State Taxation Tribunal - West Bengal
Kejriwal Electronics Private Limited ... vs Commercial Tax Officer, Manicktala ... on 26 April, 1990
Equivalent citations: [1991]81STC20(TRIBUNAL)
JUDGMENT
B.C. Chakrabarti (Chairman)
1. Both the cases arise out of the same application initially filed in the High Court as a writ application under Article 226 of the Constitution--one for extension of the interim order in terms of the provisions of the West Bengal Taxation Tribunal Act, 1987 and the other relating to the main application. The prayer for extension of the interim order was allowed vide order dated May 17, 1989. In regard to the main application, the case of the applicant is as follows :
The applicant No. 1 is a private company within the meaning of the Companies Act, 1956 and the applicant No. 2 is a shareholder of the said company. The company carries on the business of manufacturing television receiver sets at its factory situated at Raghunathpur, Jaynagar, in the district of 24 Parganas. It is a newly set up small-scale industrial unit duly registered with the Cottage and Small-scale Industries Department of the Government of West Bengal. The goods manufactured by the company have been notified under the West Bengal Sales Tax Act, 1954 (hereinafter referred to as "the 1954 Act"). The company is duly registered as a dealer under the 1954 Act and also under the Central Sales Tax Act, 1956. A notification being Notification No. 1177-F.T. dated March 31, 1983, provided that no tax shall be payable by a dealer under the Act on sales by a newly set up small-scale industry of notified commodities other than those included in Schedule X manufactured by it during the period of three years if the industry is situated within the area of the Calcutta Metropolitan District or for five years if it is situated elsewhere in West Bengal from the date of its first sale of such manufactured notified commodity. A dealer claiming the benefit of the notification was required to obtain a certificate of eligibility. The first sale of the applicant was made on March 8, 1984. The applicant No. 1 applied to respondent No. 3 for issuance of the eligibility certificate pursuant to which respondent No. 3 issued a certificate of eligibility dated December 21, 1984 certifying that the company was eligible to claim exemption from tax during the period of validity of the certificate. The certificate was initially valid for the period from March 8, 1984 to December 31, 1984 and was, thereafter, renewed and extended from time to time up to March 7, 1987. In terms of the Notification No. 1177-F.T. dated March 31, 1983, the applicant was granted exemption for the period of three years. Section 4AAA provides that every dealer whose aggregate of the gross turnover under the 1954 Act and the Bengal Finance (Sales Tax) Act, 1941, exceeds Rs. 50 lakhs, shall in addition to the tax payable by him under Section 4 of the Act, be liable to pay turnover tax on his turnover as is specified in Sub-section (2). Under Sub-section (2) of Section 4 of the 1954 Act, a dealer liable to pay tax under Sub-section (1) of the said section and availing himself of the benefit under Section 23A of the Act by furnishing a declaration referred to in the proviso thereto, shall, in addition to the tax payable under Sub-section (1), be liable to pay tax on all purchases from an unregistered dealer of goods taxable under the Bengal Finance (Sales Tax) Act, 1941, required by him for use directly in the manufacture of the notified commodity. In respect of the period from January 1, 1985 to March 7, 1987, a total sum of Rs. 19,04,042.05 was paid by and/or realised from the applicants by way of turnover tax under Section 4AAA of the Act. Further a sum of Rs. 2,33,854.70 was paid by and/or realised from the company on the purchases made by them from unregistered dealers by way of purchase tax under Sub-section (2) of Section 4 of the Act. The respondents also purported to realise interest amounting to Rs. 1,92,408 for alleged delay in payment of the said amounts. The applicants were later advised that they were not liable to pay turnover tax or purchase tax under the Act during the period of exemption and that the amounts referred to above were paid under a mistake of law. Thereafter, the applicants filed revised returns claiming that they were not liable to pay any turnover tax during the period of exemption which the company had deposited under a mistaken view of the law. The applicants addressed several letters in this behalf and claimed refund of the sums paid by them towards turnover tax. The last reminder issued by the applicants is dated February 11, 1988. The applicants, however, were not favoured with any reply to the letters addressed by them to the respondents. While making the assessment for the period up to December 31, 1984, the respondent, Commercial Tax Officer, by his order dated April 15, 1988, held that the company was entitled to the exemption under the said notification but purported to levy purchase tax on purchases made by them from unregistered dealers. For the period up to December 31, 1984, no amount by way of turnover tax was levied or demanded by the respondents. In September, 1988, the applicants filed revised returns for the period from January 1985 to February 1987 before respondent No. 1 claiming therein that they were not liable to pay any purchase tax during the period of the said exemption. The order dated April 15, 1988, passed by the respondent, Commercial Tax Officer, purporting to levy purchase tax and turnover tax in respect of the period from March 8, 1984 to March 7, 1987, was illegal, invalid and without jurisdiction.
