LAWS(CAL)-1989-6-14

SIMA BANERJEE Vs. ASSISTANT COMMISSIONER OF COMMERCIAL TAXES

Decided On June 30, 1989
SIMA BANERJEE Appellant
V/S
ASSISTANT COMMISSIONER OF COMMERCIAL TAXES Respondents

JUDGEMENT

(1.) A short but important question involving interpretation of rule 3 (66) of the Bengal Sales Tax Rules, 1941, has been raised in this case.

(2.) APPLICANT No. 1, Sima Banerjee, is the proprietress of M/s. Uniplast Industries, in which plastic goods are manufactured. Applicant No. 2, Tapas Chatterjee, is the constituted attorney of the first applicant. The first applicant is a registered dealer under the Bengal Finance (Sales Tax) Act, 1941 (hereafter called "the BFST Act" ). She obtained registration of her unit as a small-scale industrial unit under the Directorate of Cottage and Small-scale Industries, Government of West Bengal. In short, her case is that she had obtained eligibility certificate under rule 3 (66) of the Rules framed under the BFST Act (hereafter called "the BST Rules") up to March 31, 1984, the first date of sale having been accepted as August 14, 1980. Under the said rule she claims to be entitled to exemption and consequently eligibility certificate therefor up to August 14, 1985, i. e. , for five years from the first date of sale. She had applied for renewal for the period from April 1, 1983 to March 31, 1984, on August 21, 1983, and had fulfilled all the conditions for being granted the eligibility certificate (hereafter called "the E. C. " ). The prayer was rejected with effect from December 7, 1983 to March 31, 1984, but granted for the period from April 1, 1983 to December 6, 1983. The E. C. was rejected for the said period on the ground that on and from December 7, 1983, she had exceeded the investment limit under rule 3 (66), which was at the time Rs. 20 lakhs. The cost of generator set and moulds purchased by the applicant was taken into account while calculating the investment limit. (The investment limit was, however, raised to Rs. 35 lakhs with effect from March 18, 1985 ). Against the aforesaid rejection the applicant moved the Calcutta High Court in an application under article 226 of the Constitution of India, which was disposed of on June 1, 1988, by Bhagawati Prasad Banerjee, J. , a xerox copy of whose order is made annexure C to the application before us. Under that order the first applicant got the E. C. for the period from December 7, 1983 to March 31, 1984. The Assistant Commissioner of Commercial Taxes rejected the prayer of renewal of the E. C. for the period from April 1, 1984 to March 31, 1985, by an order dated March 8, 1989, made annexure D, on the same ground that the cost of generator and moulds should be included in the cost of "plant and machinery" and that being done, the amount of investment came to more than the limit of Rs. 20 lakhs. A revision was filed under the provisions of the BFST Act, 1941, against the said order of March 8, 1989, before the Additional Commissioner of Commercial Taxes and that is still pending. The applicant chose to invoke our jurisdiction allegedly on the ground that being a creature of statute, the revisional authority was incompetent to interpret the statutory provisions of rule 3 (66 ). It is alleged that the applicant could not realise any sales tax for the period from April 1, 1984 to August 14, 1985, in view of rule 3 (66 ). On January 2, 1987, two applications for renewal for the aforesaid period, one, up to March 31, 1985, and the other up to August 14, 1985, had been filed before the Assistant Commissioner. The generator was purchased on account of erratic supply of power and the moulds were bought in aid of the manufacturing job. In view of the guidelines of the Government of India and the practice of the Directorate of Cottage and Small-scale Industries of the Government of West Bengal in regard to excluding the cost of generator and moulds from the investment limit on "plant and machinery", the Assistant Commissioner ought to have granted the E. C. , ignoring the cost of the same. Thus, the applicant prays for setting aside the order dated March 8, 1989, of the Assistant Commissioner and directing renewal of the E. C. for the periods from April 1, 1984 to March 31, 1985 and April 1, 1985 to August 14, 1985.

(3.) IT was rightly argued by the learned Stated Representative that the above order simply proceeded on the ground of delay and the ground of computation of investment limit was not at all considered. The judgment dated July 16, 1987, of Suhas Chandra Sen, J. , in C. O. No. 11048 (W) of 1986 which was followed in making the above order dated June 1, 1988, has been reported in [1988] 71 STC 220 (Cal) (Standard Vacuum Equipment v. Commissioner of Commercial Taxes), from which we find that delay in rejecting the prayer for renewal in the circumstances of that case was the ratio of that judgment. In the earlier case of the applicant decided by the High Court, the renewal application for the period from April 1, 1983 to March 31, 1984, was filed on August 21, 1983. The rejection for the period from December 7, 1983 to March 31, 1984, was made by an order dated April 11, 1986, and communicated to the applicant by letter No. 3660 dated July 14, 1986. In that context of inordinate delay B. P. Banerjee, J. , passed the order dated June 1, 1988, without touching the question of computation of investment limit with reference to the cost of generator and moulds. Mr. S. N. Bose, Advocate, appearing for the applicant sought to raise the question of constructive res judicata, as it were, the question of inclusion or exclusion of the cost of generator and moulds had already been decided or deemed to have been decided by B. P. Banerjee, J. An application under section 8 of the West Bengal Taxation Tribunal Act, 1987 (like the present one) stands on the same footing as that of an application under article 226 of the Constitution of India. It is settled that a second petition under article 226 could be entertained and not barred by the rule of res judicata where the cause of action is different (Aditya v. Principal, Rajendra Medical College AIR 1971 SC 1005 at page 1010); and where there has been a decision on merits, the rule of constructive res judicata will be applicable to bar a second application founded on the same cause of action (Devilal v. Sales Tax Officer [1965] 16 STC 303 (SC); AIR 1965 SC 1150, Gulabchand v. State of Gujarat AIR 1965 SC 1153 at page 1166 ). In this case, the reliefs sought for in the former and present proceedings are different, causes of action are different (the instant application challenges the second rejection order for a different), there was no decision on the issue (except delay) on merits, and the material issue, namely, computation of investment limit after excluding or including the cost of generator and moulds was not decided or even discussed at all. In the absence of a decision on that issue, the respondents could not appeal therefrom. Hence, from all points of view the order of B. P. Banerjee, J. , dated June 1, 1988, does not operate as res judicata in any form as against the present respondents. On the other hand, the order of B. P. Banerjee, J. , is silent about the prayer for a direction (in the former application under article 226) for disposal of the pending applications for the periods now under our consideration (April 1, 1984 to March 31, 1985 and April 1, 1985 to August 14, 1985) which prayer was, thus, not allowed. However, the applicant has also come before us on a new cause of action, i. e. , the second rejection order and hence is not inhibited by the rule of res judicata.