TaxTMI 
TaxTMI 
1990 (2) TMI 282
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.... different countries in the world and come back to India. The applicant never carried on and does not even now carry on the business of buying and/or selling goods or any other product and as such, was never liable to pay sales tax under the different Sales Tax Acts in force in West Bengal. In view of the definition of "dealer" in section 2(b) of the West Bengal Sales Tax Act, 1954 (hereinafter called "the said Act"), the respondent No. 2 (Commercial Tax Officer, Esplanade Charge), has been contending that the applicant while selling the ships which have become worn-out and are treated as condemned, becomes a dealer within the meaning of the amended provision of section 2(b) of the said Act. The applicant was accordingly required to apply for registration as a dealer under the said Act. The applicant complied with the requisition which was allowed on 8th December, 1987. 3.. The applicant owns ships for the purpose of its business which are liable to be registered under the Merchant Shipping Act, 1958. In view of the notification issued under section 25 of the said Act such ships have been declared as notified commodities under Schedule II of the Act. 4.. On or about 2nd Febru....
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....nder and in pursuance thereof. The applicant has also made a prayer for interim orders. 5.. The application was initially filed in the High Court under article 226 of the Constitution of India. The applicant obtained an interim order as prayed for, which was extended after the transfer of the application to this Tribunal vide our orders dated 22nd May, 1987 and 29th May, 1989. 6.. The respondents opposed the prayer by filing an affidavit-inopposition, sworn by the Commercial Tax Officer, Esplanade Charge. In the affidavit-in-opposition the case made out, is briefly as follows: In course of its main business, the applicant also carries on the business of selling ships which have lost their seaworthiness, and as such, are liable to be condemned. The applicant brings into West Bengal the condemned ships and vessels and other notified commodities from outside West Bengal and upon considering the fact that a particular ship or vessel has become worn-out and liable to be condemned, sells the same in West Bengal. The fact that the ship has become unseaworthy gets revealed in course of the last voyage when it is brought into West Bengal and thereafter is disposed of by way of sale....
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....ns that after the arrival of the vessels in West Bengal it is found that a particular vessel has lost its utility and/or seaworthiness or has suffered such damages during the voyage that it is economically and commercially not worth while to effect any repairs. Such vessels are sold after inviting tenders therefor. The vessels sold during the relevant period are shown in annexure "A". What is sold, however, is not a ship but merely a scrap to which the ship is reduced. It is denied that any condemned ship or vessel is brought by the applicant from outside the State and thereafter sold in West Bengal or a decision to bring ships which have become unseaworthy into the State of West Bengal is taken by the applicant on the high seas. It is reiterated that prior to the Amendment Act of 1987, public sector undertakings were outside the purview of the term "dealer " within the meaning of section 2(b) of the said Act. 9.. The major part of the affidavit-in-reply is a mere repetition of their case as set out in the main writ application. In annexure "A" of the affidavit-in-reply, however, it is stated that three vessels, namely, MAYA, JYOTI and RAKSHA arrived at Calcutta Port on differen....
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.... of accounts so that he may not have to make a best judgment assessment. This is the factual position so far as the notice is concerned. Let us now examine whether in such a situation the applicant should be thrown out of court on the ground that the application is premature. In support of the contention that it is so, Mr. Ghosh referred to the case of Champalal Binani v. Commissioner of Income-tax reported in [1970] 76 ITR 692 (SC); (1971) 3 SCC 20. It was indeed held in that case that a writ of certiorari is discretionary in nature and should not be issued merely because it is lawful to do so. In that case it was found as a fact that three copies of notices under section 33B of the Income-tax Act were issued to the assessee at three different addresses, two of which were furnished by the assessee in its return. Under the provisions of section 33B, the Commissioner may call for and examine the record of any proceeding under the Act. He may after giving the assessee an opportunity of being heard, pass order thereon as the circumstances of the case justify. It is further provided that such order has to be made within two years from the date of the order sought to be revised. It was ....
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....nt of fundamental rights arise, or where on undisputed facts, the taxing authorities are shown to have assumed jurisdiction which they do not possess. In attempting to bypass the provisions of the Income-tax Act by inviting the High Court to decide questions which are primarily within the jurisdiction of the revenue authorities, the party approaching the court, it was held, has often to ask the court to make assumptions of facts which were meant to be investigated by the revenue authorities. This decision might have been of some assistance to the respondents if the authorities had merely issued a notice to show cause why the applicant should not be treated as a dealer liable to pay sales tax. But it appears that the authority issued the notice under section 9 upon a factual satisfaction that the applicant was so liable and invited documents to be produced which, if not produced, would entitle the authority to make a best judgment assessment. It is true that on the decision rendered in [1964] 51 ITR 823 (SC); AIR 1964 SC 1095 (Shivram Poddar v. Income-tax Officer), it is not for the court to make any assumption of facts. The facts are required to be cleared at the hearing in respons....