2. On the aforesaid grounds and interpretation of the different sections of the Act to which we shall advert to in greater details later on, the applicants prayed for an injunction restraining the respondents from making any assessment under the Act save in accordance with the revised returns for the period from January 1, 1985 and from levying any purchase tax or turnover tax in respect of the period of exemption. The applicants have also prayed for a direction upon the respondents to refund the total sum collected by the respondents from the applicants by way of purchase tax and turnover tax and interest in respect of the period from March 8, 1984 to March 7, 1987, together with interest at the rate of 2 per cent per month from the date of collection till the date of refund.
3. The application is opposed. The case of the respondents as made out in the affidavit-in-opposition, may be briefly stated thus :
Notwithstanding the fact that the applicants enjoyed exemption from payment of sales tax as a small-scale industrial unit by virtue of eligibility certificate granted to the applicants, the applicants are, none-the-less, liable to pay turnover tax in terms of Section 4AAA of the 1954 Act. The case of a dealer enjoying exemption by virtue of eligibility certificate under the 1954 Act, stands on a different footing from that of a dealer under the Bengal Finance (Sales Tax) Act, 1941, under similar circumstances. The claim that the applicants are not liable for turnover tax or purchase tax upon an analogy to the provisions of the BFST Act, 1941, is unwarranted. Assuming that there might have been some scope for confusion in regard to the liability for payment of turnover tax, there could be no confusion in regard to the liability for payment of purchase tax. In fact, the applicants are liable to pay both turnover tax and purchase tax under the 1954 Act during the period of validity of the certificate of eligibility. The revised returns submitted by the applicants were so made under a gross mistake of law. The demand for turnover tax and purchase tax in respect of the impugned period was valid and authorised by law. On such averments the respondents pleaded that the demand for refund of the amounts already paid by the applicants is not tenable and the case, accordingly, is liable to fail.
4. The applicants filed an affidavit-in-reply which virtually is a repetition of the claim made in the original writ application and denial of the points raised in the affidavit-in-opposition.
5. The short point that falls for consideration is whether the applicant No.1 being a small-scale industrial unit having obtained eligibility certificate for exemption of payment of tax during the impugned period is yet liable to pay turnover tax and purchase tax in view of the provisions of Sections 4, 4AA and 4AAA of the 1954 Act read with Notification No. 1177-F.T. dated March 31, 1983.
6. In order to appreciate the rival contentions of the parties it may be convenient to bear in mind the provisions of Sections 4, 4AA and 4AAA and the Notification No. 1177-F.T. dated March 31, 1983, which is the basic foundation of the applicant's claim. The relevant portions of the aforesaid provisions are reproduced below :
"4. Liability to payment of tax.--(1) There shall be paid by every dealer a tax on his turnover, at such rate (not exceeding twenty per cent) as the State Government may, by notification in the Official Gazette, fix in this behalf, and different rates may be fixed for different classes of notified commodities.
4AA. Exemption from payment of tax.--Notwithstanding anything contained in Section 4 or Section 23A the State Government may, if it is satisfied that it is necessary so to do in the public interest, by notification in the Official Gazette and subject to such conditions as may be specified therein, direct that no tax shall be payable or tax shall be payable at such rate, lower than that fixed under the aforesaid sections by such dealer or category of dealers or for such class of sales as may be specified in the notification.
