Cipla Ltd. vs Deputy Commissioner and Others

Indira Banerjee, J.—This writ application is directed against an order dated December 24, 2010 of the Additional Commissioner, Commercial Taxes, West Bengal, in a suo motu revision case, modifying the order of assessment passed by his predecessor-in-office on June 15, 2005 u/s 9(2) of the Central Sales Tax Act, 1956 read with section 45(1) of the West Bengal Sales Tax Act, 1994, in respect of the period four quarters ended on March 31, 2003. It appears that a notice of suo motu revision was issued to the petitioner. The gist of the order proposed to be passed was as follows:

The order dated June 15, 2005 of assessment u/s 9(2) of the Central Sales Tax Act, 1956 read with section 45(1) of the West Bengal Sales Tax Act, 1994 passed by the DCCT/CD in respect of the period four quarters ending March 31, 2003 be revised disallowing your claim of stock transfer u/s 6A of the Central Sales Tax Act, 1956 against the under-mentioned F forms covering transaction of stock transfer for more than one month in violation of rule 12(5) of the Central Sales Tax (Registration and Turnover) Rules, 1957 to the extent noted against each:

and the disallowed amount of Rs. 17,46,586.20 will be subjected to tax at 10 per cent u/s 8(2)(b) without allowing any statutory deduction.

The relevant part of the order impugned is set out hereinbelow:

...

Therefore, the matter is decided ex parte to the best of my judgment.

It appears from records that the F forms bearing Nos. 37514, 37518 and 37521 covered transactions, as under:

For the sake of natural justice, the higher amount for a month covered by each declaration in form F is accepted as the amount admissible u/s 6B. It is held that allowance of claim u/s 6B shown in column (3) (a) against the form F in column (1) in respect of all the three forms was not in accordance with the law and therefore, an amount of Rs. 17,46,586.25 is held as allowed in excess in the assessment towards claim u/s 6B.

Thus, the order of assessment is revised suo motu by reducing the amount of stock transfer to Rs. 6,38,73,829.14 and by enhancing the gross turnover of sales and taxable balance to Rs. 17,98,586.25.

Tax at eight per cent shall be charged on the taxable balance of Rs. 5,20,000 after allowing deduction at four per cent and tax at 10 per cent shall be charged on taxable balance of Rs. 17,46,586.25 without allowing any deduction.

The assessing officer is directed to compute afresh taxes payable in accordance with this order and to issue a revised demand notice as per law.

The order has apparently been passed ex parte. Three F forms have been disallowed on the purported ground that the three F forms bearing Nos. 37514, 37518 and 37521 covered transaction exceeding a period of one month. It appears that the Additional Commissioner, Commercial Taxes, West Bengal has misconstrued rule 12(5) of the Central Sales Tax (Registration and Turnover) Rules, 1957 which provides that the declaration referred to in sub-section (1) of section 6A of the Central Sales Tax Act, 1956 shall be in form F. The proviso to rule 12(5) provides that a single declaration might cover transfer of goods, by a dealer, to any other place of business, or agent, or principal, as the case may be, effected during a period of one calendar month. There is nothing in the rules which can be construed to vitiate a declaration form only on the ground that it covers transactions exceeding a period of over one month. The assessment has apparently been revised suo motu and ex parte on a misconception of rule 12(5) of the Rules. The impugned order is, thus, set aside and quashed.

The writ application is disposed of accordingly.

Affidavits not having been called for, the allegations made in the writ application, shall be deemed not to have been admitted. Urgent certified photostat copy of this order, if applied for, be supplied to the learned advocates appearing for the parties, subject to compliance with all requisite formalities.