KHARDAH CO LTD Vs. STATE OF WEST BENGAL

JUDGEMENT

(1.) The appellant, Messrs. Khardah Co., Ltd., (hereinafter referred to as "the company") is a dealer, inter alia, in jute and jute goods. During April. 1948 and March, 1949, the Company sold gunnies worth over Rs. 10/- lacs to the Government of India, It claimed that the transaction was exempted from sales-tax under the provisions of Section 5 (2) (iii) of the Bengal Finance (Sales Tax) Act. 1941. The Assistant Commercial Tax Officer overruled the contention and assessed the transaction to sales-tax amounting to Rs. 47,802-8-3. Against the assessment, the Company went up in appeal before the Commissioner of Commercial Taxes. The appeal was dismissed on 22nd March, 1951. Thereupon, certificate proceedings were started under the Bengal Public Demands Recovery Act, being Certificate Case No. 80 S.T.B. of 1951-52, and notice under Section 7 of the Act was served. Actually no objection was filed under Section 9 but sometime in July, 1951 the Board of Revenue stayed the matter because there was another matter which was pending before the Supreme Court in which the same point had arisen, namely, as to whether such transactions were exempted from the payment of sales-tax. It appears that this was done at the instance of the company. In fact, the Company at various times had asked for stay of proceedings. The Supreme Court ultimately held that such sale transactions are not exempted from sales tax under Section 5 (2) (iii) of the Bengal Finance (Sales Tax) Act, 1941. Thereupon, the appellant was called upon to pay the amount. On 23-10-1956, the appellant paid the said amount of Rs. _47,802-8-3 by cheque but nothing was paid towards interest, charges and costs. On the very same day, the Certificate Officer made the following order: "Treasury challan for full sales tax received. Ask C. D. to pay up cost and interest (after calculation) and put up on 23-1-57". I have called for and looked into the original order-sheet and it appears that thereafter on numerous occasions the appellant was called upon to pay the interest and costs but it never made any payment. At first it made objection as to the form of the notice and then went up to the Board of Revenue and so forth and this explains the very great delay that has occurred in the realisation of the same. Finally, all these objections having been ruled out, the appellant made an application to this Court on August 18, 1960 and on 24th August, 1960, a Rule was issued calling upon the opposite parties to show cause why they should not be prohibited from realising the amounts of interest and costs or from taking any proceeding in respect thereof. This is the application which came up before Mr. Justice Banerjee, who dismissed the application and discharged the rule by an order dated 6th December, 1962. It is against this order that the appeal has been directed.

(2.) There is only one point that is urged before us and that is as follows: There is no dispute that the original certificate amount that is mentioned in the certificate was Rs. 47,302-8-3. In the certificate there was no mention of interest or cost. The usual notice under Section 7 was issued but there the matter stood because of the various stay orders. Interest and costs are provided for under Section 16 of the Public Demands Recovery Act (hereinafter referred to as "the said Act"). The provisions thereof are set out below:

(3.) The result is that, although our reasoning is not identical with the Court below, the conclusion is the same. The appeal is consequently dismissed. There will he no order as to costs.