JUDGMENT
Suhas Chandra Sen, J.
1. The petitioners set up a small-scale industry for manufacturing electrical stampings and lamination cores. On 30th May, 1981 the petitioners made an application under Rule 3(66) of the Bengal Sales Tax Rules, 1941 for exemption of sales tax on goods manufactured arid sold by the petitioners and an eligibility certificate was duly granted by the Assistant Commissioner of Commercial Taxes, Burrabazar Circle, the respondent No. 3, for the period 1st April, 1981 to 31st March, 1982, by an order dated 18th November, 1981.
2. Thereafter, on 23rd December, 1982 the petitioner made an application for renewal of the eligibility certificate for the period 1st April, 1982 to 31st March, 1983. On 29th April, 1983 the petitioners also applied for the renewal of the eligibility certificate for the period 1st April, 1983 to 31st March, 1984.
3. On 1st March, 1985 the petitioners’ application for grant of eligibility certificate for the period 1st April, 1982 to 31st March, 1983 was rejected by the respondent No. 3. The petitioners made an application for revision of the order before the respondent No. 1 under Section 20(3) of the Bengal Finance (Sales Tax) Act, 1941. The respondent No. 2, the Additional Commissioner of Commercial Taxes, dismissed that application by an order dated 19th May, 1986.
4. It appears from the order passed by the Additional Commissioner on 19th May, 1986 that the petitioners’ application for renewal of eligibility certificate was rejected on the ground of the petitioners’ failure “to issue serially numbered bills for sale of manufactured goods”. It was admitted by the authorised representative of the petitioners before the Additional Commissioner, that the bills raised against sales of manufactured goods were not serially numbered.
5. In the writ petition, it has been stated on behalf of the petitioners, that the Superintendent of Central Excise, Range XV, Calcutta by an order dated 5th August, 1981 had directed the petitioners to insert a code number on all the clearance documents/delivery challans having printed serial numbers for effective clearance of goods from the factory of the petitioners. The petitioners, in order to comply with the said direction, had issued delivery challans serially numbered as well as five challans bearing numbers 38/82-83, 39/82-83, 43/82-83, 44/82-83 and 60/82-83 in respect of resale of the goods for delivery effected from the petitioners’ factory-cum-godown. The petitioners also issued bills having similar numbers in respect of those challans. It has been stated by the petitioners that a separate account for such sale and purchase was maintained by the petitioners. It has further been stated by the petitioners that the total sale price of the goods was Rs. 14,823.41 only. Having regard to the volume of the business done by the petitioners this was a very small amount for which renewal of registration should not have been denied to the petitioners under Rule 3(66) of the Bengal Sales Tax Rules, 1941.
6. The second point urged on behalf of the petitioners is that the application of the petitioners for renewal was kept pending unnecessarily for more than two years. This was contrary to the specific direction and/or departmental circular being Circular No. 519 dated 18th August, 1980 for disposal of the application within two months from the date of receipt of such application.
7. Lastly, it has been contended that in any event, the petitioners had complied with the requirements of maintaining separate books of accounts for the new industrial undertaking and also of issuing serially numbered bills for the goods manufactured in its small-scale industry. Therefore, there cannot be any question of denial of the benefit of renewal of registration to the petitioners. It is not required by the Rules that the serially numbered bills could not be utilised for any business other than the business of new industrial undertaking.
8. I have carefully considered the argument of the petitioners. The departmental circular issued by the Commissioner of Commercial Taxes dated 18th August, 1980 merely states “It is again reiterated that applications for eligibility certificates are to be disposed of expeditiously by the Assistant Commissioner preferably within two months from the date of receipts of such application”. It will be seen from the wording of the circular that the Commissioner was not laying down a time-limit for passing an order on an application received for grant of eligibility certificate but was directing disposal of such applications expeditiously “preferably within two months” from the date of receipt of such application. Moreover, it appears from the circular that in disposing of the application for eligibility certificate, the Assistant Commissioner had to accept full responsibility. The Assistant Commissioner may obtain enquiry reports from either a Commercial Tax Officer or an Inspector. In this case, the application for renewal of eligibility certificate for the year 1982-83 was made as late as on 23rd December, 1982. Undoubtedly, there has been delay on the part of the Additional Commissioner in disposing of that application. But since there is no prescribed period of limitation, I am unable to strike down the order passed on 19th May, 1986 on the ground of gross delay or limitation.
9. The Additional Commissioner has referred in his order dated 1st March 1985 to the inspection report and has stated that it was clear from the report that the dealer did not issue sale bills serially numbered for the goods manufactured in his small-scale units. The report was made known to the dealer. On perusal of the books of accounts the Assistant Commissioner recorded that he was satisfied that the dealer did not issue bills serially for the sale of goods manufactured in his small-scale industrial unit.
10. It was contended on behalf of the petitioners that the bills were serially numbered. The fact that a few such bills serially numbered were utilised in connection with sale of goods which were not manufactured by the small-scale industrial unit of the petitioners cannot make any difference to the position. So long as the numbered bills were utilised by the petitioners for sale of goods manufactured by the small-scale industrial unit of the petitioners, the petitioners could not be said to have broken any of the conditions of Rule 3(66a).