4AAA. Liability to payment of turnover tax and rate thereof.--(1) Notwithstanding anything contained elsewhere in this Act,--
(a) every dealer whose aggregate of the gross turnover under this Act and the gross turnover under the Bengal Finance (Sales Tax) Act, 1941 (Bengal Act VI of 1941), during the last year ending on or before the 31st day of May, 1987, exceeds rupees twenty-five lakhs, shall, in addition to the tax payable by him under Section 4, be liable to pay from the 1st day of June, 1987, a turnover tax at the rate specified in Sub-section (3) of such part of his turnover as specified in Sub-section (2) ;
(b) every dealer, other than those referred to in Clause (a), whose aggregate of the gross turnover under this Act and the gross turnover under the Bengal Finance (Sales Tax) Act, 1941 (Bengal Act VI of 1941), during any year ending on or after the 1st day of June, 1987, exceeds rupees twenty-five lakhs shall, in addition to the tax payable by him under Section 4, be liable to pay from the first day of the year immediately following such year a turnover tax at the rate specified in Sub-section (3) of such part of his turnover as specified in Sub-section (2) ;
(c) every dealer who has become liable to pay the turnover tax under Clause (a) or Clause (b) shall continue to be so liable until the expiry of three consecutive years during each of which the aggregate of his gross turnover under this Act and the gross turnover under the Bengal Finance (Sales Tax) Act, 1941, does not exceed rupees twenty-five lakhs and on the expiry of such three years his liability to pay the turnover tax shall cease ;
(cc) every dealer who has become liable to pay the turnover tax before the commencement of Clause (a) of Sub-section (3) of Section 4 of the West Bengal Taxation Laws (Amendment) Act, 1987 shall, notwithstanding anything contained in Clause (a) or Clause (b), continue to be so liable until the expiry of three consecutive years commencing from any year before the commencement of Clause (a) of Sub-section (3) of Section 4 of the West Bengal Taxation Laws (Amendment) Act, 1987, during each of which his aggregate of the gross turnover under this Act and the gross turnover under the Bengal Finance (Sales Tax) Act, 1941 (Bengal Act VI of 1941) does not exceed rupees fifty lakhs and on the expiry of such three years after the commencement of Clause (a) of Sub-section (3) of Section 4 of the West Bengal Taxation Laws (Amendment) Act, 1987, his liability to pay the turnover tax shall cease unless he becomes again liable to pay the turnover tax under Clause (a) or clause, (b) ;
(d) every dealer whose liability to pay the turnover tax has ceased under the provisions of Clause (c) or Clause (cc) shall, if the aggregate of his gross turnover under this Act and the gross turnover under the Bengal Finance (Sales Tax) Act, 1941, during any year again exceeds rupees twenty-five lakhs, be liable to pay from the first day of the year immediately following such year the turnover tax at the rate specified in Sub-section (3) of such part of his turnover as specified in Sub-section (2).
(2) The turnover tax shall be levied on that part of the gross turnover of a dealer during any period which remains after deducting therefrom his turnover during that period on--
(a) sales of goods referred to in Section 14 of the Central Sales Tax Act, 1956 (74 of 1956), if specified under Section 25 for the purpose of taxation under this Act ;
(b) sales of notified commodities for which the rate of tax fixed under Section 4 is nil ;
(c) sales which are shown to the satisfaction of the prescribed authority to have taken place in the course of inter-State trade or commerce, within the meaning of Section 3 of the Central Sales Tax Act, 1956, or in the course of import into, or export out of, the territory of India, within the meaning of Section 5 of that Act, of notified commodities, other than those specified in Clauses (a) and (b) ;
(d) such other sales as may be prescribed.
Notification No. 1177-F.T. dated March 31, 1983 WHEREAS the Governor is satisfied that it is necessary so to do in the public interest ;
NOW, THEREFORE, in exercise of the powers conferred by Section 4AA of the West Bengal Sales Tax Act, 1954 (West Bengal Act IV of 1954) (hereinafter referred to as "the said Act"), the Governor is pleased hereby to direct that no tax shall be payable by a dealer under the said Act on sales by a newly set up small-scale industry of notified commodity or class of notified commodities, other than those included in the Schedule X appended to this notification, manufactured by it during the period of three years, if the said industry is situated within the area of the Calcutta Metropolitan District as described in the Schedule to the Calcutta Metropolitan Planning Area (Use and Development of Land) Control Act, 1965 (West Bengal Act XIV of 1965), or five years, if it is situated elsewhere in West Bengal since the date of its first sale of such manufactured notified commodity or commodities :
Provided that the dealer claiming the benefit of this notification shall be so eligible only if he keeps separate accounts in respect of such newly set up small-scale industry, issues serially numbered cash/credit memos, for sale of notified commodity or commodities manufactured in such industry, keeps vouchers and other documents for purchases of plant and machinery for establishment of such industry and maintains other records to prove that sales claimed and exempt under this notification were of notified commodity or commodities manufactured in such an industry set up by him and that no amount by way of tax under the said Act has been realised by him in respect of such sales :
Provided further that the dealer claiming the benefit of this notification shall be so eligible, if he possesses a valid certificate of eligibility in the form appended to this notification granted by the appropriate Assistant Commissioner in this behalf for such period as mentioned in the said certificate :
Provided also that in the case of a dealer claiming the benefit of this notification on account of sales of manufactured notified commodity or commodities which had been goods liable to taxation under the Bengal Finance (Sales Tax) Act, 1941 (Bengal Act VI of 1941) but were subsequently specified by notification under Section 25 of the West Bengal Sales Tax Act, 1954, the period of such benefit of three years or five years, as the case may be, as referred to in this notification, shall be reduced by the period during which the dealer was entitled to similar benefit of exemption of tax on the sales of such goods under Clause (66a) of Rule 3 of the Bengal Sales Tax Rules, 1941.
