that, in the Declaration Forms in question, the purpose of the purchase had to be specified by striking out which ever was not applicable and he has produced before us the Declaration Forms, which were used in the transactions involved in the present case, to show that, in none of those, any of the four alternatives has been struck out. Mr. Mukherjee, accordingly, contends that the said Declaration Forms did not comply with the requirement of Rule 27A. The other defect, which weighed with the Assistant Commissioner of Commercial Taxes and which was relied on by Mr. Mukherjee before us, was that, in the relevant forms (No. XXIV) used in the instant cases, at the right hand bottom, below ‘signature and status of the person signing the declaration’, the date had not been mentioned. This second point of alleged defect, urged by Mr. Mukherjee, can at once be disposed of by pointing out that, while, in the forms, which were actually used in these transactions, there is an entry for date printed, yet we find that the form, actually prescribed in Bengal Sales Tax Rules, 1941, and printed in the Government publication, corrected up to 1st September 1956 at page 50, does not contain any entry for date below or under ‘signature’. Inclusion of entry for date in the forms supplied is, therefore, unauthorised. Accordingly, omission of the date under the signature cannot be considered a defect or non-compliance with any provision of the Act or the Rules. It is curious how, in the printed forms, which were issued by the department for use by the dealers, this additional entry about date could come to be included, thereby deviating from the form, prescribed under the Act. Mr. Mukherjee could not explain this discrepancy or divergence.

21. Regarding the first defect, said to have been brought about by the non-striking out of any of the four alternatives mentioned in the printed Form (No. XXIV) as purpose of the purchase, it appears that the connected forms Nos. IIA and IIB (the Registration Certificates) themselves contemplate that the purpose of the purchase may well be either the purpose of manufacture or resale or any of the several alternatives mentioned in the foot note of these forms, either “wholly” or ‘mainly’ or ‘partly’. If the certificate of Registration of any particular registered dealer would include those multiple purposes, then, in the Declaration form, all the alternatives, taken together may very well be the purpose of purchase and none of the entries in Form No. XXIV would require to be scored out. In the present case, there is nothing to show that the certificates of Registration of the dealers, to whom the goods in question were sold, did not include those multiple purposes. Besides, in view of the contents and structures of the several forms (Nos. IIA, IIB and XXIV) it seems to us that the mere non-striking out of the alternatives would not in any sense be a fatal defect.

22. Therefore the mere fact that none of the four entries above mentioned in Form XXIV has been scored through does not by itself, show that the Declaration form used was defective. That is the only reason which weighed with the Assistant Commissioner of Commercial Taxes in disallowing the deduction in respect of nine items of transactions, totalling Rs. 5,26,667-2- as. We have already mentioned that the Additional Member of the Board of Revenue has not at all considered this aspect of the matter and has proceeded on mere suspicion, which is hardly consistent with a judicial or even a quasi-judicial approach. The error, therefore, which the tribunals below have committed is not an error on a mere question of fact or law but an error, touching and concerning jurisdiction. By committing such error, the said tribunals have failed to exercise jurisdiction to grant deduction under sec. 5(2) (a) (ii) to which the assessee was entitled and they have assumed jurisdiction to disallow deduction under section 5 (2) (a) (ii) which jurisdiction they would not have but for such error: in any view, the error has vitiated the said tribunal's exercise of jurisdiction in the matter. Thus it is a jurisdictional error and Mr. Mukherjee's submission that the order of the tribunal below is based only on an inference from facts or on a mere error of law, not affecting jurisdiction cannot be accepted. This disposes of the, main contentions raised by Mr. Mukherjee.

23. The only other contention which the learned Counsel raised was that under section 21 of the Act, the assessee had an alternative remedy. That section provides for an application by the assessee to the Board to refer any question of law, arising out of an order, and such an application can be made only by paying a fee of one hundred rupees (Rs. 100/-) under sub-section (1) and the payment of the amount of tax cannot be stayed pending the disposal of such application in view of sub-section (7) of that section. The right, thereby given, is therefore, in no sense a remedy, alternative to the remedy that Article 227 of the Constitution provides and even apart from that, section 21 is not a specified or convenient remedy so as to disentitle the petitioner from seeking relief by invoking the jurisdiction of this court under Article 227.

24. There can be no doubt also that if our above view is correct, there has been grave failure of justice in the instant case before the Tribunal below.

25. In the circumstances, this Rule should succeed, but before we conclude, we would express our views on one other submission of Mr. Gupta which also, as we shall presently see, is of considerable force and merits acceptance.

26. In this last quoted submission, Mr. Gupta contended that the Board of Revenue having held in several cases that circumstances, to those, relied on by the Tribunals below on the instant occasion are of no consequence, they acted arbitrarily in refusing the deduction claimed in the present case under sec. 5 (2) (a) (ii) of the Bengal Finance (Sales Tax) Act, 1941. There is considerable force in this submission of Mr. Gupta. Even apart from the question whether the doctrine of precedents would apply in full vigour to Tribunals of the nature of Board of Revenue it is certainly a consideration of natural justice that the authorities in the sphere of taxation cannot hold the citizen to their whims and caprices in matters, concerning essential practices of trade and business, allowing deductions under section 5 (2) (a) (ii) in some cases and disallowing such deduction in some others, although the circumstances, appertaining to both the categories, were exactly similar. In the matter of operation of the Bengal Finance (Sales Tax) Act, the Board of Revenue is ordinarily the highest authority and decisions of that Tribunal are binding on the taxing authorities. It is only just and fair that the citizen who has taken his guidance from the earlier decisions of the Board shall not be allowed to be prejudiced or victimised by sudden and unreasoned reversal of the view point of that highest authority.

27. In the above connection, Mr. Gupta relied on a decision of our learned brother, P.B Mukharji, J., in the case of Mercantile Express Co. Ltd. v. Asstt. Collector of Customs, (14) reported in 62 C.W.N 661, where his Lordship held that such change of mind varying from case to case will lead to utter confusion in the very basis and principles of taxation and grave uncertainty of business and ‘the most unfair discrimination of taxes’. The grave reason behind the above observations of P.B Mukharji, J., has full application to the fact of the present case.

28. We, accordingly, hold that the Board of Revenue acted arbitrarily and in violation of natural justice by not adhering to their own precedents in administering this taxing statute when there was no reason or circumstance to justify any change of mind of that Tribunal.

29. On that ground, also, the order of the Additional Member, Board of Revenue is liable to be set aside and the prayer of the petitioner for deduction under section 5 (2) (a) (ii) in respect of the disputed 9 items of transactions totalling Rs. 5,26,667-2 as should be allowed.

30. In the premises we make this Rule absolute, set aside the orders disallowing the deductions under section 5 (2) (a) (ii) of the Bengal Finance (Sales Tax), 1941, and direct that in ascertaining the taxable turnover of the petitioner firm for the period in question the amount of those transactions be deducted from the gross turnover and the tax under section 4 of the Act be calculated and levied on that footing on the amount, which remains after such further deduction.

31. In the circumstances of this case, we do not make any order as to costs in this Rule.

S.K.B