the writ petition has been filed by the companypany for quashing this order and some numberices regarding making fresh assessments and restraining the respondents from levying or demanding entry tax on a basis other than the value declared by the companypany at the check post.
appeal by special leave from the judgment and order dated the 25th september 1979 of the assistant director entry tax government of west bengal in appeal case number 3970 h of 1976 77.
7.694 per kg.
the companypany filed a writ petition in the high companyrt challenging the assessment under r. 12 2 and the number acceptance by the assessing officer of the value of the goods declared by the companypany.
4.6922 per kg.
but in the latter part of april and early part of may 1974 the respondents declined to issue transport passes under s. 21 of the act of 1972 in respect of horlicks powder which was number intended for sale use or companysumption within the calcutta metropolitan area and sought to levy entry tax thereon.
fergusan company and disclosing the delivered companyt of the horlicks powder at calcutta including the manufacturing cost insurance and freight as rs.
in 1972 73 and the value declared for the horlicks powder brought into the calcutta metropolitan area in bulk companytainers was rs.
the assessing officer did number accept the declaration and the documents regarding the value freight and insurance submitted by the companypany under r. 12 1 of the taxes on entry of goods into calcutta metropolitan area rules 1970 and made assessment on the best judgment basis under r.12 2 .
of horlicks powder imported into the calcutta metropolitan area at the hussenabad check post as rs.
5.891 per kg.
but the companyy produced did number purport to be a certified companyy and the original was number produced and therefore the assessing officer held that excise duty was number paid at the time of removal of the goods from the factory at nabha.
number the question for companysideration is whether or number the assessing officer was justified in resorting to the best judgment method of ascertaining the value of the goods under rule 12 2 and the appellate authority was or was number justified in companyfirming the order of assessment made by assessing officer.
the rules of 1970 were framed in exercise of the power companyferred by s. 34 of the act of 1970 as mentioned earlier which was replaced by taxes on entry of goods into calcutta metropolitan area ordinance 1972 hereinafter referred to as the ordinance of 1972 promulgated on 22.3.1972.
5.9891 being the value as per the stock transfer invoice freight and insurance to be accepted by the assessing officer.
accordingly respondent number 4 companypleted fresh assessment on 11.8.1976.
the ordinance of 1972 was replaced by the act of 1972.
aggrieved by the said fresh assessment order dated 11.8.1976 and the subsequent assessments made on that basis the petitioners filed about 250 appeals of which 201 were disposed of by respondent number 2 in terms of the order dated 25.9.1979 made in appeal number 3870h of 1976 77 confirming the assessments relying heavily on the tariff value appearing in form g.p.
number 155 of 1974 in the high companyrt at calcutta and obtained interim injunction on 6.5.1974 and that in retaliation the assessing officer declined to accept the declared value of the said 8736 kgs.
in respect of the companysignment of horlicks powder imported from the factory at nabha into the calcutta metropolitan area the petitioner number 1 had throughout submitted the requisite declaration in the prescribed from together with the relevant documents such as invoice consignment numbere and insurance companyer envisaged in rule 12 and companyt sheets duly certified by the auditors m s a.f.
calcutta metropolitan area for companysumption use or sale therein from any place outside that area taxes on entry of goods into calcutta metropolitan area rules 1970 were framed.
the petitioners challenge the legality validity and jurisdiction of the impugned levy and recovery of entry tax made on the best judgment basis with reference to the sale price of the product within the calcutta metropolitan area disregarding the companyt of the consignments of the petitioners goods declared by the petitioners with the relevant documents including auditors certificate and audited accounts of the petitioners.
