CALCUTTA JUTE MANUFACTURING CO. AND ANR. versus COMMERCIAL TAX OFFICER AND ORS.

Citation: [1997] SUPP. 1 S.C.R. 474 · Decided: 08-07-1997 · Supreme Court of India · Bench: S.C. SEN · Disposal: Dismissed

Judgment (excerpt)

A 
CALCUTTA JUTE MANUFACTURING CO. AND ANR. 
v. 
COMMERCIAL TAX OFFICER AND ORS. 
JULY 8, 1997 
B 
[S.C. SEN AND K.T. THOMAS, JJ.) 
Sales Tax: 
Bengal Financial (Sales Tax) Act, J941/West Bengal Sales Tax Act, 
c J954. 
Sections 6-B and JO-A and 11/Section 4-AAA-Turnover tax-Asses-
see unsuccessfully challengi,ng the validity of provision for turnover tax in 
Section 6-B without entertaining any doubt as to their liability to turnover tax 
thereunder in case the provision was found to be valilf-Whether appellant 
D liable to pay interest on the tax amount for the period under litigation before 
the High Court-Held, 'Yes'. 
Return within the meaning of section JO-A-Furnishing of return 
without mentioning the amount of turnover or tax payable under section 
6-B-Held, amounts to failure to furnish a return "refeTTed to in section JO" 
E within the meaning of Section JO-A. 
F 
Turnover tax-Interest-Furnishing of return-Payment of tax as per 
return-Whether incun-ed liability to pay interest under Section JO-A (2) on 
the turnover tax at the very moment (lSsessment was made under Section 
11-Held, 'Yes'. 
Injunctions-Grant of by the courts-Held, could not lead to the in-
ference that the High Court was satisfied of a strong prim a f acie case for the 
appellants. 
G 
Legal Maxims-'Actus cwiae neminem gravabit'-Meaning and ap-
plicability of' 
A new Section 6-B was included in the Bengal Finance (Sales Tax) 
Act, 1941 ('Act') and an identical provision Section 4-AAA was included in 
the West Bengal Sales Tax Act, 1954, providing for imposing a tax on the 
H turnover of a dealer if annual aggregate gross turnover exceeded Rs. Fifty 
474 
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CALCUTIAJUfE MANUFACI'URJNG CO. v. COMMERCIAL TAX OFF1CER 475 
lakhs. 
A 
Appellants, concerned with Section 6-B, challenged its validity in writ 
petitions filed before the High Court. The High Court injuncted the 
Government from collecting such tax on turnover, but ultimately the writ 
petitions were dismissed. Therefore, the liability of the appellants to pay 
tax on the turnover became conclusive and appellants remitted the tax B 
amount accordingly. 
In the meantime, Government of West Bengal introduced yet another 
provision as Section 10-A in the Act by which interest at the rate of 2% per 
month was charged on the tax amount payable by the dealer during the C 
period of default. So demands were made on the appellants to pay interest 
on the tax amount. 
Appellants disputed their liability to pay interest mainly on two 
grounds, (i) that since appellants have furnished the returns and paid full 
tax as per such returns, they were not liable to pay interest under Section D 
10-A; and (ii) even otherwise they were not liable to pay interest on the tax 
amount as its non-recovery was the effect of the injunction order granted 
by the High Court. 
' 
Tribunal, however, dismissed the petitions filed by the Appellants. 
Hence this appeal. 
E 
The appellants contended that the appellants could not be mulcted 
with interest on the tax amount as they were bona fide contesting the 
validity of Section 6-B of the Act. It was also contended that as the 
appellants had furnished the returns and paid the tax as per such returns, 
they were not liable to pay interest under Section 10-A of the Act. Finally 
it was contended that applying a less onerous interpretation, the appel· 
)ants who had filed the returns according to their own estimation should 
not be considered as defaulters in furnishing the return. 
Dismissing the appeals, this Court 
HELD : 1. It was the constitutional validity of Section 6-B of the 
Bengal Finance (Sales Tax) Act, 1941 which was challenged by the appel· 
lants in the earlier writ petitions before the Calcutta High Court and which 
finally ended up in upholding of its validity. Hence, there was no question 
F 
G 
of the assessee waiting for the determination and the turnover as there was H 
476 
SUPREME COURT REPORTS [1997] SUPP. 1 S.C.R. 
A no dispute on that aspect. [483-C-E] 
J.K. Synthetics Ltd. v. Commercial Tax Officer, [1994] 4 SCC 276,, 
distinguished. 
Hindustan Sugar Mills Limited v. State of Rajasthan, [1978] 4 SCC 
B 271 and Associated Cement Co. Ltd. v. Commercial Tax Officer, (1981) 48 
STC 466, referred to. 
(2) The tax amount which the appellants should have paid as per 
Section 6-B remained with the appellants during the entire period and they 
would have earned good profit with that amount. The State, to which the 
C tax amount should necessa

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