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M/S Rasoi Products & Anr. v. Commercial Tax Officer, Shyambazar & Ors.
Structured Summary of the Opinion
Factual and Procedural Background
This petition under Article 226 was filed by M/s. Rasoi Products (a partnership firm) and Dilip Kumar Basu (a partner) challenging notices issued under Section 9(3) of the West Bengal Sales Tax Act, 1954. The petitioners purchase turmeric (halud/haridra) and black and white pepper in various forms from the local market in Calcutta and pay sales tax at the point of purchase under the Bengal Finance (Sales Tax) Act, 1941. They claim they are neither importers nor producers, processors or manufacturers of these notified commodities within the meaning of the West Bengal Sales Tax Act, 1954.
The petitioners produced assessment orders (for accounting years 1373 B.S. to 1384 B.S.) showing the authorities had accepted that their purchases were made within West Bengal and had accepted returns, vouchers and documents supporting exemption or non-liability under the relevant law. Despite those assessments, respondent No. 1 issued notices under Section 9(3) of the West Bengal Sales Tax Act, 1954 proposing to reassess the petitioners for tax liability on powdered turmeric and pepper. The petitioners sought cancellation/withdrawal of those notices and approached the High Court by way of the present writ petition.
Legal Issues Presented
- Whether powdering (grinding) turmeric or pepper purchased within West Bengal converts the commodity into a new "notified commodity" such that the purchaser becomes a "dealer" liable to tax under Section 2(b) of the West Bengal Sales Tax Act, 1954 (i.e., whether powdering amounts to manufacturing, making or processing).
- Whether the issuance of notices under Section 9(3) of the West Bengal Sales Tax Act, 1954 to reassess past years (up to 12 years) was valid, in particular whether the assessing officer had sufficient material to invoke Section 9(3).
- Whether the residuary provision of the Limitation Act (Section 29 of the Limitation Act) applies to bar assessments where the Sales Tax Act and Rules gave no limitation period prior to the insertion of Section 9(3A) (which prescribes 48 months), and relatedly whether assessments beyond three (or later 48) months/years were barred.
- Whether reopening assessments after the assessing authority had accepted returns and supporting documents (and the petitioners had not collected tax from purchasers of powdered goods) would amount to unlawful double taxation or a miscarriage of justice.
Arguments of the Parties
Petitioners' Arguments (as advanced by Mr. Gopal Chakraborty)
- The petitioners purchase turmeric and pepper within West Bengal and pay tax at the point of purchase; powdering those locally purchased commodities does not make them "manufactured, made or processed" within the meaning of Section 2(b) of the West Bengal Sales Tax Act, 1954.
- Powdering does not change the statutory, commercial or botanical identity of the commodity; therefore it should not attract tax again under the West Bengal Sales Tax Act, 1954, which—petitioners contend—was intended as a single-point levy on certain commodities.
- Assessments for the years 1373 B.S. to 1384 B.S. were completed after scrutiny of returns and supporting documents and accepted by the authorities; having so accepted, respondent No. 1 cannot reopen or reassess those years after a long interval (12 years).
- On limitation, the petitioners argued that if the Sales Tax Act contained no period of limitation at the relevant time, the residuary clause of the Limitation Act should apply, thereby barring assessments beyond three years; respondents' notices covering twelve years are therefore time-barred.
- The petitioners asserted estoppel against the respondents, who had previously accepted the returns and not insisted on taxing powdered turmeric and pepper.
Respondents' Arguments (as advanced by Mr. S. Bhattacharyya)
- The respondents submitted that a statutory notice to show cause had been issued and that the petitioners rushed to the court instead of answering that show-cause notice; there was no challenge to the inherent jurisdiction of the officer to serve the notice nor an allegation of violation of statutory provisions.
- Respondents disputed the petitioners' factual claim that all purchases were local; they contended the court should not act as a fact-finding forum since there are disputed and complicated questions of fact.
- Respondents relied on the precedent Mahabirprasad Birhiwala v. State of West Bengal ([1973] 31 STC 628) to support their position.