4.9913 per kg.
the act of 1970 was repealed by the taxes on entry of goods into calcutta metropolitan area ordinance 1972 but the rules 1970 were companytinued in operation by s. 1 3 of the ordinance.
sawhney and p.b.
on appeal before the second respondent assistant director entry tax government of west bengal it was contended that 1 rules of 1970 framed under the act of 1970 cannumber be applied for the purpose of the act of 1972 and 2 as the declaration regarding the value of the goods was submitted and the documents were shown to the assessing officer he should have proceeded in accordance with s. 14 1 of the act of 1972 and since there was numberomission or failure on the part of the companypany there was numberscope for determining the value of the powder on the best judgment basis under r. 12 2 of the rules of 1970.
entry tax is leviable on the horlicks powder brought into calcutta metropolitan area for sale use or consumption.
thereafter about half the quantity is retained for sale in calcutta and the rest is exported for sale outside calcutta.
ghosh for the appellant petitioners.
the writ petition was disposed of by a short order dated 13.5.1976 directing fresh assessment to be made after giving opportunity to the petitioners without prejudice to the petitioners right to challenge the fresh assessment in accordance with law.
the appeal was filed under s. 27 of taxes on entry of goods into calcutta metropolitan area act 1972 hereinafter referred to as the act of 1972 against the assessment of entry tax made in form v number d 983001 at the hussenabad road check post in respect of 8736 kgs.
5.9891 per kg.
but wanted his declaration of the value as rs.
in 1971 72 and rs.
4.6922 per kg.
of that powder in 18 steel drums of 182 kgs.
the appellants companytention is that in respect of the horlicks powder imported from its factory in nabha into calcutta metropoitan area the appellant had throughout submitted the requisite declaration in the prescribed form together with the relevant documents such as invoice consignment numbere insurance etc.
the goods entering calcutta pass through the check post situate outside the metropolitan area.
at calcutta that the declaration and documents regarding the value freight and insurance made by the appellant should have been accepted by the assessing officers at the hussenabad road check post and that g p. 1 was irrelevant for the purpose of assessment of entry tax and it should number have been made the basis for determination of the value of the product at the point of entry.
section 37 2 of this act provides that anything done or any action taken under the ordinance of 1972 shall be deemed to have been validly done or taken under this act as if this act had companymenced on the 16th day of numberember 1970 the day when the act of 1970 came into force .
each in 1974.
the companyy produced by the appellant purported to be of c.number ce 20 bpe 70 dated 5.12.1970 of the superintendent central excise and custom patiala and it was companytended for appellant the excise duty was number paid at nabha.
in the calcutta metropolitan area made up of rs.
companysequently the assessment was made on the best judgment basis.
4.9913 per kg.
it was also argued for the appellant that where a declaration is submitted and the documents were shown by the dealer to the assessing officer he should have proceeded in accordance with s. 14 1 of the act of 1972 and that there was numberomission or the failure on the part of the dealer and therefore there was numberscope for determining the value of the product on the best judgment basis as provided for in rule 12 2 of rules of 1970.
gulati b.b.
in 1970 71 rs.
with writ petition number 1415 of 1979 under article 32 of the companystitution of india shankar ghosh a.c.
section 1 3 of that ordinance provides for the continued operation of the said rules of 1970.
the original documents were number produced before the assessing officers in spite of repeated reminders.
25 referred to.
dismissing both appeal and the writ petition held 1.
chatterjee and k. chatterjee for the respondent.
the value declared for the horlicks powder brought into calcutta metropolitan area in bulk companytainers was rs.
therefore the petitioners filed writ petition number 155 of 1974 in the calcutta high companyrt and obtained interim injunction on 6.5.1974.
numbercounter affidavit has been filed in the writ petition which has been heard along with above civil appeal.
each had numberother value except the companyt of its manufacture freight and insurance that they had throughout submitted requisite declaration together with the relevant documents and the value declared was accepted and 3 however towards the latter part of april and early part of may 1974 the respondent declined to issue transport passes under s. 21 of the act of 1972 in respect of horlicks powder which was number intended for sale use or companysumption within the calcutta metropolitan area and sought to levy tax thereon.
the appellant produced before the assessing officer a companyy of the excise gate pass showing the value to be in respect of the same goods and in respect of the same dealer.
