JUDGMENT
Ruma Pal, J.
1. The petitioner No. 1 is a registered dealer under the Central Sales Tax Act, 1956 (hereinafter referred to as “the 1956 Act”), and under the Bengal Finance (Sales Tax) Act, 1941 (hereinafter referred to as “the 1941 Act”).
2. The grievance of the petitioners is that the sales tax authorities are refusing to issue declaration forms either under the 1956 Act or under the 1941 Act. It is staled that the ground for such refusal is the petitioners’ failure to pay the arrears of sales tax dues. The petitioner No. 1 is, it is contended, being deprived thereby of the concessional rates of tax available
to registered dealers in contravention of section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985.
3. Petitioner No. 1 is admittedly liable to pay sales tax both under the 1956 Act and under the 1941 Act. In this case we are only concerned with the refusal of the sales tax authority to give declaration forms under rule 4 of the Central Sales Tax (West Bengal) Rules, 1958, to the petitioner No. 1. Inasmuch as the questions to be decided in this matter ultimately involve only a question of interpretation of statutory provisions the matter is being disposed of without affidavits.
4. My attention was drawn to the decision of this court in the unreported judgment of Commissioner1 of Commercial Taxes v. Hindustan Petroleum Corporation Ltd. since reported in [1991] 82 STC 157 (Cal). In that case the court refused to entertain a reference application even though the question sought to be referred pertained to the Central Sales Tax Act, 1956, on the ground that the procedural machinery under the 1941 Act had been made applicable to the 1956 Act by virtue of section 9 of the 1956 Act, It was held that by virtue of the provisions of the West Bengal Taxation Tribunal Act, 1987 ( hereinafter referred to as “the 1987 Act”) references in matters relating to the Central Sales Tax Act,1956, were to be decided by the Tribunal set up under the 1987 Act. The decision in my mind turned upon the language of section 9 of the 1956 Act, and is an authority for the proposition that in connection with matters relating to Central sales tax the procedure applicable under the 1941 Act including references must be followed.
5. The decision of this court referred to in the preceding paragraph of this judgment is in apparent conflict with the decision of the Taxation Tribunal itself in the case of Overseas Packaging Industries (P.) Ltd. v. West Bengal Commercial Taxes Tribunal [1990] 78 STC 267.
6. It is not necessary for me to resolve this dispute. The issue decided by this court in the unreported decision Commissioner of Commercial Taxes v. Hindustan Petroleum Corporation Ltd. since reported in [1991] 82 STC 157 (Cal), referred to above does not arise for determination here. The question in this case is whether the sales tax authorities can refuse to issue sales tax declaration forms under the 1956 Act having regard to the provisions of section 22(1) of the 1985 Act.
7. Section 8(1) and (4) of the 1956 Act provide :
“(1) Every dealer, who in the course of inter-State trade or commerce –
(a) sells to the Government any goods ; or
(b) sells to a registered dealer other than the Government goods of the description referred to in sub-section (3) ;
shall be liable to pay tax under this Act, which shall be 4 per cent of his turnover.
(4) The provisions of sub-section (!) shall not apply to any sale in the course of inter-State trade or commerce unless the dealer selling the goods furnishes to the prescribed authority in the prescribed manner-
(a) a declaration duly filled and signed by the registered dealer to whom the goods are sold containing the prescribed particulars in a prescribed form obtained from the prescribed authority ;”
Sub sections (3), (4) and (5) of section 13 of the 1956 Act empower the State Government to make rules to carry out the purposes of the 1956 Act.
In exercise of the powers conferred by the said sub-sections of section 13 of the 1956 Act, the State Government enacted the Central Sale’s Tax (West Bengal) Rules, 1958 (hereinafter referred to as “the 1958 Rules”).
Rule 4(1) and (2) of the 1958 Rules provide:
“Rule 4. Declaration inform C.~(1) A declaration referred to in clause (a) of sub-section (4) of section 8 of the Act shall not be given or accepted by a dealer except in form ‘C* obtained from the appropriate Commercial Tax Officer on application.