- On limitation, respondents argued the Limitation Act's residuary provisions (Section 29) did not apply because no particular period was fixed by the Sales Tax Act for such assessments at the relevant time.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Mahabirprasad Birhiwala v. State of West Bengal, [1973] 31 STC 628 (also referenced 1974 Tax LR 1728) | Relied upon by respondents to support the proposition that powdering could attract liability under the West Bengal Sales Tax Act and to justify issuance of reassessment notices. | The Court noted the precedent had been relied upon by the respondents but stated it was "unable with great respect to accept the judgment delivered by the learned Judge in Mahabirprasad Birhiwala's case" (citing 1974 Tax LR 1728). The Court found that the earlier judgment did not consider the object and entire frame of the Act and the relevant notifications/rules; therefore the earlier reasoning was not accepted by this Court for the facts before it. |
Court's Reasoning and Analysis
The Court proceeded through a fact-specific statutory and contextual analysis, applying definitions, prior assessments and the statutory scheme set out in the Acts and Rules. The analysis as reflected in the opinion is summarized in the following steps:
- Definitions and Notification: The Court examined the statutory definition of "turmeric" (including whole, broken, ground or powdered) and the definition of "dealer" under Section 2(b) of the West Bengal Sales Tax Act, 1954 (which includes persons who sell notified commodities manufactured, made or processed by them in West Bengal or brought into West Bengal from outside for sale).
- Factual Finding on Purchases and Prior Assessments: The Court accepted (on the basis of assessment orders and documents annexed) that the petitioners had purchased the commodities within West Bengal, that taxes on those purchases had been paid, and that the assessing authorities had earlier accepted those returns and supporting documents when completing assessments for the years 1373 B.S. to 1384 B.S.
- Whether Powdering Equals Manufacture/Processing: The Court considered whether powdering (grinding) the locally purchased turmeric/pepper amounted to manufacturing, making or processing such that the petitioners would become "dealers" under Section 2(b). The Court concluded there was no evidence that the petitioners had manufactured, made or processed the notified commodities in the sense contemplated by the statute and the examples of manufacturing given (e.g., soap, biscuits, matches, lozenges). In the Court's view, powdering altered only the form, not the substance or commercial/botanical identity, and therefore did not convert the petitioners into dealers within the statutory meaning.
- Single Point Levy and Double Taxation Concern: The Court emphasized the legislative scheme and notifications indicating that certain commodities were to be taxed at first point (single-point levy). The Court reasoned that permitting taxation again after a prior tax point (when purchase was made within West Bengal and taxed) would amount to multiple taxation on the same goods, contrary to the scheme and basic tax principles.
- Validity of the Section 9(3) Notices: Having found the earlier assessments accepted the in-State purchases and the tax position, the Court observed that the assessing officer (Commercial Tax Officer) did not have sufficient materials to justify issuance of the Section 9(3) notices. The Court held that the prerequisites of Section 9(3) had not been satisfied and therefore the notices were invalid.
- Limitation Argument: The petitioner argued that, in absence of a limitation period in the Sales Tax Act at the relevant time, the residuary Limitation Act provision should apply to bar older assessments. The Court expressly rejected the petitioners' contention that the residuary clause of the Limitation Act was applicable in this case. Nevertheless, for other reasons (accepted returns, prior completed assessments, limited review power of assessing authority, and lack of sufficient material at time of notice), the Court held that reopening assessments after twelve years was impermissible.
- Weighing of Competing Factual Contentions: The Court relied on the assessment records and the fact that the respondents had previously completed assessments accepting the petitioners' position; on that factual matrix the Court found it unnecessary to act as a fact-finding body to reopen matters where the assessing authority had already accepted the returns and materials.
- Conclusion from Reasoning: Because the petitioners had been assessed on the basis that purchases were local and taxes paid and there was no evidence of manufacture/import for the purpose of sale, and because the assessing officer lacked material required under Section 9(3), the Court concluded the assessment notices were not warranted by law and reopening after such a long interval would cause a miscarriage of justice.
Holding and Implications
Holding: The Court concluded that the impugned notices/attempts to reassess were not warranted by law and, accordingly, the Court made the rule absolute.
Direct Implications for the Parties:
- The petitioners (M/s. Rasoi Products and Dilip Kumar Basu) are relieved from the reassessment notices issued under Section 9(3) in respect of the periods challenged in the petition.
- The Court found that the petitioners did not become "dealers" under Section 2(b) of the West Bengal Sales Tax Act, 1954 for the notified commodities by merely powdering turmeric and pepper purchased within West Bengal and had been properly assessed on the basis that purchases were local and taxed at entry under the Bengal Finance (Sales Tax) Act, 1941.
