RASOI LIMITED Vs. STATE OF WEST BENGAL

JUDGEMENT

(1.) THESE are mostly applications under section 8 of the West Bengal Taxation Tribunal Act, 1987, numbered as RN-10 to 13, 15, 90, 259 and 282 to 285 of 1990. RN-213 (T) of 1990 was received upon transfer from the High Court under section 15 of the said Act. Except RN-90 and 213 (T), all other cases were heard analogously, as common constitutional questions are involved. Although not strictly analogously, RN-90 and 213 (T) of 1990 were also heard along with the other cases, since the questions involved in these cases are no different. During hearing of all the cases it was agreed and understood by the learned Advocates for the applicants and the learned State Representative that these applications will be decided by a common judgment. The points which arise for determination in all these applications are - whether the State Legislature was competent to enact clause (ii) of sub-section (6) of section 4 of the Bengal Finance (Sales Tax) Act, 1941, and clause (i) of sub-section (2) of section 4 of the West Bengal Sales Tax Act, 1954, as inserted by West Bengal Act 23 of 1977 with effect from October 10, 1977, and whether the said provisions in the said two Acts as amended by the West Bengal Taxation Laws (Amendment) Act, 1990 and also sub-sections (2a) and (2b) of section 26a of the 1941 Act and section 28 of the 1954 Act, inserted by the West Bengal Taxation Laws (Amendment) Act, 1990, are constitutionally valid. Vires of the relevant rules framed for carrying out the purpose of 1990 amendments is also under challenge.

(2.) THE case of the applicants may be summed up thus : In RN-10 of 1990, Rasoi Ltd. is the first applicant. The applicant No. 2 is the Managing Director of the company, who is also a shareholder. The company is a registered dealer under the West Bengal Sales Tax Act, 1954 and the Central Sales Tax Act, 1956. It carries on the business of manufacturing vanaspati, soap and allied products for sale. The company has a wide network of distributors of its products throughout India. It has also a large number of consignment agents and branches all over India. It despatches goods manufactured in the State of West Bengal to different places outside the State on consignment basis or on branch transfer basis. The company makes purchases of vegetable non-essential oils (briefly called V. N. E. oils) of various descriptions and other goods within and outside the State of West Bengal for use as raw materials in the manufacture of the said finished products in West Bengal. A purchase tax was levied under the amended provisions of the 1954 Act and the Bengal Finance (Sales Tax) Act, 1941, at the rates and for the periods mentioned below :

(3.) THE further case of the applicant is that the ratio of the decision of the Supreme Court in the case of Goodyear India Ltd. [1990] 76 STC 71; AIR 1990 SC 781, is that the State Legislature has no competence to enact any law imposing sales tax if the goods are transferred on consignment basis outside the concerned State. The Supreme Court laid down the above law overruling the decisions of all other courts which had held otherwise and the decision is binding on all courts and authorities under article 141 of the Constitution of India. In view of the said decision, applicants realised that the amounts were paid or recovered out of mistake, and it is the respondents' duty to forthwith refund those amounts whether assessments have or have not been made. Applicants also claimed an interest at the rate of 2 per cent per month in respect of the amounts so paid. They wrote a letter to that effect to the respondents on January 20, 1990.