(2) The provisions of rule 27AA of the Bengal Sales Tax Rules, 1941, shall apply mutatis mutandis in the matter of application for and issue of Form ‘C referred to in sub-rule (1) above :”
8. Rule 4(2) in terms incorporates the provisions of the Bengal Sales Tax Rules, 1941 (hereinafter referred to as “the 1941 Rules”), into the 1958 Rules mutatis mutandis. The effect of such incorporation is as if the 1941 Rules to the extent applicable was enacted in the 1958 Rules. A similar position was considered by this court in the case of Md. Safi v. State of West Bengal, . In that case the court had to consider section 8 of the West Bengal Land Development and Planning Act, 1948, which provided that the provisions of the Land Acquisition Act, 1894, “shall so far as may be, apply”. The court held as follows (at page 98} :
“Legislation by incorporation is of common occurrence. The words ‘so far as may be, apply1 in section 8, the West Bengal Act (XXI of 1948)
are common words of legislation by incorporation, and is an expression interchangeable with the expressions ‘mutatis mutandis’ and ‘as far as applicable’ and like expressions. References may be made to the following Acts to illustrate this form of legislation : (a) Marriage Validation Act (II of 1892) (section 5), (b) Presidency-Small Cause Courts Act (XV of 1882) (section 43) and (c) Indian Succession Act (XXXIX of 1925) (section 268).
The effect of the words ‘so far as may be, apply’ is to put the provisions of the Land Acquisition Act into Act XXI [21] of 1948 just as if they had *been written into it for-the first time. As Lord Esher observed in Wood’s Estate, In re [1886] 31 Ch 607 at page 615 ; 55 LJ Ch 488 ;
‘ If a subsequent Act brings into itself by reference some of the clauses of a former Act, the legal effect of that as has often been held, is to write those sections into”the new Act just as if they had been actually written in it with the pen or printed in it and the moment you have those clauses in the later Act, you have no occasion to refer to the former. Act at all.’
In other words, we must read the Act XXI of 1948 in such a way as if all the provisions of the Land Acquisition Act were repeated or set out in full totidem verbis in the West Bengal Act XXI of 1948. ”
Therefore, by virtue of a legal fiction the provisions of rule 27AA of the 1941 Rules form part of the 1958 Rules and not that the 1958 Rules become part of the 1941 Rules.
9. The provisions of the 1987 Act for determination of matters relating to tax payable under the West Bengal Acts including the 1941 Act cannot, therefore, refer to Central sales tax matters.
10. The preamble to the 1987 Act makes it amply clear that the Taxation Tribunal has been set up for adjudication or trial of matters with respect to any tax under any specified State Act. Similarly under section 6 of the 1987 Act exclusive jurisdiction has been given to the Tribunal to adjudicate with respect to all matters of levy, assessment, collection and enforcement of any tax under any specified State Act.
11. This case does not pertain to the levy, assessment or collection of any tax under any specified State Act. Therefore, this court retains jurisdiction to determine the question raised by the petitioners relating to Centra) sales tax. In any event counsel in this case for the respondents fairly conceded that the point involving consideration of the provisions of the 1956 Act only could be decided by this court.
12.
The merits of the case may now be considered.
13. Petitioner No. 1 has been declared a sick industrial undertaking under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter referred to as “the 1985 Act”). On 23rd April, 1990, the Industrial Development Bank of India (hereinafter referred to as “the IDBI”) was appointed as the operating agency in respect of petitioner No. 1 by the Board for Industrial and Financial Reconstruction established under section 4 of the 1985 Act (hereinafter referred to as “the BIFR “). A scheme was prepared by the IDBI which was discussed at a joint meeting of the institutions, banks and promoters on 29th Jnne, 1990. Based on the consensus arrived at at the joint meeting, the scheme formulated by the IDBI was revised. The revised scheme for rehabilitating petitioner No. 1 contained a clause –
“Sales tax loan.–An amount of Rs. 38 lakhs would be made available by the State Government to meet the sales tax dues. This loan would be repayable in 9 years at interest rate of 6.75 per cent per annum. ”
On 25th May, 1989, the Finance Department of the Government of West Bengal issued a notification being Notification No. 1633-F.T. by which it was notified that in the interest of revival of sick industries, the State Government had decided to advance loans at concessional rates of interest for payment of sales tax arrears of the sick units. The procedure in respect of non-Government companies was that the sick units would approach the Commerce and Industries Department/Industrial Reconstruction Department of the State Government with a report in original to be obtained from the concerned Commercial Tax Officer on the amount of arrear dues for its consideration of sanctioning loan. The Commerce and Industries Department/Industrial Reconstruction Department would examine the proposal and on being satisfied it would obtain the approval of the Cabinet in consultation with the Finance Department. In addition, the loan would be a charge on the assets of the sick unit. The sanctioning of loans in such cases would, however, be considered only when such concessions formed an integral part of a rehabilitation package approved by financial institutions and the Government loan would be disbursed after the financial assistance from the institutions had been actually paid to the concerned sick unit. Orders sanctioning such loans in each individual case incorporating the terms and conditions of repayment would be issued by the concerned department with the concurrence of the Finance Department.