Explanation,--For the purpose of this notification 'newly set up small-scale industry' shall mean a new industrial unit,--
(i) with an investment up to rupees thirty-five lakhs on plant and machinery, excluding the value of land and building,
(ii) which is registered with the Cottage and Small Scale Industries Department of the Government of West Bengal,
(iii) which starts production for the first time on or after the 1st April, 1980,
(iv) which is liable to pay tax as a dealer under the said Act, but shall not include any expansion, addition or modification of an existing industrial unit,
(v) which is not established solely or substantially with the plant or machinery--
(a) of another newly set up small-scale industry which earlier availed of the exemption under this notification or under Notification No. 1809-F.T., dated the 1st April, 1976 and which is not engaged in the business of manufacturing such plant and machinery, or
(b) hired, leased or rented from, or lent by, a manufacturing dealer registered under the said Act or the Bengal Finance (Sales Tax) Act, 1941 (Bengal Act VI of 1941).
(vi) which does not use the trade mark or the brand name of any product of an existing industrial unit,
(vii) which has not availed of any benefit under Notification No. 1809-F.T., dated the 1st April, 1976.
2. The certificate of eligibility referred to in the second proviso to the first paragraph shall be granted on application and shall be valid for a period not exceeding twelve months from such date as may be specified therein, but may, at the discretion of the authority granting the certificate, be renewed from time to time for a period not exceeding twelve months at a time :
Provided that the certificate of eligibility shall not be granted or renewed if the dealer sells any capital assets otherwise than in the ordinary course of business, violates any conditions referred to in the first paragraph or does anything which adversely affects the economic viability of the newly set up industry.
3. The authority granting the certificate of eligibility referred to in the second paragraph may, for sufficient reasons to be recorded in writing, and after giving the holder of such certificate a reasonable opportunity of being heard, declare such certificate invalid from such date as he may specify.
4. A dealer shall apply for a certificate of eligibility or renewal thereof ordinarily within a month from the date from which such certificate is required to be granted or renewed for the purposes of this notification."
7. Mr. Gupta, appearing on behalf of the applicant, while submitting that the applicant is entitled to exemption from the liability of turnover tax and purchase tax during the period of validity of the eligibility certificate, prefaced his submission upon a reference to the observations of Rowlatt, J., in Cape Brandy Syndicate v. Commissioners of Inland Revenue [1921] 1 KB 64 quoted in AIR 1971 SC 378 (Baidyanath Ayurved Bhawan (Pvt.) Ltd. v. Excise Commissioner). Rowlatt, J., said in that case that in taxing statute one has to look at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used. This is a rule of construction which has been repeatedly quoted with approval by the Supreme Court. If the person sought to be taxed comes within the letter of the law, he must be taxed, however great the hardship may appear to the judicial mind to be. On the other hand, if the Revenue seeking to recover the tax cannot bring the subject within the letter of the law, the subject is free, however, apparently within the spirit of the law the case may otherwise appear to be (Craies on Statute Law, 7th edition, page 113). Where, however, the language of the Act is ambiguous or difficult to construe, the court may for assistance in its construction, refer to rules made under the provisions of the Act, especially where such rules are by the statute authorising them to be read as part of the Act (Craies on Statute Law, page 157).
8. Keeping these principles in view, let us now consider the submissions made by Mr. Gupta in support of the contention that the applicant, in the facts and circumstances of the case, and in view of the Notification No. 1177-F.T. dated March 31, 1983, cannot be made liable for payment of turnover tax and purchase tax and that whatever amount has been paid by or collected from him on those accounts, is liable to be refunded.
