BHAI JASPAL SINGH AND ANR. versus ASSISTANT COMMISSIONER OF COMMERCIAL TAXES AND ORS.

Citation: [2010] 14 S.C.R. 41 · Decided: 22-10-2010 · Supreme Court of India · Bench: D.K. JAIN · Disposal: Dismissed

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Judgment (excerpt)

[2010) 14 (ADDL.) S.C.R. 41 
BHAI JASPAL SINGH AND ANR. 
v. 
ASSISTANT COMMISSIONER OF COMMERCIAL TAXES 
AND ORS. 
(Civil Appeal No. 4277 of 2002) 
OCTOBER 22, 2010 
[D.K. JAIN AND H.L. DATIU, JJ.] 
Sa/es Tax: 
A 
B 
c 
West Bengal Sa/es Tax Act, 1954 - s.4AA - Exemption 
Notification no. 1428-F. T. dated 26-5-1994 - Notification 
providing for exemption from tax on sale of fruit juices and 
concentrates manufactured in small scale industrial units 
where "investment" in plant and machinery of such units did 
D 
not exceed Rs.5 lakhs - Whether expression "investment" to 
be understood as investment made by a small scale 
industrial unit after depreciation on plant and machinery -
Held: "Investment" must be understood according to its 
common business and commercial usage - Expression 
E 
"investment" not subject to impact of depreciation in the value 
of plant and machinery - In computing the valuation of plant 
and machinery, only the cost price/purcha.se price of the 
equipment invested by the assessee is to be taken into 
account - On facts, assessee not entitled to exemption from 
payment of sales tax as its investment was more than Rs.5 
F 
lakhs before the periods in question which remained 
unchanged - West Bengal Sa/es Tax Rules,, 1995 - r.41 _.. 
Bengal Sa/es Tax Rules, 1941 - r.3(116). 
West Bengal Sa/es Tax Act, 1954 - s.4AA - Exemption 
G 
Notification no. 1428-F. T. dated 26-5-1994 - Exemption 
Notification - Construction and interpretation of - Held: 
Meaning of the words given in the exemption notification is 
to be gathered from the language employed in the notification 
41 
H 
A 
B 
c 
D 
E 
F 
G 
H 
42 
SUPREME COURT REPORTS [2010] 14 (ADDL.) S.C.R. 
- No requirement of liberal construction where the notification 
does not apply to the assessee in the first place. 
West Bengal Sa/es Tax Act, 1994 - s.31 - Bengal 
(Finance) Sales Tax Act, 1941 - s.10A - Interest on default 
of tax - Date from which payable - Difference between interest 
and penalty - Held: Interest is compensatory in character and 
is imposed on an assessee who has withheld payment of any 
tax as and when it is due and payable - It is different from 
penalty which is penal in character - Where tax due on the 
basis of quarterly return is not paid before the expiry of the 
last date of filing of such return under the Act, it is not 
necessary to issue any notice of demand but on the default 
being committed by the dealer, he becomes liable to pay 
interest on the amount of such tax from the last date of filing 
of the return prescribed under the Act. 
The assessee, a small scale industrial unit engaged 
in manufacturing juice, jelly, jam etc., was registered as 
a dealer under the Bengal Finance (Sales Tax) Act, 1941, 
the West Bengal Sales Tax Act, 1954, and was later 
registered under the West Beilgal Sales Tax Act, 1994. 
The assessee filed returns for the assessment periods 
01.04.1995 to 30.04.1995 and 01.05.1995 to 31.03.1996 and 
claimed exemption from payment of sales tax mainly 
relying on the exemption notification issued by the State 
Government bearing No. 1428-F.T. dated 26.05.1994 and 
Rule 41 of West Bengal Sales Tax Rules, 1995. According 
to the assessee, its investment in plant and machinery 
in its unit during the period from 01.04.1995 to 30.04.1995 
and from 01.05.1995 to 31.03.1996 was less than Rs. 5 
lakhs and accordingly, it was entitled to get the tax 
exemption under Rule 3(116) of the Bengal Sales Tax 
Rules, 1941 for the first period and by virtue of the 
notification dated 26.05.1994 and Rule 41 of the 1995 
Rules for the second period. The Asst. Commissioner of 
Commercial Taxes disallowed the assessee's claim for 
BHAI JASPAL SINGH v. ASSISTANT COMMISSIONER 43 
OF COMMERCIAL TAXES 
exemption from payment of sales tax for both the periods A 
and also levied interest as provided under Section 10A 
of the Act, 1941 and Section 31 of the Act, 1994. He held 
that the benefit of exemption from payment of sales tax 
could not be granted since the assessee did not fulfill all 
the conditions prescribed in the notification granting B 
exemption from payment of sales tax and also the 
conditions specified in Rule 41 of the 1995 Rules. The 
Assessing Officer took the book value of the plant and 
machinery as on 31st March, 1980 at Rs. 2,27,148.78/- and 
after the addition made from 1981 to 1986-1987, took the c 
value of investment of plant and machinery for the 
assessment year 01.05.1995 to 31st March, 1996 as 

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