- The assessing authority cannot, on the same materials previously considered and accepted, reopen assessments after 12 years in the circumstances of this case; the notices were invalid because the statutory preconditions for Section 9(3) were not met.
Broader Implications:
The opinion does not elaborate a general rule beyond the facts and statutory construction applied here; it does not expressly announce the creation of a new binding precedent in broader terms. The decision is directed at the validity of the specific reassessment notices and the facts and materials relied upon in this case.
1. This application has beentaken out by M/s. Rasoi Products, a partnership firm and Dilip Kumar Basu, a partner of the said firm, for necessary relief under Article 226 of the Constitution of India.
2. The petitioners deal in turmeric popularly known as halud or haridra and black and white pepper ground, powdered or in any other form or description, secured by purchase from the local market in Calcutta within the State of West Bengal. According to the petitioners, halud is a notified commodity which had been purchased by the petitioners from different dealers in Calcutta upon payment of taxes under the West Bengal Sales Tax Act, 1954. The petitioners are neither importer nor producer, processor or manufacturer of the said notified commodities under the Bengal Finance (Sales Tax) Act, 1941. The petitioners had purchased the said goods from the dealers who in turn have paid taxes to the State under the West Bengal Sales Tax Act of 1954 at the point of import into West Bengal. Petitioner No. 1 has been registered under the Bengal Finance (Sales Tax) Act of 1941 with the appropriate authorities and its registration certificate No. is SH/3931A. The petitioners had never been taxed by respondent No. 1 over those commodities as those commodities were purchased by the petitioners locally upon payment of tax. The persons who are required to be registered under the said Act must be either an importer or a manufacturer of any of the notified commodities covered by the West Bengal Sales Tax Act, 1954. It was the case of the petitioners that all on a sudden, petitioner No. 1 was served with a notice under Section 9(3) of the West Bengal Sales Tax Act, 1954, to appear before respondent No. 1 and to show cause as to why the petitioners should not be assessed to tax under the West Bengal Sales Tax Act, 1954, on the powdered turmeric and black or white pepper. In the petition the petitioners have given various particulars of the purchase of the said turmeric as also black pepper/white pepper as shown in the orders of assessment under the Bengal Finance (Sales Tax) Act, 1941, for the years 1373 B. S. to 1384 B. S. the entire gross amounts of sales were assessed as consideration of sales in West Bengal secured by purchase upon payment of tax from places within the State of West Bengal. From the copies of the assessment orders it would appear that the authorities concerned have accepted the said position. In those cases the petitioners claimed the entire gross amount of sale which is not liable to be taxed under the West Bengal Act on the ground that under the provisions of the West Bengal Act no tax is payable by the dealer in respect of any turnover of the notified commodities as consideration for sales in West Bengal of the notified commodity secured by purchase upon payment of tax from places within the State of West Bengal. In spite of that position and in spite of the fact that the explanation of the petitioners having been accepted by respondent No. 1 which would be evident from the various assessment orders passed by respondent No. 1, respondent No. 1 issued notices under Section 9(3) of the West Bengal Sales Tax Act, 1954, on notified commodities for the years 1373 to 1384 B. S. whereupon the petitioners requested respondent No. 1 to cancel and/or withdraw the said notice which respondent No. 1 refused to do. As, according to the petitioners, they are not liable to pay tax under the West Bengal Sales Tax Act, 1954, as such the question of getting registered under the said Act did not arise nor there was any information into the possession or materials on which respondent No. 1 could ask the petitioners to appear before him pursuant to the notice served as indicated above. The petitioners are regular assessees and after being duly satisfied with the returns as also vouchers and documents in support of the same respondent No. 1 has all along accepted the said position. It is the petitioners' case that since the judgment passed in Mahabirprasad Birhiwala v. State of West Bengal reported in [1973] 31 STC 628 respondent No. 1 has been inspired not only to serve the notice on the petitioners but also on other traders like Krishna Chandra Dutta (Cookme) Limited and Ganesh Masalla, etc.