14. The amount of loan would not be paid in cash to the beneficiary company, whether owned by or under Government management or under private management, but would be adjusted towards the actual amount of sales tax dues, with the provision that the concerned drawing or disbursing officer would draw the amount of loan and make payment by an account payee cheque in favour of “Commissioner, Commercial Taxes, West Bengal account the concerned sick unit”.
15. All current dues on account of sales tax were required to be paid in time. The grant of a loan by the State Government is a “one time assistance” and future dues would not be funded.
16. The amount of sales tax loan which would be deposited with the Commissioner, Commercial Taxes, in the manner stated above would be drawn and paid after necessary documents, to safeguard the interest of Government duly vested by Government law officers, had been executed by the beneficiary company in each individual case.
17. Although in paragraph 20 of the writ petition it has been stated that the sales tax loan has been sanctioned by the State of West Bengal, no copy of the order of the State Government nor any particulars regarding the date of such sanction has been given by the writ petitioner. The court cannot, therefore, proceed on the basis that such a loan has been sanctioned by the State of West Bengal.
18. Section 22(1) of the 1985 Act, in so far as it is relevant, provides :
“22.(1) Where in respect of an industrial company … a sanctioned scheme is under implementation . . . then notwithstanding anything contained … no proceedings for the winding-up of the industrial company or for execution, distress or the like against any of the properties of the industrial company or for the appointment of a receiver in respect thereof shall lie or be proceeded with further, except with the consent of the Board or, as the case may be, the appellate authority.”
It is contended that the refusal of the sales tax authority to grant declaration forms, viz., in Form C comes within the phrase “the like” following the word “distress”.
19. Rule 27AA(2), in so far as it is relevant, provides as follows :
” (c) If the applicant for declaration forms has at the time of making the application defaulted in furnishing any return or returns, or statement or statements, as the case may be, under the Act, or any return or returns or statement or statements, as the case may be, under the Central
Sales Tax Act, 1956 (74 of 1956), together with the receipted challan or challans showing payment of tax, surcharge and additional surcharge due from him according to such return or returns for the furnishing of which the prescribed date or dates have already expired, the Commercial Tax Officer shall withhold the issue of declaration forms to him until such time as he furnishes — ‘
(i) such return or returns or statement or statements, as the case may be, together with such receipted challan or challans ; and
(ii) any other return or returns or statement or statements, as the case may be, together with the receipted challan or challans, showing payment of the tax, surcharge and additional surcharge due according to such return or returns or statement or statements, as the case may be, for the furnishing of which the prescribed date or dates may have expired after the date of the application : . . .
Provided further that in a case coming under clause (c) the Commercial Tax Officer may, instead of withholding declaration forms, issue such forms in such numbers and subject to such conditions and restrictions as he may consider reasonable, to an applicant, if in the opinion of the Commercial Tax Officer it is desirable in the interest of the collection of sales tax revenue to grant time to the applicant to pay up the arrears of tax, surcharge and additional surcharge, or interest in one lump or in instalments.
(d) Where the Commercial Tax Officer does not proceed under clause (a), clause (bb) or clause (c) or clause (cc) he shall issue the requisite number of declaration forms to the applicant.”
The question to be considered is whether the right of refusal of the sales tax authority to issue declaration forms to the petitioner has been restrained under section 22(1) of the 1985 Act. In other words can the refusal be considered to be within the phrase” execution, distress and the like”.
