Court denies tax exemption for sales to Cooch Behar pre-merger. Rule 3(19) doesn't apply to other West Bengal dealers.

The Court ruled against the assessee in a case involving sales tax exemptions for sales made to Cooch Behar before its merger with West Bengal. The Court held that goods despatched to Cooch Behar after the merger were not eligible for tax exemption under section 5(2)(a)(v). Additionally, the Court determined that rule 3(19) of the Bengal Sales Tax Rules did not grant fundamental rights to dealers in other parts of West Bengal, denying the assessee's claim for additional relief under the rule.

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Issues:
1. Whether sales made to Cooch Behar before the Act was extended are exempt from sales taxRs.
2. Whether a substantive right to exemption was granted under rule 3(19) of the Bengal Sales Tax RulesRs.

Detailed Analysis:

Issue 1:
The case involved a reference under section 21(3) of the Bengal Finance (Sales Tax) Act, 1941, regarding sales made by the assessee to Cooch Behar before the Act was extended. The assessee claimed deduction under section 5(2)(a)(v) for sales made to dealers in Cooch Behar. The Commercial Tax Officer disallowed the deduction, and subsequent appeals were unsuccessful. The main contention was whether goods despatched to Cooch Behar after it merged with West Bengal could be considered as despatched outside West Bengal for tax exemption purposes. The Court held that once Cooch Behar merged with West Bengal, any goods despatched to Cooch Behar were considered as despatched within West Bengal, thus not eligible for exemption under section 5(2)(a)(v).

Issue 2:
The introduction of rule 3(19) in the Bengal Sales Tax Rules provided relief to Cooch Behar dealers for sales of goods purchased from the rest of West Bengal before a specified date. The assessee argued that since Cooch Behar dealers were exempted from tax, they should also receive corresponding relief for sales made to them. The Court agreed that the rule was enacted to prevent double taxation for Cooch Behar dealers and did not grant any fundamental rights to dealers in other parts of West Bengal. Therefore, the assessee was not entitled to any additional relief under rule 3(19) for sales made to Cooch Behar.

In conclusion, the Court answered both questions in the negative, ruling against the assessee. The judgment clarified that goods despatched to Cooch Behar after its merger with West Bengal were not considered as despatched outside West Bengal for tax exemption purposes. Additionally, the Court affirmed that rule 3(19) was specifically for the benefit of Cooch Behar dealers to prevent double taxation and did not extend relief to dealers in other parts of West Bengal.

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