3. By notifications dated 1st May, 1955, bearing No. 885-FT and dated 10th May, 1963, bearing No. 1918-FT the State Government in exercise of the power conferred by Section 25 and Clause (b) of Sub-rule (i) of Rule 14 of the West Bengal Sales Tax Rules, 1954, brought turmeric and black pepper and white pepper within the ambit of the said Act. Under the said Act the turmeric has been defined as "turmeric, known locally as haridra or halud, that is to say, the product obtained from the plant 'curcuma longa' whole, broken, ground or powdered, or of any other form or description whatsoever". Black pepper and white pepper have been defined as "known locally as gol marich, that is to say, the berry of the plant 'piper nigrum', whole, broken, ground or powdered, or of any other form or description whatsoever". A dealer has been defined under Section 2(b) of the said Act and means "any person who sells notified commodities manufactured, made or processed by him in West Bengal, or brought by him into West Bengal from any place outside West Bengal for the purpose of sale in West Bengal and includes Government".
4. According to the petitioner, the turmeric and black pepper and white pepper purchased by the petitioners from the local market which is deductible from the gross amount payable as consideration for sale in West Bengal of such notified commodity in terms of form No. IIIA prescribed under Rule 21A of the West Bengal Sales Tax Rules, 1954, remains a notified commodity even after the same is powdered, simply because the said commodity although locally purchased but after such purchase they are powdered by the petitioners does not make it statutorily or commercially a different commodity. Here the petitioners' case was that neither the petitioners have brought the said commodity into the State of West Bengal nor manufactured nor processed but simply the commodity which had been purchased by the petitioners locally had been powdered thereafter. If the petitioners are made to pay tax again for powdering the same then for the same identical goods the respondent would be entitled to collect taxes twice over. In view of the series of judgments of the Supreme Court of India it cannot be imputed that the legislature has the intention to keep on taxing over and again the same product in different forms which is contrary to the basic axiom of taxation. By simply powdering the turmeric and black pepper and/or white pepper the original commercial identity and/or characteristics of the commodity are not changed. In fact it is a matter of common knowledge that when the turmeric is purchased it is usually powdered or pasted for the purpose of daily use. The whole scheme of the Act of 1941 in respect of certain commodities of daily use, was for the purpose of realisation of tax at the first point after manufacture or process or import from outside the State of West Bengal. The entire scheme of the Bengal Act was a single point levy. As such when a commodity was liable to tax under the West Bengal Sales Tax Act, 1954, it ceases to be taxable under the general sales tax law of the State. By a notification indicated above, the turmeric and white pepper and black pepper are to include whole, broken, ground or powdered or any other form or description and as such turmeric and black pepper and white pepper do not become a new notified commodity after they are powdered. The petitioners have also made out a case that this particular provision of the Act interferes with the basic liberty given under the Constitution for free trade and commerce and the petitioners have gone so far as to challenge the State's legislative power to pass any Act covering the Union List, more specifically item No. 41 which covers inter-State trade and commerce. Taking the entire scope, object and pattern of the said Act and also the Rules framed thereunder it would appear that it could not have been the intention of the legislature to collect taxes over and again on the same goods and the learned Judge while delivering judgment in Mahabirprasad Birhiwala v. State of West Bengal reported in [1973] 31 STC 628 did not consider the object and also the entire frame of the Act which, according to the petitioners, was passed in per incuriam and noscitur a sociis. As such it has no binding effect. It is the petitioners' further case that more liberal and favourable interpretation should be given to Section 2(b) in favour of the assessee. It is the petitioners' further grievance that the assessment for the years 1373 B.S. to 1384 B.S. having been completed under the Bengal Finance (Sales Tax) Act of 1941, after taking into consideration the return with supporting documents, vouchers and after the authorities being satisfied that the said commodities had been purchased from the local market within the State of West Bengal the petitioners cannot be held liable to pay tax under the West Bengal Sales Tax Act, 1954.
5. The petitioners have also further taken the point of limitation. According to them, respondent No. 1 is debarred from making any assessment beyond a period of three years.
6. Mr. Gopal Chakraborty appeared on behalf of the petitioners and most emphatically argued that if there was no period of limitation prescribed under the provisions of the said Act the residuary clause under the Limitation Act would apply. Respondent No. 1 was not entitled to call for records for a period of more than three years as, according to him, the West Bengal Sales Tax Act of 1954 and the Rules framed thereunder at that relevant paint of time did not provide any period of limitation for the purpose of initiating an assessment and/or completing the same prior to 1st September, 1975, when, by an amendment in the West Bengal Act Sub-section (3A) was included in Section 9 prescribing a period of limitation of 48 months. As such, according to the petitioners, the notice for last twelve years was hopelessly barred by the law of limitation.