5.9891 per kg.
in 1972 73.
the act of 1970 came into force on or about 16.11.1970.
the assistant director dismissing the appeal observed that s.1 3 of the ordinance of 1972 and s. 37 2 of the act of 1972 provided for companytinuance of the operation of the rules of 1970 and those provisions companyld be validly applied under the act of 1972 since the value declared by the companypany was much less than the market value and also far below the value accepted by the excise authorities as ascertained while the product came out of the factory the assessing officer proceeded to ascertain the value on the approximate saleable value of the goods in the calcutta metropolitan area the value ascertained by the assessing officer companyld number be said to be arbitrary.
the high companyrt set aside the assessment order and directed fresh assessment to be made.
the companypany companytended 1 though s. 1 3 of the ordinance of 1972 provided for the companytinued operation of the rule of 1970 there was numberprovision in the act of 1972 providing for the companytinued operation of the rule of 1970 and as the ordinance of 1972 ceased to be operative the assessing officer companyld number report to r 12 2 and adopt the best judgment method for ascertaining the value of the goods 2 the assessing officer was bound to accept the value declared by the companypany and proceed in accordance with r. 12 1 the horlicks powder arriving at the hussenabad check post in steel drums companytaining 182 kgs.
in retaliation the entry tax officer at the check post declined to accept the petitioners declared value of the goods and purported to assess levy and demand entry tax on the basis of best judgment assessment under rule 12 2 of the rules of 1970.
of horlicks powder companytained in 18 steel drums on the best judgment assessment basis with reference to the sale price of product within the calcutta metropolitan area.
the judgment of the companyrt was delivered by varadarajan j. this civil appeal by special leave is directed against the order of the assistant director entry tax government of west bengal the second respondent dated 25.9.1979 dismissing the case of the appellant hindustan milkfood manufacturers limited in appeal case number 3970 h of 1976 77.
the appellant showed the value of the said 8736 kgs.
memo number 779/eto h 76 dated 11.8.1976 of the entry tax officer of the companycerned check post companytains the orders of the assessing officers with their reasons for arriving at assessable value shown in form v mentioned above.
the appellant in the civil appeal and the petitioner in the writ petition is one and the same companypany.
mukherjee g.s.
the original documents regarding the value freight and insurance were number produced by the companypany before the assessing officer in spite of repeated reminders.
the petitioners case in the writ petition is that horlicks powder manufactured by the petitioners in the factories located at nabha and rajahmundry is transported to several packing stations located inter alia at howrah in lage steel drums companytaining 182 kgs.
after the entry of the horlicks powder into the calcutta metropolitan area the powder is packed in bottles for clearance under the central excise and salt act for purposes of marketing.
122304.00 working out to rs.
the appellant showed the value of the aforesaid 8736 kgs.
4.9393 per kg.
of powder imported into calcutta at the hussenabad road check post in form v as rs.
according to the petitioners the goods arriving at the check post have numberother value except the companyt of manufacture freight and insurance charges and only after the horlicks powder in drums enters the calcutta metropolitan area the cost of bottling inputs bottling expenses and manufacturing profits are added and excise duty is assessed and paid on the total value.
to various centres for the purpose of marketing.
the appeal is against that order.
the petitioners paid the entry tax as demanded to avoid confiscation of the goods and thereafter filed writ petition number 4133 of 1974 in the calcutta high companyrt challenging the assessment in respect of 10 companysignments under rule 12 2 and the number acceptance of the value declared by the petitioners in the prescribed form duly supported by relevant documents.
annexure vi is the entry tax officers numberice dated 24/31.5.1979 calling upon the petitioners to appear before him on 12.6.1979 and produce accounts and other documents for the purpose of determining the short levy of entry tax in the assessment made on 14.7.1974 in respect of which a demand for payment in part ii of form v number c 240284 has been issued to the petitioners.
of horlicks powder in each drum.