9. In the first place, our attention was drawn to the provisions of Section 4 of the West Bengal Sales Tax Act, 1954 (hereinafter referred to as "the 1954 Act"). Section 4 is the charging section providing for liability to pay tax on the dealer's turnover on sales and purchases. Section 4AA provides for exemption from payment of tax. This section begins with the words "notwithstanding anything contained in Section 4 or Section 23A" and provides that "the State Government may by notification direct that no tax shall be payable or tax shall be payable at a rate lower than that fixed under the aforesaid sections". Section 4AAA relates to liability to payment of turnover tax and the rate thereof. This section begins with the words "notwithstanding anything contained elsewhere in this Act". The Section 4AAA, it appears, is a complete code enumerating the circumstances under which turnover tax may be levied and Sub-section (2) of the section provides for deductions from turnover on certain items enumerated in Clauses (a) to (d). Clauses (a) to (c) as will be seen from the section itself, as quoted earlier, has no application in this case. Clause (d) entitles the deduction on "such other sales as may be prescribed". It is undisputed that no prescription has been made under Section 4AAA(2)(d). But Mr. Gupta contended upon a reference to Notification No.1177-F.T. dated March 31, 1983, that there is a total exemption from tax to certain newly set up small-scale industrial units. The notification has been issued in exercise of the powers conferred by Section 4AA of the 1954 Act. It provides that no tax shall be payable by a dealer under the 1954 Act on sales by a newly set up small-scale industry of notified commodity other than those included in Schedule X appended to the notification, manufactured by it during the period of eligibility. Upon a reference to the various provisions stated above, it was argued that there is nothing in the notification to indicate that the reference to tax in the notification means only the tax contemplated by Section 4 or 4AA. It was further contended that the notification does not in terms exclude turnover tax which was introduced long before the notification was issued. If turnover tax was intended to be excluded, it was argued, then the notification should have been worded otherwise and more succinctly. It is true that the notification does not in clear terms say that turnover tax shall not be payable but, it was argued, that the expression "tax" should include in its coverage turnover tax under Section 4AAA of the Act as well.
10. We are, however, unable to agree with the contention urged by Mr. Gupta in this regard. The notification with the aid of which exemption is claimed is a notification issued in exercise of the power conferred by Section 4AA. Section 4AA again lays down that notwithstanding anything contained in Section 4 or Section 23A, the State Government may direct that no tax shall be payable. Section 4AA by the very language of the section indicates that the authority of the State Government may be exercised despite what is contained in Section 4 or Section 23A. Section 4 does not relate to the turnover tax. Turnover tax is contemplated by Section 4AAA which contains a self-contained provision as to the circumstances when such tax may be levied and the circumstances when deductions from such tax may be claimed and also a provision in Clause (d) of Sub-section (2) for prescribing exemptions from the tax. The notification relied on by Mr. Gupta being one under Section 4AA, does not, in our view, contemplate turnover tax or purchase tax. The non obstante clause, appearing at the beginning of Section 4AAA, does not help the applicant in claiming exemption from payment of turnover tax on sales and purchases. The expression "notwithstanding", is intended to preclude in advance any interpretation contrary to certain declared objects or purposes (Black's Law Dictionary). Therefore, upon a plain reading of Sections 4, 4AA and 4AAA, we are unable to read in the notification anything to indicate that the notification might apply to turnover tax or exempt the payment of turnover tax on sales or purchases.
11. Mr. Gupta in support of his contention relied on a single Bench decision of the Calcutta High Court in the case ABN Food & Beverage Private Ltd. v. Assistant Commissioner of Commercial Taxes, South Circle reported in [1990] 77 STC 339 ; (1990) 23 STA 1. It was held in that case that turnover tax is also nothing but a tax due under the Act and that the petitioner was not liable to pay turnover tax so long the eligibility certificate was in operation. In that case it was submitted on behalf of the petitioner that the notification in question was issued in exercise of power conferred by Section 4AA and the expression used both in the said section and in the notification is that no tax shall be payable. It was also submitted in that case and reiterated before us that Clause (d) of Sub-section (2) of Section 4AAA makes provision that turnover tax shall be levied on that part of the gross turnover which remains due after deducting therefrom his turnover during that period on such sales as may be prescribed. In the face of that provision it was further argued that no turnover tax was payable in view of the fact that in terms of the said notification the whole of the turnover in respect of the sales of the notified commodity is liable to be deducted from the gross turnover and if such deduction is made nothing would remain for the purpose of computation of the turnover tax. Mr. Gupta who also argued the case before the High Court in that matter, submitted that if it was the intention of the authority concerned that the exemption granted by the notification would not cover the payment of turnover tax, then suitable provisions would have been made in this regard. The learned Judge accepted the contention of Mr. Gupta and found that the petitioner was not liable for turnover tax so long as the eligibility certificate was in operation. It is clear upon a reading of the judgment that the decision rested upon the interpretation of the Notification No. 1177-F.T. dated March 31, 1983. We do not feel persuaded to accept the construction put forth by Mr. Gupta. It is already indicated that the notification was issued in exercise of the powers conferred by Section 4AA which does not cover turnover tax contemplated by Section 4AAA. The notification cannot be read as a prescription contemplated by Clause (d) of Sub-section (2) of Section 4AAA. Such a prescription could be made only by framing a rule under the Act. No such rule has been framed and we are unable to read the notification as a prescription contemplated by the aforesaid clause.