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....be made and then to proceed in appeal and revision provided by the Act. 14.. The next case relied on by Mr. Ghosh is the case of Titaghur Paper Mills Co. Ltd. v. State of Orissa, reported in [1983] 53 STC 315 (SC); [1983] 142 ITR 663 (SC). The facts of that case were entirely different. There in course of assessment proceedings the assessee asked for adjournments from time to time. On refusal of further adjournment, an assessment of gross turnover without giving deduction for sales to registered dealers and departments of Government was made. It was held that the assessment orders clearly indicated that the petitioners were afforded sufficient opportunity to place their case and that merely because the Sales Tax Officer refused to grant any further adjournment and proceeded to assess to the best of his judgment, it could not be said that he acted in violation of rules of natural justice. The question whether another adjournment should have been granted or not was within the discretion of the Sales Tax Officer and was a matter which could be properly raised only in an appeal. The Act provides for an adequate safeguard against an arbitrary or unjust assessment. The petitioners ....
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....ific remedy provided by the Act itself. Therefore, the case stands even on a stronger footing than the one referred to by Dr. Pal. 17.. Dr. Pal also referred to the Bengal Immunity case, reported in [1955] 6 STC 446 (SC). It may be convenient in order to properly appreciate the decision rendered, to study the salient facts of the case. The appellant-company was carrying on the business of manufacturing and selling of certain goods and had its registered office and factory in West Bengal. It had neither any agent or manager in Bihar nor any office or godown in that State. The appellant despatched goods from Calcutta against orders accepted by it in West Bengal. The Bihar Sales Tax authorities were of the view that the sales made by the appellant in West Bengal in which goods had been delivered in Bihar as a direct result of the sale, were liable to Bihar sales tax. The assessing officer of Bihar, therefore, issued a notice to the appellant calling upon it to get itself registered as a dealer under the Bihar Sales Tax Act, to submit the return and to deposit the tax due in a treasury in Bihar and further stated that in default of compliance, he would proceed to make a best judgmen....
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....e 226 of the Constitution of India challenging the validity of a notice if the notice was issued without jurisdiction or in excess of jurisdiction. Mr. Ghosh, appearing for the respondents, submitted that the authority while issuing the notice under section 9(3) of the 1954 Act, was competent to issue such a notice and that the action taken could not be challenged by a writ application at that stage, while Dr. Pal submitted that the authority issuing the notice had already formed an opinion as to the liability without any substantial basis for formation of such opinion and consequently the notice that was ultimately issued was, if not entirely without jurisdiction, certainly in excess of his jurisdiction. It was, therefore, submitted on behalf of the applicant that the writ application was competently filed and entertained by the High Court. 20.. We have already found that the applicant was directed to apply for registration which they did possibly in order to avoid harassment. It is significant to note that registration was granted on 8th December, 1987 and the impugned notices were simultaneously issued on the very same date. From the language of the notice itself and from the....
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....as so registered on 8th December, 1987. The registration was done and the notices were issued almost simultaneously. This fact was not in dispute. 23.. Dr. Pal in support of his claim that no tax was leviable against the applicant in respect of the sales effected as per annexure "A" referred to above, contended that the applicant did not come within the meaning of "dealer" as defined in section 2(b) of the 1954 Act. The definition of the term "dealer", as contained in section 2(b), is reproduced below: "(b) dealer' 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 the Central or a State Government, a local authority, a statutory body, a trust or other body corporate, a liquidator or a receiver appointed by a Court in respect of a person defined under this clause as a dealer; Explanation.-Where notified commodities are brought into West Bengal from any place outside it, the person who takes delivery or on whose behalf delivery is taken shall be deemed to have brought them into West Bengal;" The con....
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....xpression "dealer" as it stood previously also included the applicant. The definition begins with the words "dealer means any person..........." The applicant has categorically said in his main writ application that it is an existing company under the Companies Act. According to the Bengal General Clauses Act, 1899, unless there is anything repugnant in the subject or context, the expression "person" shall include any company or association or body of individuals, whether incorporated or not. The expression "person" has nowhere been defined in the 1954 Act. There is no question of repugnancy in adopting the meaning of the expression as defined in section 3(32) of the Bengal General Clauses Act which is as above. Therefore, the applicant being a company, falls within the category of "any person". 24.. It is nobody's case that the applicant manufactured, made or processed any notified commodity in West Bengal. But the provision with the aid of which the applicant is sought to be brought within the ambit of the definition is that it brought into West Bengal from outside the State notified commodities, namely, the ships, for the purpose of sale in West Bengal. This is a point which ....
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....ok place thereafter after inviting tenders from intending buyers. It will bear repetition that the dominant purpose for bringing the ships to the port of Calcutta was to carry the cargo meant for the port. Thereafter the decision of sale was taken, may be for non-availability of certificate of fitness or seaworthiness of the vessel or for some other considerations. Having regard to the principal object, namely, the carrying of cargo and discharging the same at the port, it may not perhaps be proper to conclude that the ships were brought for the purpose of sale. The bringing of the ships was not for the purpose of sale but the sale might have been necessitated due to some intervening circumstances. That being so, it is not possible to hold that the ships were brought for the purpose of sale. Unless it is proved that they were brought with that purpose, the eventual sale resulting from some other circumstances, will not justify an inference that they were brought "for the purpose of sale". If that is so, then the second limb of the definition is not attracted to the facts of the case and the applicant cannot be called a dealer, who has brought notified commodities for the purpose of....