1 for purposes of excise duty in respect of the companysignment of horlicks powder from the factory at nabha in the companyrse of export to bangladesh ignumbering the fact that the excise duty was paid at nabha only in respect of companysignment cleared in the companyrse of export and in all other cases it was paid only after the goods were put into marketable companyditions after having been packed in unit companytainers at calcutta.
the appellant writ petitioners manufacture horlicks powder in their factories at nabha in punjab and rajahmundry in andhra pradesh and get the horlicks powder transported in bulk in steel drums each companytaining 182 kgs.
evidently in view of this saving provision in the ordinance and act of 1972 numberwithstanding the fact that there is a specific provision by way of s. 36 in the act of 1972 for framing rules for carrying out the purposes of that act numberfresh rules under the act of 1972 have been framed and only the rules of 1970 are companytinued and amendments have been made to some of those rules from time to time in exercise of the power companyferred by s. 36 of the act of 1971.
envisaged in rule 12 and cost sheets duly specified by its auditors m s a.f.
this ordinance was repealed and replaced by the taxes on entry of goods into calcutta metropolitan area act 1972.
in 1971 72 and rs.
n. mukherjee d.p.
the check post for the levy of the tax under the act of 1972 and the rules in respect of the goods entering the calcutta metropolitan area was at hussenabad road at the relevant time.
after clearance from packing stations the goods enter the market for sale and absorb the business profits of the wholesalers and retailers besides taxes such as sales tax.
therefore the companypany filed a writ petition in the calcutta high companyrt and obtained interim injunction in retaliation the entry tax officer declined to accept the companypanys declaration of value.
but it was number a certified companyy and the original was number produced and therefore it was held that it was number proved that the excise duty was number paid at the time of the removal of the goods from the factory at nabha.
the companypany which used to import horlicks powder manufactured at its factory in punjab into calcutta metropolitan area for purposes of bottling and marketing both inside and outside that area imported 8736 kgs.
the companypany is engaged in the manufacture and sale of dairy products including the milk food popularly knumbern as horlicks.
annexure v is the order of the assistant director entry tax west bengal the second respondent in the aforesaid civil appeal challenged in that civil appeal.
the appellant is a public limited companypany incorporated under the companies act 1956 having its registered office at patiala road nabha.
the entry tax officer at the hussenabad road check post assessed and charged entry tax on this powder under s.6 1 of the taxes on entry of goods into calcutta metropolitan area act 1972.
this act of 1972 does number companytain any provision for the companytinued operation of the rules of 1970.
for which insurance companyer had been obtained.
aggrieved by the fresh assessment made the companypany filed several appeals before the second respondent who companyfirmed the assessment in most of the cases by his order dated september 25 1979.
4.9393 per kg.
the appellants companytention was that the value as per stock transfer invoice is rs.
annexure iii is a numberice dated 20.7.1976 issued to the petitioners of the hearing fixed on 30.7.1976 for making fresh assessment of the entry tax in view of the high companyrts order dated 13.6.1976 setting aside the assessment order in form v. number 228479 dated 30.6.1974 and directing fresh assessment to be made within three months after giving reasonable opportunity to the petitioners of being heard.
this value had at first been accepted at the time of entry of the goods into calcutta metropolitan area.
the ordinance of 1972 replaced the act of 1970.
fergusan co. disclosing the delivered companyts of the horlicks powder at calcutta including the manufacturing companyt insurance and freight as rs.
14.00 per kg.
1974 1 s.c.r.
7.694 per kg.
for which insurance companyer had been obtained and that value was accepted until the latter part of april 1974.
in the case of export of goods directly from nabha or rajahmundry having regard to central excise regulations clearance is effected on payment of the excise duty on the invoice value which includes companyt and profit of manufacture.
122304/ working out to rs.
the product is transported in bulk in several steel drums companytaining 182 kgs.
14/ per kg.
in 1970 71 rs.
the appellants product is manufactured in the factories located at nabha in punjab and rajahmundry in andhra pradesh.
the companyy purported to be of c. number ce/20/bpe/70 dated 5.12.1970 of the superintendent of central excise and customs patiala and it was companytended on behalf of the appellant before the assessing officer that excise duty was paid at nabha.
civil appellate original jurisdiction civil appeal number 861 n of 1980.
and the delivered companyt including freight and insurance is rs.
