COMMERCIAL TAX OFFICER AND ORS. versus EMKAY INVESTMENTS PVT. LTD.

Citation: [1996] 2 S.C.R. 1026 · Decided: 23-02-1996 · Supreme Court of India · Bench: B.P. JEEVAN REDDY, K.S. PARIPOORNAN · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
COMMERCIAL TAX OFFICER AND ORS. 
v. 
EMKA Y INVESTMENTS PVT. LTD. 
FEBRUARY 23, 1996 
H 
[B.P. JEEVAN REDDY AND K.S. PARIPOORNAN, JJ.) 
West Bengal Sales Tai Rules, 1941: 
Rule 3(66a)-New industly exempt from payment of sales-ttD."-ln 
C respect of a p01tion of its products, the manufacturer using the brand name 
of another company-Sales tax auth01ities holding that the manufacturer not 
entitled to the exemption-Tribunal's finding that it applied only to a certain 
p01tion of the products-But the Tlibunal decl01ing that the manufacturer 
entitled to exemption in respect of all its products--On appeal, held, the 
manufacturer not entitled to the benefit of the exemption for which trade mark 
D or brand name of an existing industrial unit is used-Howeve1; in respect of 
its other produ_cts it is entitled to claim the benefit. 
E 
F 
G 
CIVIL AFf>ELLATE JURISDICTION : Civil Appeal No. 3848 of 
1996. 
From the Judgment and Order dated 8.10.93 of the West Bengal 
Taxation Tribunal in Case No. RN-103 of 1992, 
H.N. Salve and J.R. Das for the Appellants. 
P.P. Tripathi for the Respondents. 
The following Order of the Court was delivered : 
Heard counsel for the parties. 
Leave granted. 
This appeal is preferred against the judgment of the West Bengal 
Taxation Tribunal. The respondent is a new unit engaged in the manufac-
ture of plywood. It is entitled to exemption from p_C)yment of sales tax, being 
a new industry as contemplated by Rule 3(66a) of the West Bengal Sales 
H Tax Rules, 1941. It, however, appears that in respect of a portion of its 
1026 . 
l 
1 
COMML.TAXOFFICERv. EMKAYINVESTMENTSPVT.LID. 
1027 
products, it is using the brand name "M/s. Merinoply" which brand name A 
belongs to another company called "M/s. Marinoply and Chemicals 
Limited". 
Relying upon the Explanation to Rule 3(66a), the sales tax authorities 
denied the certificate enabling the respondent to claim exemption from B 
sales tax. Their case was that since the respondent is using the brand name 
of another unit, which is not entitled to the said exemption, the respondent 
is disentitled from claiming any exemption. However, when the matter 
reached the Tribunal, it held in favour of the respon'tlent by a majority of 
2:1. It found that the Marinoply brand name is not applied to all the 
products manufactured by the respondent but only to a certain portion of C 
its products. Notwithstanding this finding, it allowed the respondent's 
appeal in full and declared it to be entitled to exemption in respect of all 
the products manufactured by it. Rule 3(66) insofar as it is relevant reads 
thus: 
"Rule 3. 
D 
(66a)(i) Sales by a newly set up small scale industry of goods or 
class of goods, other than those included in Schedule X appended 
to this clause, manufactured by it during the period of three years, 
ff the. said industry is situated within the area of the Calcutta E 
Metropolitan Planning Area as described in the first Schedule to 
the West Bengal Town and Country (Planning and Development) 
Act, 1979 (West Bengal Act XIII of 1979) or five years, if it is 
situated elsewhere in West Bengal, since the date of its first sale 
of such manufactured goods : 
F 
Provided that the dealer claiming the benefit of this clause will 
be so eligible only if he keeps separate accounts in respect of such 
newly set up small scale industry, issues serially numbered 
cash/credit memos for sales of goods manufactured in such in- G 
dustry, keeps voucher and other documents for purposes of plant 
and machinery for establishment of such industry and maintains 
other records to prove that sales claimed exempt under this clause 
were of goods manufactured in such industry set up by him. 
Provided further that the dealer claiming the benefit of. this H . 
1028 
SUPREME COURT REPORTS 
(1996) 2 S.C.R. 
A 
clause will be eligible, if he possesses a valid certificate of eligibility 
in Form No. XXXVIA granted by the appropriate Assistant Com-
missioner in this behalf, for such period as mentioned in the said 
certificate : 
B 
c 
D 
E 
Provided also that.. ............ section 4AA of that Act. 
Explanation : For the purpose of this clause 'newly set up small 
scale industry' means a new industrial unit, -
(i) ............................................ . 
(ii) ........................................... . 
(iii) .......................................... . 
(iv) ........................................... . 
(v) ............................................ . 

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