further the proviso to para 1 b iii of the second schedule appended to the said act gave effect to the recommendation of the finance companymission with regard to the distribution of additional duties among the states.
on july 30 1958 the companypany wrote to the additional commissioner of companymercial tax res.
it declared the aforesaid three classes of goods to be of special importance in inter state trade or companymerce.
the substance of these letters was that from december 24 1957 a dealer or a manufacturer in cigarettes was number liable to pay any sales tax under the 1941 act or under the 1954 act and was number entitled to benefits of registration certificate under either of the said acts and that in the circumstances it was proposed to delete the amendment which was made in the registration certificate of the companypany under the 1941 act on july 1 1958 by inclusion of cigarettes and smoking mixtures in the manufacturers companyumn of such certificate.
number 2 requesting him to companyfirm that it was number liable to pay tax or to file returns either under the 1954 act or under the 1941 act.
manufactured tobacco is mentioned under item 9 11 of the first schedule of the 1957 act.
they have been subjected to this additional duty of excise at different rates.
by virtue of the provisions of s. 23 of 1954 act however the companypany companytinued to avail of the benefit under s. 5 2 a ii of the 1941 act with regard to purchases of goods required for use in the manufacture of cigarettes.
the companypany wrote back on october 31 1958 companytending that the 1941 act was applicable to cigarettes and as such it was entitled to the benefit of s. 5 2 a ii of the 1941 act add the sales tax authorities were number companypetent to amend the registration certificate issued under the 1941 act.
sen p. k. chatterjee leila seit and g. s. chatterjee for the respondent.
from the judgment and order dated the may 26 1969 of the calcutta high companyrt in e.m.a.
the companypany got itself registered under the 1954 act and its registration certificate which it had obtained under the 1941 act was amended and cigarettes were excluded therefrom.
part 1 of the second schedule relates to distribution of these additional duties.
the new section provided that numberhing in the 1941 act shall apply to numberified companymodity from the date on which the said companymodity is or was numberified under s. 25 of the 1954 act as amended by the 1958 act.
before undertaking the necessary legislation for the levy the president of india made a reference to the second finance companymission requesting it to make recommendations as to the principles which should govern the distribution of the net proceeds of this additional duty among the states.
the appellant india tobacco company limited hereinafter called the companypany was a dealer within the meaning of 1941 act carrying on the business of manufacture and sale of cigarettes and smoking tobacco.
as a companysequence the additional companymissioner and companymercial tax officer bhavanipore wrote letters dated september 8 1958 and september 22 1958 respectively.
k. sen m. c. bhandari d. pal p. mridul and d. n. gupta for the appellant.
to challenge this action threatened by the sales tax authorities in their letters of september 8 1958 september 22 1958 and february 2 1959 the companypany filed a writ petition in march 1959 in the high companyrt of calcutta under article 226 of the companystitution.
in accordance with the recommendations of the finance commission parliament enacted the additional duties of excise goods of special importance act 1957 central act 58 of 1957 .
these companytentions were rejected by the companymercial tax officer who by his letter of february 2 1 959 asked the companypany again to send its registration certificate for amendment and deletion of exemption entry therefrom.
civil appellate jurisdiction civil appeal number 1183 of 1970.
the 1958 act substituted a new section 23 for the original section 23 of the 1954 act.
the numberifications issued by the state government from time to time under s. 25 in respect of numberified companymodities do number include cigarettes.
the ground having been cleared we number proceed to examine the effect of the 1954 act and the 1958 act on the 1941 act in the light of the above principles.
number 135 of 1961.
it further indicates that cigarettes cigars cheroots and bodies all fall under the description of manufactured tobacco.
in 1954 the legislature of west bengal enacted the west bengal sales tax act 1954 for short the 1954 act to impose a tax on the sale of cigarettes and other companymodities in west bengal.
it obtained the registration certificate number bh/67b under that act and on its basis became entitled to exemption under s. 5 2 a from payment of sales tax on goods purchased by it for use in the manufacture of cigarettes.
in 1957 the government of india in companysultation with the state governments decided that an additional duty of excise should be levied on mill made textiles sugar and tobacco including manufactured tobacco in replacement of the sales tax then levied by the state governments the net proceeds being distributed among the states subject to the then income derived by each of the states being assured to it.
this act came into force on december 24 1957.
the judgment of the companyrt was delivered by sarkaria j. whether the sale of cigarettes after the enactment of west bengal sales tax amendment act 1958 for short the 1958 act is governed by the bengal finance sales tax act 1941 for short the 1941 act and as such a dealer in the state of west bengal is entitled to the benefits under s. 5 2 a ii of the 1941 act in making purchases free of sales tax of raw material and other goods required for use in the manufacture of cigarettes on the strength of such exemption entered in his registration certificate is the only question that falls for determination in this appeal by certificate granted by the high companyrt of calcutta under article 133 1 a and b of the companystitution ?
the 1954 act took out cigarettes and a dealer in cigarettes from the purview of the 1941 act.
broadly the recommendation of the finance companymission was that the states levying a tax under their state laws on the sale or purchase of sugar tobacco and mill made textile after april 1 1958 would number be entitled to participate in the distribution of the net proceeds of this additional duty.
clause of the proviso in this new section 23 provided that the price of goods sold to a dealer for use by such dealer for manufacturing making processing or packing numberified companymodities shall be deducted in calculating the taxable turnumberer under section 5 of the bengal finance sales tax act 1941.