7. The Act of 1954 and the Rules framed thereunder prescribe exemption of tax on notified commodities secured by purchase within the State of West Bengal. The petitioners have submitted that the sale value is deductible in the instant case from the gross value of the notified commodity in ascertaining the sale price under the said Act. After accepting the same it does not lie on respondent No. 1 to serve a notice which would be contrary to the facts supported by records filed before it. The above commodities had been purchased within the State of West Bengal and after becoming powdered they do not lose their inherent character either commercially, statutorily or botanically and do not become a different class. As such it is not exigible to tax as a notified commodity manufactured, made or processed. There is no provision in the Act itself of charging tax over the commodities which are secured by purchase within the State of West Bengal to further tax only because it had undergone the process of powdering. Taking the example of a case where a party itself imports goods from outside West Bengal and pays tax could the said party be made liable to pay tax again for the same goods after it is powdered and sold in the market as there is no provision in the Act itself for the imposition of tax at two stages on the same set of notified commodity. The rules have prescribed exemption from tax on notified commodity secured by purchase within the State of West Bengal. So the imposition of tax on the same notified commodity after it has become powdered is, without jurisdiction, arbitrary and void. Hence the petitioners have come to take advantage of this speedy and effective efficacious remedy.
8. From annexure A to the petition it would appear that the names of the dealers, their addresses, bill number, date and amount of purchase and the tax paid have been fully set out which particulars had not only been submitted before respondent No. 1 but respondent No. 1 has accepted the same by completing the assessment for the said years. From the impugned notices it would appear that respondent No. 1 had stated thereunder
"I am satisfied on information...that you are liable to pay tax under the West Bengal Sales Tax Act, 1954, in respect of the period commencing from 1st of Baisakh, 1384, ending with last Chaitra, 1384 B. S."and proposed to assess the petitioners under Sub-section (3) of Section 9 of the West Bengal Sales Tax Act, 1954, to the best of his judgment in respect of the said period.
9. Various assessment orders have been annexed to the petition to show that the petitioners had been exempted from payment of tax on halud or haridra in the previous years. From the said assessment order it would appear that respondent No. 1 had accepted the sales tax cases of the petitioners that sales were made from the local market. Since the inception of the business the petitioners had been assessed up to 1384 B. S. and all these assessments exempt the petitioners from payment of any tax on notified commodities like turmeric and black and white peppers under the Bengal Finance (Sales Tax) Act, 1941, as also under the West Bengal Sales Tax Act, 1954.
10. According to Mr. Gopal Chakraborty, manufacturing, making and processing are synonymous. Moreover Mr. Chakraborty submitted that under the Act and the Rules framed thereunder a party is required to preserve its documents for a period of five years as per Rule 18 of the Sales Tax Rules. When that was the position, how would by a notice respondent No. 1 ask the petitioners to show cause for a period of twelve years. Moreover considering that the power of review to the assessing authority is given for a period of thirty days, whereas accepting the return of the petitioners and assessing the same and granting exemption could respondent No. 1 after twelve years reopen the cases holding that the petitioners were liable to pay taxes for powdering turmeric and black and white peppers? Moreover proceeding on the basis that the petitioners are not liable to pay tax the petitioners have not collected tax from the purchasers for powdered turmeric as also black and white peppers for the last 12 years. So any imposition of tax on them would have to be shouldered by the petitioners and not by the purchasers of the powdered commodities. The petitioners are neither dealer within the meaning of Section 2(b) of the West Bengal Sales Tax Act of 1954 nor maker, manufacturer or processor. Thirdly the petitioners' contention was that in view of the law of limitation respondent No. 1 should not be allowed to assess for the period beyond a period of three years. Lastly it was the petitioners case that respondent No. 1 was estopped from contending that the petitioners were liable to tax after exempting them from taxing in all the earlier years. Mr. Chakraborty referred to various cases.
11. Mr. S. Bhattacharyya appeared on behalf of the respondents and submitted that a notice had been given on the petitioners to show cause. Instead of giving explanation to the show cause the petitioners had rushed to this Court to get relief under Article 226 of the Constitution of India. The petitioners had not challenged the inherent lack of jurisdiction of the officer to serve a notice nor there is any allegation that there was violation of the provisions of the statute. Moreover there are complicated questions of facts as respondent No. 1 through affidavit has not admitted the facts as stated in the petition. The fact that the petitioners have made local purchases was disputed by respondent No. 1 in the affidavit-in-opposition. As such this Court should not turn itself into a fact-finding body. Mr. Bhattacharyya relied on the case of Mahabirprasad Birhiwala v. State of West Bengal reported in [1973] 31 STC 628. He further submitted that the provisions of the limitation act do not apply as no particular period was fixed by the Sales Tax Act for such assessment. As a result Section 29 of the Limitation Act has no application whatsoever in this case.