12. Mr. Gupta contended that in interpreting a taxing statute there is no scope for intendment. While agreeing with such a interpretation, we are unable to accept the contention that if the notification intended to exclude turnover tax from its operation then the language should have been otherwise. There would be no point to find out what the intention was. It is too often dangerous to try to explain a statute by words not to be found in it. In order to understand what a statute does mean it is one important step to know what it does not mean. Reading the notification along with the other provisions referred to earlier, we are unable to hold that the notification means exemption from payment of turnover tax, for the notification by itself does not indicate so. The notification could not comprehend something which is beyond the scope of Section 4AA. This apart, we have already indicated that Section 4AAA is a section containing a complete code so to say regarding the liability for payment of turnover tax and the exemptions contemplated by Sub-section (2) thereof. It will bear repetition that the sales which could be deducted under Clause (d) of Sub-section (2) of Section 4AAA, have not been specified by framing any rules. We are unable to read the notification as a prescription contemplated by the clause. Mr. Gupta contended that when a statutory provision and a notification emanate from the same source, both should be read together to give a meaningful construction to the statute. In support of this submission a reference was made to the case of K.P. Varghese v. Income-tax Officer reported in [1981] 131 ITR 597 (SC) ; AIR 1981 SC 1922. In that case it was held that the circulars issued by the Central Board of Direct Taxes explaining the scope and object of Sub-section (2) of Section 52 of the Income-tax Act are binding on the tax department in administering or executing the provisions enacted in Sub-section (2). It was observed that apart from the binding nature they are clearly in the nature of contemporanea expositio, furnishing legitimate aid in the construction of statutory provisions. In the instant case, the decision referred to does not come to the aid of the applicant for reasons that we shall presently discuss. Section 4AAA was enacted notwithstanding anything contained elsewhere in the Act. Therefore, Section 4AAA would be operative and enforceable despite Section 4AA. Necessarily, it follows that Section 4AAA would be operative in spite of Section 4AA or any notification issued thereunder. The notification issued under Section 4AA is limited in its application. The authority to issue the notification is derived from Section 4AA. Therefore, the notification cannot be read for the purpose of interpreting Section 4AAA nor can the notification limit or restrict the operation of Section 4AAA.
13. Mr. Majumdar, the learned State Representative, besides contending that the applicant is not entitled to total exemption from turnover tax in view of the notification, made an alternative submission that, in any event, there would be no question of exemption from payment of tax on purchases. In arguing so, he pointed out that under the notification no tax shall be payable by a dealer on "sales" by a newly set up small-scale industry. Therefore, it was argued that the notification does not contemplate purchase tax. To counter this, Mr. Gupta contended that the purchases were really of raw materials for the purpose of manufacture in the small-scale industrial unit with the intention of eventual sale thereof and that, therefore, the purchases also should be construed as sales for the purpose of the notification. This was too far-fetched an interpretation and can hardly be accepted. Sales tax and purchase tax stand on different footings depending on the taxing event. If we go by the notification, as it is, there is no question of exemption from the payment of purchase tax. Further, in the view we have taken, we find that a newly set up small-scale industrial unit is not entitled to exemption from turnover tax on the strength of the notification issued under Section 4AA of the 1954 Act. We are, therefore, unable to agree with the view expressed by the learned single Judge of the Calcutta High Court in the case referred to earlier and we find that the liability for payment of turnover tax and purchase tax subsists in spite of the notification issued under Section 4AA. The case accordingly fails and is hereby dismissed.
There will be no order for costs.
P.C. Banerji (Technical Member) I agree L.N. Ray (Judicial Member) I agree