H AND K ROLLING MILL ENGINEERS PRIVATE LIMITED Vs. ASSISTANT COMMISSIONER OF COMMERCIAL TAXES AND ORS.

JUDGEMENT

(1.) THIS judgment shall cover both No. RN -39 of 1998 and No. RN -40 of 1998 as the facts and the points of law involved in these two cases are identical. In these applications under Section 8 of the West Bengal Taxation Tribunal Act, 1987, the applicants have prayed for an order directing the respondents to rescind the order dated April 20, 1995 passed by the Assistant Commissioner of Commercial Taxes, Durgapur Circle (respondent No. 2), the revisional order dated June 17, 1997 and review order dated December 2, 1997 passed by the West Bengal Commercial Taxes Appellate and Revisional Board ("the Board", for short) and directing the Board to pass fresh orders based on the contract of Durgapur Steel Plant with the applicant and the applicant's contract with its nine sub -contractors. The applicant has filed two separate applications against the review order and the revisional order (RN -39 of 1998 and RN -40 of 1998 respectively).

(2.) THE case of the applicant is that it is registered under the Companies Act, 1956, in Bombay and is engaged in the business of execution of works contract. A turnkey contract for design, manufacture, supply and delivery at site of plant and equipment, steel structures including civil work, erection, commissioning, performance guarantee tests and handing over the plant of rolling mill for merchant mill for Durgapur Steel Plant modernization, was made on October 31, 1989 between the Durgapur Steel Plant of the Steel Authority of India Limited (in short, "the DSP") of the one part and Hoestemberghe & Klutsch, GMBH [in short, "the H&K (Germany)"] and the petitioners as members of Consortium of the other part. In terms of Article 4 of the agreement with DSP the applicant entrusted its entire scope of work of the modernization project to three sub -contractors for work and labour, one sub -contractor for labour job and five sub -vendors in other States under separate back -to -back agreements executed between the applicant and each of those sub -contractors and sub -vendors for different types of work entrusted to them. The appointment of each sub -contractor was approved either by DSP or MECON.

(3.) THE applicant received a notice in form IX from the Assistant Commissioner of Commercial Taxes, Durgapur Circle, who proposed to revise the aforesaid order of assessment for the period from April 1, 1991 to March 31, 1992 and asked the applicant to prefer objection, if any, without giving a gist of the order which he proposed to pass. One of the reasons for the proposed revision was that assessment for the two periods were to be made afresh. The applicant is not aggrieved about this part of the order and so no objection against that was given. But the second ground about which the applicant was asked to prefer objection, if any, related to irregular allowances given at the time of original assessment which were to be reviewed. No specific indication was disclosed as to in which area of the assessment irregular allowances were given. The applicant, however, submitted its objection on presumption. By an order dated April 20, 1995 the Assistant Commissioner, Commercial Taxes, Durgapur Circle revised the order of assessment and directed the Commercial Tax Officer, Durgapur Charge, to compute the tax by taking into account his observations on the following three grounds :