12. From the submissions made by the learned lawyers and also from the affidavits and the documents relied on by the parties it would appear that the petitioner was neither an importer nor a manufacturer of any of the notified commodities covered by the West Bengal Sales Tax Act, 1954. The petitioner's entire sales have been assessed under the Bengal Finance (Sales Tax) Act, 1941. The petitioner purchased the materials within the State of West Bengal upon which relevant taxes had also been paid. From the various assessment orders which have been relied on by the petitioner it would show that the authorities have in fact accepted the said position.
13. The relevant definition of "turmeric" has been given under the Act and the State Government by a notification dated 10th May, 1963 in exercise of powers conferred by Section 25 and Clause (b) of Sub-rule (i) of Rule 14 of the West Bengal Sales Tax Rules, 1954, brought turmeric within the ambit of the said Act. The dealer has been defined under Section 2(b) as any person who sells notified commodities manufactured, made or processed by him in West Bengal, or brought by him into West Bengal from any place outside West Bengal for the purpose of sale in West Bengal.
14. Mr. Gopal Chakraborty submitted that the commodities were/are regularly purchased and on which necessary taxes had been paid, only because the said commodities are powdered by the petitioner that method would not make them statutorily some different commodities. It is the petitioner's case that the petitioner had neither brought the said commodities within the State of West Bengal nor manufactured the same. According to Mr. Chakraborty powdering of turmeric did not fall within the definition of processing or manufacturing. If the petitioner was asked to pay the taxes on the said powdered commodities again virtually it would amount to payment of taxes twice over on the same commodities. By making turmeric powder, the identity and/or characteristics of the commodities are not changed. The entire materials had been taxed when brought into West Bengal by payment of taxes at the entry point. As the entire scheme of the Bengal Act is to levy tax on one single point, it could not be used for the purpose of collection of taxes over again for the same commodities. The commodity which is liable to be taxed under the West Bengal Sales Tax Act, 1954, ceases to be taxable under the general sales tax law. Under the said notification the definition of "turmeric" includes whole, broken, ground or powdered or any other form or description. Hence the turmeric does not become a new commodity after the same is powdered.
15. The petitioner had been assessed for the years 1373 to 1384 B. S. under the Bengal Finance (Sales Tax) Act, 1941, after taking into consideration the returns after verifying the documents, vouchers and only after the authorities were satisfied that the said commodities had been purchased from the local market within the State of West Bengal. Hence the petitioner was held not to be liable to pay any tax under the West Bengal Sales Tax Act, 1954. It is an admitted fact that the turmeric had been purchased from the State of West Bengal and since the purchase they had been powdered by the petitioner and by powdering the same the inherent character either commercially or botanically have not become a different character. Hence it was not taxable as a notified commodity, manufactured or processed. The Act did not make any provision for taxing the commodities which were secured by purchase within the State of West Bengal. Rules prescribed exempt from tax of notified commodities secured by purchase within the State of West Bengal. From annexure A it would appear that the names of the dealers, their addresses, bill Nos., the amount of purchase and the tax paid on the same had been duly set out, which particulars have been duly accepted by the respondents by. completing the assessment for the said years relying on the said particulars. Hence it would appear that the respondent had accepted the fact that the sale have been effected from the local market within the State of West Bengal and in fact the petitioner had been exempted for payment under the Bengal Finance (Sales Tax) Act, 1941 and also the West Bengal Sales Tax Act, 1954, on the said commodities.
