GEM AND CO Vs. STATE OF WEST BENGAL

JUDGEMENT

(1.) The petitioner in this case is Gem and Co. In the petition it is stated that the petitioner is a firm having its business premises in Old China Bazar Street and that Sri Kali Charan Saksena is its proprietor.

(2.) We next come to the names of two other business concerns. The first is the "West Bengal Paper House Private Limited". It is stated in the petition that this company was established in 1948 with Saksena as one of the founder-directors. The next business with which we are concerned is "Sri Kali Paper Mart". It is stated in the petition that this is the personal business of Saksena and was established in 1953. All these concerns carry on business in paper. In the petition it is stated that Gem & Co. was not concerned in the matter of sale of any goods, because all that it did was to obtain financial facilities for these two concerns. Even on the facts as stated in the petition, the entire case made out is complicated enough. It is said that Saksena used to hypothecate goods with banks in the name of the petitioner-firm, although the goods belonged to the other two concerns, but without there being any sale or purchase of goods. These complicated and disputed facts cannot obviously be gone into by me in this application. Fortunately, it is also not necessary, in view of the stand taken on behalf of the petitioner.

(3.) In August, 1957, in the course of investigation of the assessment case of the West Bengal Paper House Private Limited and Sri Kali Paper Mart, some books of account of Gem & Co. were seized by the Commercial Tax Authorities. These books were examined by the Commercial Tax Officer between 30th October, 1957, and 27th February, 1958, in the presence of the authorised representative of the petitioner. It has been stated in the affidavit affirmed by Rabi Kiran Mukerjee dated the 31st July, 1959, that upon such examination it was found that the petitioner's gross turnover had exceeded the taxable quantum of Rs. 50,000 on the 24th day of October, 1955. That fact was recorded in the order sheet of the Commercial Tax Officer, and a copy of it has been set out in paragraph 4 of the said affidavit. The original has also been produced for inspection by the Court. It will appear from the findings embodied therein that with regard to the assessment year, January, 1955, to December, 1955, the taxable quantum of Rs. 50,000 was reached at least on the 24th October, 1955. Under Section4 of the Bengal Finance (Sales Tax) Act, 1941, it is provided that in a given year if the gross turnover exceeds the taxable quantum, then upon the expiry of two months from the date on which this happens, that is to say, when such gross turnover first exceeds the taxable quantum, sales tax becomes payable. In this case, it is admitted that the taxable quantum is Rs. 50,000. Thus the taxable quantum having been reached on the 24th October, 1955, the tax became payable on the 24th December, 1955. According to Section 7 of the said Act, a dealer is not permitted to carry on business under such circumstances without registration. In this particular case, the petitioner carried on business but did not register itself. The consequences that follow under the Act in such circumstances are to be found in Section 11. The particular provision which applies to the facts of this case is Sub-section (2) of Section 11. The relevant part thereof is set out below :-