SUNDARI RUBBER WORKS Vs. STATE OF TRIPURA

JUDGEMENT

(1.) THE writ petitioner is a small-scale industrial unit engaged in the manufacture of tread rubber and mixed compound, having its head office and factory at Agartala in the State of Tripura. It was registered as a small-scale industrial unit with the Department of Industry, Government of Tripura, on February 23, 1979. The actual production started sometime in March, 1982. The petitioner is also registered as a dealer under the Central Sales Tax Act, 1956, hereinafter "the Central Act" and under the Tripura Sales Tax Act, hereinafter "the Act". During the years 1982-83 and 1983-84, the petitioner manufactured only tread rubber which is a rubber product taxable under item 41 of the Schedule to the Act. The petitioner made a representation to the Secretary, Revenue Department, Government of Tripura, praying for exempting sales of rubber products manufactured by the petitioner from sales tax for at least three years. No exemption was, however, granted. The petitioner, therefore, submitted its returns of turnover for the years 1982-83 and 1983-84 and paid the sales tax due on the sales of "tread rubber" made it. In the year 1984, the petitioner also started manufacturing the other product, namely, mixed compound which, according to the petitioner, was not taxable under the Act. The petitioner, therefore, did not include the turnover of mixed compound in the returns for the years ending March 31, 1985 and March 31, 1986. The turnover of tread rubber was only shown and tax was paid thereon. The Superintendent of Taxes did not accept the contention of the petitioner in regard to taxability of mixed compound and by orders of assessment dated February 28, 1987, estimated his turnover for the two years, namely, 1984-85 and 1985-86 by including the turnover of the mixed compound also in the taxable turnover treating it as a rubber product within the meaning of item 41 of the Schedule to the Act and determined the tax payable accordingly. In pursuance of the said orders of assessment, demand notices were also issued demanding Rs. 75,091. 48 and Rs. 82,329. 89 for the assessment years 1984-85 and 1985-86, respectively. On receipt of the demand notices, the petitioner made a representation before the Commissioner of Taxes on April 17, 1987, objecting to the levy of tax on the mixed compound. According to the petitioner, the item named as "mixed compound" by the petitioner was, in fact, "masticated rubber" and not "rubber product" which is covered by item 41 of the Schedule of taxable goods attached to the Act. In his said representation, the petitioner also claimed that it was entitled to exemption in respect of sales of the manufactured goods during the period of three years from the date of first sale by virtue of section 3 (2) of the Act and rule 5 (2) of the Rules, as it stood prior to its amendment by the Tripura Sales Tax (Seventh Amendment) Rules, 1987, published vide Notification dated February 23, 1987. It may be observed that by the aforesaid Amendment Rules, rule 5 (2) was amended and the exemption under sub-rule (2) of rule 5 from sales tax available under the said sub-rule in respect of sale of "all goods manufactured by a newly set up small-scale industry" was restricted to sale of "taxable goods specified by the State Government under sub-section (2) of section 3 of the Act". In fact, prior to the amendment of the rule by amendment dated February 23, 1987, a notification had been issued by the Deputy Secretary to the Government of Tripura, Revenue Department, being Notification No. E. 4 (4)TAX/tst/82/d-2/1416-25 dated February 20, 1985, under section 3 (2) of the Act by which sales of some of the goods including "rubber product" manufactured by a newly set up small-scale industry established in Tripura after April 1, 1984, were exempted from payment of sales tax on fulfilment of the conditions specified in the said notification. The contention of the petitioner in his representation was that under rule 5 (2) of the Rules, as it stood during the relevant period (prior to the amendment made by the Seventh Amendment Rules, which came into effect from February 26, 1987), it was entitled to exemption in respect of sale of mixed compound made by it independent of any notification under sub-section (2) of section 3 of the Act. The Commissioner of Taxes, in reply to the aforesaid representation asked the petitioner to avail the normal relief meaning thereby to file an appeal, revision, etc. , against the impugned order of assessment as provided under the Act. The petitioner, thereafter, filed revision petitions before the Commissioner. In the said revision petitions, the only ground on which the assessments were challenged was that "mixed compound" or "masticated rubber" manufactured by the petitioner did not fall under item 41 of the Schedule of taxable goods and, as such, levy of tax on sales thereof was not tenable. The revision petitions were disposed of by the Commissioner by a common order dated November 5/9, 1987. In the revisional order, the Commissioner held that masticated rubber manufactured by the petitioner was an item which clearly fell within item 41 of the Schedule to the Act and, accordingly, he upheld the order of the assessment and dismissed the revision petitions. Aggrieved thereby, the petitioner has filed this writ petition.

(2.) IN the writ petition, the petitioner has challenged the order of assessment on two grounds. Firstly, that it was entitled to exemption under sub-rule (2) of rule 5 of the Rules as it stood prior to the Seventh Amendment Rules. Secondly, that the product "masticated rubber" or "mixed compound" is not a rubber product and, as such, does not fall within item 41 of the Schedule. So far as the first contention is concerned, it may be observed that rule 5 of the Rules enables a dealer to deduct from his gross turnover certain taxable turnover mentioned therein. Sub-rule (2) of the said rule provides for deduction of turnover of goods manufactured by a newly set up small-scale industry. The deduction is available for a period of three years since the date of first sale of such manufactured goods on fulfilment of conditions specified in the two provisos thereto. Evidently, it is the dealer who has to claim the deduction at the first instance. Only if he makes such a claim, the assessing authority can go into the allowability of the same and for that purpose examine whether the requisite conditions for allowability of such deduction have been fulfilled by the dealer or not. In the instant case, admittedly no such claim was made by the petitioner in the return. Nor it was made before the assessing authority at the time of hearing for assessment. Even in revision before the Commissioner, no such claim was made. The only ground on which the levy of tax on masticated rubber was challenged was that it was not a rubber product and, as such, it did not fall under item 41 of the Schedule of taxable goods. The Commissioner also considered the revision petitions only on that ground and held that masticated rubber was rubber product and, as such, taxable under the Act and, therefore, dismissed the revision petition. In that view of the matter, we are of the opinion that the question of entitlement of the petitioner to claim deduction under sub-rule (2) of rule 5 cannot be examined by this Court in exercise of writ jurisdiction, because it requires examination of the facts in regard to fulfilment of the requirements which are condition precedent for such deduction under the said sub-rule. The petitioner did not raise this contention at any stage of the proceedings before the authorities nor brought the requisite facts on record to enable the authorities to examine his claim on that count. Under the circumstances, we are of the opinion that it is not possible to entertain this objection in the present writ petition.

(3.) BEFORE we proceed to resolve the controversy, it may be expedient to ascertain first the meaning of the expressions "rubber", "masticated rubber" and "rubber products". Rubber, has been defined in the Random House Dictionary of the English Language (the unabridged edition) as follows :