20. The word “distress” has been defined in Bradby Law of Distress, second edition, page 1 (as noted in Halsbury’s Laws of England, fourth edition, volume 13, para 201 ).
21. The following definition is given in Bradby Law of Distress (second edition).
1. “A distress is the taking of a personal chattel, without legal process, from the possession of a wrongdoer, into the hands of the party grieved,
as a pledge, for the redress of an injury, the performance of a duty, or the satisfaction of a demand.”
The characteristics of distress are therefore :
(a) An action to recover monies due ;
(b) taken summarily ;
(c) by retention of the goods of the debtor.
22. The meaning of execution has been given in Halsbury’s Laws of England, fourth edition, volume 17, para 401 as follows :
The word “execution” in its widest sense signifies the enforcement of or giving effect to the judgments or orders of courts of justice. In the narrower sense, orders by a public officer.
In the context of section 22(1), in my view, what is envisaged is against the properties of the company.
Both “distress” and “execution”, therefore, relate to methods of recovery of monies due from the industrial company. The phrase “the like” must, therefore, be read in the same context.
By refusing the declaration forms can it be said that the sales tax authorities were taking a like action ? In my view it can, provided such refusal is due .to the failure of the petitioner-company to pay its arrear dues and not on any other ground envisaged under rule 27AA. My reasons for so holding are as follows :
Firstly, the utilisation of the words “the like” would indicate that what is envisaged is not the same or identical procedure but a similar procedure.
Secondly, the object of the refusal to give sales tax declaration forms to petitioner No. 1 in this case is clearly to put pressure on petitioner No. 1 to clear its arrear dues. Unless the arrears are cleared petitioner No. 1 would not be permitted to avail of the concessional rate of tax provided under section 8(1) read with sub-section (4) of the 1956 Act, It is a coercive measure to recover dues from the applicant resorted to by the sales tax authorities summarily. The sales tax declaration forms have become a necessary adjunct of trade without which a trader cannot carry on competitive business.
Thirdly, the phrase “against” the properties of the industrial company must be construed as the movable and immovable properties and indicates any process by which the assets of the company including cash
is sought to be effected. For the reasons already stated, the withholding of the sales tax declaration forms under rule 27AA(2)(c) is an action “against the properties” of the petitioner company in that sense.
Fourthly, withholding of declaration forms under rule 27AA(2)(c) is an alternative to the normal mode of recovery of sales tax dues.
Section 11 of the 1941 Act which by virtue of section 9(2) of the 1956 Act is incorporated in the 1956 Act provides for the normal mode of recovery of arrears of taxes, viz., “as an arrear of land revenue as if it were payable to the Collector “. An arrear of land revenue is recoverable by attachment and sale of the defaulter’s property. This mode of recovery of arrears of sales tax dues would clearly be covered under section 22(1). See the decision of the Supreme Court in Gram Panchayat v. Shree Vallabh Glass Works Ltd. [1991] 71 Comp Cas 169 (SC).
22. In this background it would be necessary to consider the object of section 22(1) of the 1985 Act. It appears to me that the dominant object is to suspend legal processes which would have the effect of interfering with the carrying on of the business of a sick industrial unit. The sick industrial unit is sought to be rehabilitated under the protection and control of the BIFR and its running is subject to any constraints that may be placed by a scheme framed under the 1985 Act. This object has also been stated in the Statement of Objects and Reasons to the 1985 Act. The scheme as framed makes provision for the payment of the arrears of sales tax from a loan to be received by petitioner No. 1 from the State Government although it does not appear that such a loan has yet been sanctioned.
23. In the circumstances it would appear that for the purposes of section 22(1) of the 1985 Act, withholding of the sales tax declaration forms on account of non payment of arrears of sales tax dues is a similar process such as execution and distress. It follows that the sales tax authorities cannot in such circumstances withhold such forms except with the consent of the BIFR. It is made clear however that the withholding of declaration forms on any other ground is not being considered in this judgment.
24. Therefore, it is directed that the sales tax authorities will not withhold the declaration forms on account of non payment of arrears of sales tax dues. The sales tax authorities will however be at liberty to make an application to the BIFR for its consent to the withholding of sales tax declaration forms under the 1956 Act.
25. The writ petition is disposed of accordingly. There will be no order as to costs.