11. I am unable to uphold this contention because the first proviso to Rule 3(66a) requires that the dealer will be eligible to claim the benefit only if he keeps separate accounts in respect of such newly set up small-scale industry. For the purpose of maintaining separate account, serially numbered cash/credit memos for sale of goods manufactured in such industry have to be issued. If the serially numbered cash/credit memos are also utilised for recording sales of goods which have not been manufactured in such industry, then the requirement of the law is not fulfilled. It clearly appears from the proviso that separate accounts must be maintained for the newly set-up industry and in aid of that, separate cash/ credit memos serially numbered as well as vouchers and other documents will have to be maintained.
12. If any exemption is granted to a dealer and conditions have been laid down for obtaining that exemption, the dealer must strictly comply with all the requirements in order to claim the exemption. It is for the dealer to establish that he has strictly complied with all the requirements of law. Rule 3(66a) not only confers upon the petitioners the right to claim the benefit of tax exemption but also lays down the conditions for availing of this right. If the conditions are not strictly complied with, the petitioners cannot contend that the eligibility certificate should have been renewed in spite of that.
13. The first point urged in this case, however, needs some consideration. The petitioners have stated that the petitioners have fulfilled all the conditions laid down under the Rules. However, by mistake or by force of circumstances, the petitioners had issued only five bills for small amounts amounting in all to Rs. 14,823.41 only out of the serially numbered bills in respect of goods that were not manufactured in the new industrial undertaking set up by the petitioners. Having regard to the total volume of business done by the petitioners the amount was negligible.
14. In the affidavit of Rabindra Nath Roy, the Additional Commissioner of Commercial Taxes, affirmed on 2nd December, 1986, it has been generally stated that the allegations contained in paragraphs 15 to 22 are denied and disputed. It has been stated “In the instant case, what has been found on examination is that the petitioner did not issue such serially numbered bills for sale of manufactured goods which is one of the prime conditions to be fulfilled for the purpose of entitlement to renewal of eligibility certificate under the proviso to Rule 3(66)(ii). On the contrary, I say that the petitioners were found upon examination of books of accounts to have broken the serials of the cash memos in respect of sales of manufactured goods by including therein a number of his resales of goods purchased locally…”. This really raises a disputed question of fact. Moreover, if the petitioner was buying and selling goods as well as manufacturing them, the accounts should have been maintained separately. The petitioner should have taken care to see that there is no overlapping in the accounts and the serially numbered bills or challans which were meant for the newly set up industrial unit of the petitioner were not utilised for other trading transactions.
15. In the facts of this case, I am, therefore, unable to come to finding of fact and uphold the contention that the deviations from the required conditions being trivial, the respondents should have overlooked the deviations and should have held that there was substantial compliance with the requirements of law.
16. It was also urged on behalf of the petitioner that the delay in disposal of the case by the respondents have seriously prejudiced the petitioner. When the goods were sold, the petitioner did not collect the sales tax on the assumption that the eligibility certificate would be renewed in due course. .But as a result of the delay, a situation has been brought about where the petitioner stands to lose due to the negligence of the respondents. The petitioner has not collected any sales tax and is not in a position to collect any tax from its customers. The petitioner will now have to pay sales tax on the goods manufactured and sold in its newly set up industrial unit.
17. In my judgment, this argument is also without any substance. The period in question in this case is 1st April, 1982 to 31st March, 1983. The petitioner’s application for renewal of the eligibility certificate was made on 23rd December, 1982. In other words, goods were sold by the petitioner without realising sales tax in anticipation of grant of extension of the eligibility certificate. According to the petitioner, the time-limit of disposal of the eligibility certificate was two months from the date of receipt of the application. In that event, the petitioner’s application should have been disposed of on or before 23rd February, 1983. I fail to see how the petitioner would have stood in a better position had the petitioner’s application been disposed of on 23rd February, 1983. At the highest, it can be argued on behalf of the petitioner that the petitioner could have collected sales tax on the sales effected during the period 23rd February, 1983 to 31st March, 1983. No particulars of sales effected during this period has been given.
18. Moreover, the eligibility certificate has not been renewed or extended because of the default of the petitioner. An application for extension was made belatedly on 23rd December, 1982. There is no explanation why the application was made at such a belated stage on the four quarters ending on 31st March, 1983.
19. This writ petition, therefore, must fail and is dismissed.
20. There will be no order as to costs.
21. However, it is made clear that the petitioner’s application for extension of the eligibility certificate will have to be considered on merit for the period 1st April, 1983 to 31st March, 1984 and the subsequent periods. If the petitioner has cured the defects and has fulfilled all the requirements of law, the eligibility certificate must be granted to the petitioner irrespective of defects found in the maintenance of accounts for the period 1st April, 1982 to 31st March/1983.
22. I have not expressed any opinion on the argument that there was substantial compliance with the requirements of law by the petitioner. Out of the numbered bills/challans, only five bills/challans were issued for transactions that did not relate to the new industrial unit of the petitioner. Having regard to the total turnover of the new industrial undertaking, the alleged breach was of trivial nature and should have been condoned. This point should have been raised before the Additional Commissioner so that the facts could be investigated and a decision could be taken on this aspect of the matter. The petitioner will be at liberty to apply to the Additional Commissioner for a review of the order passed on 19th May, 1986 within a period of one month from date. If such an application is made, the Additional Commissioner is directed to consider the review application and pass an order within a period of four months from the date of receipt of the application after giving a hearing to the petitioner. The Additional Commissioner will consider whether there was substantial compliance of the condition and the breach of the conditions committed by the petitioner is of so trivial in nature as to merit condonation. I make it clear that the Additional Commissioner will be at liberty to pass such order in accordance with law as he thinks fit after investigating the facts of the case.
