BHARAT TRADERS Vs. COMMERCIAL TAX OFFICER

JUDGEMENT

(1.) This Rule is directed against a notice dated 15th June, 1970, issued by the Commercial Tax Officer, Siliguri, under Section 20A of the Bengal Finance (Sales Tax) Act, 1941, hereinafter referred to as the Act. It has been alleged in the notice that in the returns for the first, second and third quarters of the Ratha Jatra years 2026-2027 S.Y., the taxable sales on account of sales of containers sold along with Schedule I goods have been concealed, leading to the under-statement of the taxable sales.

(2.) The petitioner is a registered dealer under the Act. The petitioner submitted returns of its turnover for the aforesaid period corresponding to 16th June, 1969, to 15th June, 1970. In these returns, the petitioner has shown the entire sale price of mustard oil sold in sealed containers for the relevant period in Clause (i) of the returns and claimed deduction of the entire sale price of mustard oil under Clause 3(i) of the returns. The copies of the returns have been annexed to the writ petition and marked collectively with the letter "A". Thereafter, the said notice under Section 20A of the Act was served upon the petitioner. Pursuant to the said notice, the petitioner's Advocate appeared before the Commercial Tax Officer and submitted that there was no sale of containers on account of sale of mustard oil in sealed containers and, as such, the petitioner was not under any statutory obligation to include the price of the containers in the taxable turnover, nor could there be any question of concealment or non-inclusion of the price of containers used for the purpose of selling mustard oil. The Commercial Tax Officer was, accordingly, requested not to proceed with the said notice. The said contentions made on behalf of the petitioner were rejected by the Commercial Tax Officer and the hearing of the penalty proceeding was fixed on 9th September, 1970. The petitioner has questioned the validity and legality of the impugned notice and challenged the jurisdiction of respondent No. 1, the Commercial Tax Officer, to initiate the penalty proceeding.

(3.) Respondents Nos. 1 to 3 have opposed this Rule and have filed an affidavit-in-opposition. The said respondents have also filed a supplementary affidavit. In the supplementary affidavit, it has been stated that a proceeding under Section 14(1) of the Act was started by the Commercial Tax Officer on 19th May, 1970 and a notice under that Section was issued to the petitioner on 20th May, 1970. By the said notice, the petitioner was asked to appear and to produce books of account relating to the period from 1st July, 1969, to 14th March, 1970, with a quantitative analysis of containers sold by the petitioner along with tax-free goods specified in Schedule I of the Act. The date of hearing was adjourned and ultimately on 8th June, 1970, one Mr. G.L. Bubna appeared before the Commercial Tax Officer, who passed the following orders : Shri G.L. Bubna appeared. On examination of the books of account and documents it was found that the dealer sold the following containers along with Schedule I goods. <FRM>JUDGEMENT_206_STC39_1977Html1.htm</FRM> The value of tins (1,26,498) at Rs. 4, the rate fixed by the Siliguri Merchants' Association would be Rs. 5,05,992.00 and of bags (307) at Re. 1, the rate fixed by the Siliguri Merchants' Association, should be Rs. 307.00. Thus the dealer has understated his taxable sales in the return for the relevant period to the extent of Rs. 5,06,299.00 involving tax of Rs. 28,107.15. For submitting the false returns proceedings under Section 20A are being started separately.