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2001 DIGILAW 561 (JHR)

Shushila Koke, Ranchi v. State Of Jharkhand

2001-08-10

GURUSHARAN SHARMA, VINOD KUMAR GUPTA

body2001
ORDER Gurusharan Sharma, J. 1. These two writ applications have been filed for quashing Government Circular Letter dated 29.1.2000 (Annexure 8). As common question is involved in both the writ applications, they have been heard together and are disposed of by a common order. 2. Petitioners, namely. M/s, Super Fuels and M/s. Shushila Coke and Minerals are engaged in manufacturing soft coke having its manufacturing units respectively at villages Memotand and Rowta, within Hazaribagh district. Both are industrial units of District Industries Centre, Hazaribagh and are registered under Section 14 of the Bihar Finance Act, 1981 (hereinafter referred to as the Act) as also under Section 7 of the Central Sales Tax Act. 1956. M/s. Coal India Limited have provided permanent linkage for release of steam coal every month to the petitioners for manufacturing soft coke. 3. Pursuant to Industrial Policy. 1995, State of Bihar issued Notification No. S.O. 478, dated 22.12.1995 (Annexure 6) under Section 7(3)(b) of the Act grating exemption from payment of sales tax on purchase of raw materials, which was required by industries concerned directly for use in manufacturing goods to the newly set up industries, which met the conditions mentioned therein. A declaration in form ga was prescribed for availing the benefit of tax free purchase. 4. Accordingly petitioners units were exempted from payment of sales tax on purchase of raw materials for manufacturing soft coke during the period 22.8.1998 to 27.12.2006. for which petitioners were required to furnish a declaration in form ga to the registered dealer from whom the goods were purchased. Form ga was being issued from a book duly authenticated by the circle-in-charge of the Commercial Taxes Department and petitioners were maintaining a register regarding the declaration in form ga showing the details mentioned in the said declaration form, which was authenticated by Commercial Tax Officer of the concerned circle. Account of goods purchased on the basis of declaration in form ga was required to be maintained by the petitioners to be produced before the Commercial Taxes Department, on demand and the selling dealer had to produce declaration in form ga obtained from purchasing dealer before the assessing authority at the time of assessment. 5. Account of goods purchased on the basis of declaration in form ga was required to be maintained by the petitioners to be produced before the Commercial Taxes Department, on demand and the selling dealer had to produce declaration in form ga obtained from purchasing dealer before the assessing authority at the time of assessment. 5. There was no condition that at the time of authentication of the declaration in form ga the authority of Commercial Taxes Department should insist upon the concerned unit to fill up all the "blank spaces provided in form ga rather a dealer was expected to fill up all the columns prescribed therein at the time of purchasing raw materials. However. Rule 45 of the Bihar Sales Tax Rules, 1983 provided that under the circumstances mentioned therein the authority concerned could have refused issuance of said declaration form. 6. The Commissioner of Commercial Taxes, Bihar issued Circular Letter No. Bik rikar/Misc./56/97/546. dated 29.1.2000 (Annexure 8) addressed to all the subordinate authorities, inter alia, putting further conditions in paragraph 4 thereof with respect to authentication of declaration in form ga. namely, that at the time of making such application for authentication of said form, its blank columns regarding order number and date, bill/challan etc. must be duly filled in. Form ga, therefore, cannot be issued unless those blank columns with full details were duly filled up. 7. After coming into being of the new State of Jharkhand, all the Acts and Rules of the Unified Bihar have been adopted by the State of Jharkhand and Sales Tax Administration in the State is being run on the basis of Bihar Finance Act, 1981. 8. Petitioners are required to furnish declaration in form ga to Central. Coalfields Limited at the time of purchase of coal in order to avail the facility of tax exemption and if such declaration in form ga duly authenticated by the Commercial Taxes Authorities is not furnished before hand, the Central Coalfields Limited charges 4% sales tax on the sale price of coal and so only after depositing the aforesaid sum as sales tax, although petitioners have been granted exemption certificate for that, sale order is issued. 9. Mr. 9. Mr. Poddar, counsel for the petitioners, submitted that neither the Act nor the Rules authorise the Commissioner to issue the impugned circular (Annexure 8) and as such it is without sanction of law and conditions prescribed therein have the effect of denying exemption of sales tax on purchase of raw materials, which was communicated to the petitioners by exemption certificate issued under the Notification (Annexure 6). According to Mr. Poddar. the circular in question is not workable and is fit to be quashed. 10. Perusal of Annexure 8 reveals that such procedure was already in existence in respect of form F to be issued under the provisions of Central Sales Tax (Regulation and Turn Over) Rules, 1957 and such form is issued after duly filled up. Further, anticipating the situation which the petitioners are said to have been facing that the Central Coalfields Limited was not issuing sale order, unless the petitioners furnish declaration in form ga to them after getting it duly authenticated by Commercial Taxes Authorities and insisted the petitioners to deposit sales tax @ 4% on the sale price of coal in absence of duly authenticated declaration form ga, at the time of deposit of money for such purchase and as such made a provision to the effect that if the purchaser unit shows requirement of such declaration form ga for purchasing raw materials in advance, then on the basis of proforma invoice also blank form can be filled up by the unit concerned and the authorities can issue the same after authentication of declaration. 11. Nothing has been pointed out to show that the circular letter (Annexure 8) was in any manner in conflict with any statutory provision. 12. In the counter affidavit filed on behalf of respondents it has been asserted that the circular in question was issued by Commissioner of Commercial Taxes in his authority of superintendence and he was empowered to issue such circulars in order to check the misuse of tax exemption and thus to regulate the provisions of law. It cannot be said to be unlawful and without any authority. It formed basis of law and was binding. 13. It cannot be said to be unlawful and without any authority. It formed basis of law and was binding. 13. In the aforesaid circumstance, the petitioners are not prejudiced or harassed pursuant to the impugned circular and it has been issued after taking into consideration all the pros and cons of the matter and is not required to be interferred with by this Court. 14. There is no merit in these writ ap plications and the same are, accordingly, dismissed. 15. Writ applications dismissed.