CHANDI CHARAN SARKAR Vs. COMMERCIAL TAX OFFICER

JUDGEMENT

(1.) The petitioner is a registered dealer in pachwai under the Bengal Finance (Sales Tax) Act, 1941. Country liquor including pachwai was exempted from taxation under the said Act being included in its exemption list: item 25 of Schedule I. By the West Bengal Taxation Laws (Amendment) Act, 1972, Section 3, Sub-section (5), which came into force on 7th August, 1972, item No. 25 of Schedule I to the Bengal Finance (Sales Tax) Act, 1941, was deleted, as a result whereof sale of pachwai became liable to sales tax at the rate of 6 per cent and surcharge at 2 per cent on sales tax.

(2.) The petitioner was selling pachwai on the basis of a licence granted by the Collector, Birbhum and Clause (9) thereof provided that they would sell pachwai in accordance with the price as would be fixed by the Excise Commissioner. In view of the Imposition of sales tax on pachwai as aforesaid the petitioner became liable to pay sales tax on the sale of pachwai but he was not in a position to recover the same from his customers under the terms of his licence. The result was that he was made to pay sales tax and surcharge, according to him, out of his own pocket. This, he contended, was a restraint in trade and was void. Reliance was placed on the decision of Calcutta Country Spirit Opium and Drug Association Ltd. v. State of West Bengal [1974] 34 S.T.C. 161, in which A. K. Sen, J, was of the opinion that this imposition of tax at 6 per cent against profit varying from 5.7 to 7.8 per cent on country spirit directly restricted and impeded the free flow of trade and the requirement under Article 304(b) was not complied with. It was accordingly held by his Lordship that Section 3(5) of the West Bengal Taxation Laws (Amendment) Act, 1972, which brought country spirit amongst other articles to the incidence of tax was ultra vires the Constitution. In the case before us, the sales tax was introduced on sale of pachwai by the same Act under the provisions of Section 3(5) of the West Bengal Taxation Laws (Amendment) Act, 1972, which was under consideration in the cited case.

(3.) Mr. Dutt, the learned Advocate appearing for the respondents, has drawn my attention to the West Bengal Excise (Amendment) Ordinance, 1974 (4 of 1974), which provides to explanation to Section 86 for an additional explanation as explanation II in the said Bengal Excise Act, 1909. The explanation II is as follows :