16. Under the Rules framed under the Act an assessee is required to preserve documents for a period of five years. Now the petitioner had been asked to show cause for a period of 12 years. Moreover it would appear that the power of review given to the assessing authority is confined to a period of 30 days. Applying the said rules in the present case, it would appear that the petitioner had filed his return regularly and the assessing authority had accepted the said returns and assessed the petitioner regularly. It is not open after 12 years to reopen the said case on the part of the assessing authority. It is also noted that relying on the said assessments made by the respondents the petitioners in their turn have not collected any taxes from the purchaser of powdered turmeric for the last 12 years. The petitioners do not become dealers and/or manufacturers under Section 2(b) of the West Bengal Sales Tax Act, 1954, as they are not makers, manufacturers or processors of the noti9ed commodities. So far as Mr. Gopal Chakraborty's point of limitation is concerned, I am unable to accept his contention that in view of the fact that there is no period of limitation provided, under the Act itself, the residuary clause of the Limitation Act would be applicable in this case. In view of the fact that the entire purchase made by the petitioner had been made within the State of West Bengal which fact was not disputed by the respondents, on the contrary which had been accepted by the respondents by making various assessments and collecting taxes from the petitioner I am unable to accept the contention of Mr. Bhattacharyya that there were serious dispute as to the factum and validity of the submissions that the entire purchases had been made in the State of West Bengal. Moreover it would appear that at the time of issuance of the said notice the Commercial Tax Officer did not have sufficient materials on the basis of which such notice could be issued. Hence the issuance of the said notice was bad as the provision of Section 9, Sub-section (3), of the said Act had not been satisfied.
17. As indicated above if the petitioners were made liable to pay taxes then it would amount to imposition of taxes at more than one point which is against the principles of taxation under the West Bengal Sales Tax Act, 1954. The petitioners do not become dealers under Section 2(b) of the West Bengal Sales Tax Act, 1954, as I am of the view that the petitioners have not manufactured, made or processed the notified commodities in West Bengal, neither the petitioners brought the said commodities from outside West Bengal for the purpose of sale in West Bengal as it was an accepted fact that the petitioners have made the purchases in the State of West Bengal.
18. "Dealer" includes two categories of persons (i) who sells notified commodities by manufacturing, making or processing them, that is, the notified commodities, either been produced by manufacturing, making or processing the notified commodities, (ii) one who sells the said commodities after importing the same in West Bengal from outside West Bengal. There is no evidence on record whatsoever that the petitioners were either importers of the notified commodities in the State of West Bengal or that the petitioners had manufactured, made or processed the notified commodities. By adopting the method of powdering the the whole turmeric which has been purchased by the petitioners in West Bengal, the petitioners do not manufacture, make or process the different commodities. In substance, after the same had been powdered, the entire materials remain the same, only the form is changed. From the various examples of the manufacturing, making and processing, as given in case of soap, biscuits, matches, lozenges, indicate that the Government did not comtemplate by its notification to include turmeric powder. Considering the various forms given under the West Bengal Sales Tax Act, it does not indicate that the dealer who makes local purchase of turmeric become the manufacturer, maker or processor if he grinds the said whole turmeric into powder. Hence he cannot be held to be manufacturer, maker or processor of any notified commodities. The said notice is again not in conformity with the various provisions of the said statute. I am unable with great respect to accept the judgment delivered by the learned Judge in Mahabirprasad Birhiwala's case reported in 1974 Tax LR 1728. In view of the provisions of the Act and of the Rules and notification framed thereunder it would appear that the object of the said Act was not to tax the commodities at different points. It appears that the relevant notification as also the provision of Rules of the said Act had not been placed before the learned Judge.
19. The said judgment did not consider that a dealer as in the instant case, will have to pay tax even when he made purchases locally. In that particular case there was no evidence of any local purchase of notified commodities and selling of the same after powdering the same. From forms IIIA, III, X and Section 23A of the West Bengal Sales Tax Act, 1954 and Section 5(l)(aaa) of the Bengal Finance (Sales Tax) Act, 1941, it appears that it was not the intention of the said notification to include powdered turmeric. From the definition it would appear that the Goverment did not contemplate that the turmeric would be considered a different commodity after it is powdered.
20. Amendment of Section 9 by inserting Sub-section (3A) introduced a period of limitation as assessment and determination must be completed within 48 months from the end of the accounting year. In view of what has been stated above I am of the view that the notice of assessment is not warranted by law. Taking into consideration that all the necessary materials were before the authorities who had completed the assessments and on the face of such materials the respondents decided not to tax the petitioners of such materials the respondents had assessed and imposed taxes on the petitioner which have been complied with. Hence the respondent cannot review their own assessments after 12 years on the same materials which were placed before the assessing authority when they held that the petitioners were not liable to pay any tax thereon. It would amount to miscarriage of justice if the respondents were permitted to do so. Hence I make the rule absolute.
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