HESANADHI JAY INDUSTRIES Vs. COMMERCIAL TAX OFFICER

JUDGEMENT

(1.) BY the instant application the applicant No. 1, a partnership firm, challenges levy of purchase tax on purchase of jute sticks. The firm manufactures jute -stick -dust out of jute sticks purchased from cultivators. As a dealer registered under the Bengal Finance (Sales Tax) Act, 1941 (in short, "the 1941 Act"), the firm was assessed for four quarters ending March 31, 1988. The assessing officer (the respondent No. 1), apart from enhancing the gross turnover, estimated taxable specified purchase price (SPP) under Section 4(6)(i) of the 1941 Act at Rs. 79,978 and demanded Rs. 3,198.90 as purchase tax including interest thereon and also imposed penalty of Rs. 300. Appeal against the assessment having been filed, the appellate authority (respondent No. 2), though modified the assessment order and reduced the penalty amount, affirmed the levy of purchase tax on the applicant. Against this appellate order the firm filed a revision application before the West Bengal Commercial Taxes Appellate and Revisional Board (in short, "the Board") making specific assertion that jute stick falls under entry No. 32 of Schedule I of the 1941 Act and hence is not exigible to sales tax and is also not subject to purchase tax in view of the provisions of Section 6D(2)(b) of the said Act. But the Board rejected the applicant's plea in that regard. The instant application before this Tribunal has, therefore, been filed by the applicant -firm challenging in particular the levy of purchase tax on the purchase of jute stick and the assessment of interest on such purchase tax.

(2.) IN their affidavit -in -opposition the respondents dispute the firm's plea that jute stick is covered by entry No. 32 of Schedule I. According to them, purchase of jute stick from unregistered dealer for manufacturing purpose brings such transaction within the ambit of Section 4(6)(i) and hence such purchases are exigible to purchase tax. Their further contention is that since without any logical basis the firm withheld the payment of purchase tax on purchase of jute stick, it (the firm) cannot evade the liability to pay interest.

(3.) WE do not propose to go to the first issue because in our opinion the decision of the second issue will be sufficient to dispose of the application as is before us. We, therefore, take up the second issue for a decision. In terms of Sub -section (6) of Section 4 of the 1941 Act purchase tax is leviable on three distinct types of purchase of goods [other than those enumerated in clause (i) of the Sub -section (6) of Section 4]. According to Section 4(6) the purchase tax is attracted whenever a goods is :