H.M.M LIMITED versus DIRECTOR OF ENTRY TAX, WEST BENGAL & OTHERS

Citation: [1983] 2 S.C.R. 754 · Decided: 15-04-1983 · Supreme Court of India · Bench: Y.V. CHANDRACHUD · Disposal: Dismissed
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Judgment (excerpt)

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II 
754 
H.M.M. LIMITlO 
v. 
DIRECTOR OF ENTRY TAX, WEST 
BENGAL & OTHERS. 
April 15, 1983 
[Y.V. CHANDRACHUD C.J., A. VARADARAJAN AND 
A.N. SEN JJ.] 
The Taxe~ on Entry of Goods into Calcutta Metropolitan Area Act, 1972-
s. 37 (2). 
The Taxes on Entry of Goods int(l Calcutta 
Metropolitan Area 
Rules, 1970 [rained under the Taxes on Entry of Goods into Calcutta Metropolitan 
Area Act, 1970-Kept alive by the Taxes on Entry of Goods into Calcutta 
Metropolitan Area Ordinance, 1972 wlu'cli repealed Act of 1970-Are applicable 
under the Act of 1972 which replaced the Ordinance(!/ 1'72. 
The Taxes on Entry of Goods into Calcutta Metrvpolitan Rules, 1970-
Rule 12 (I) and 12 (2)-Scope of 
Under s. 34 of the Taxes on Entry of Goods into Calcutta Metropolitan 
Area Act, 1970 which provided for levy & collection of a tax on the entry of 
specified goods into Calcutta M-etropolitan Area for consumption, use or sale 
therein from any place outside that Area, Taxes on Entry of Goods into 
Calcutta Metropolitan Area Rules, 1970 were framed. The Act of 1970 was 
repealed by the Taxes on Entry of Goods into Cnlcutta Metropolitan Area 
Ordinance, 1972 but the Rules 1970 were continued in operation bys. l(J) 
of 
the 
Ordinance. 
This 
Ordinance 
was 
repealed 
and 
replaced 
by the Taxes on Entry of Goods into Calcutta Metropolition Area 
Act, 1972. Section 37 (2) of this Act provides that anything done or any 
action taken under the Ordinance of 1972 shall be deen1ed to have been validly 
done or taken under this Act as if this Act had commenced on the 16th day of 
November, 1970 (the day when the Act of1970 came into force). 
Under r. 12(1) of the Rules of 1970, for the purpose of determining the 
value of the goods every dealer has to make a declaration regarding their value 
in a prescribed form and submit the same to the Assessing Officer alongwith a 
copy of the relevant documents in support thereof. Rule 12(2) provides that 
if the Assessing Officer is satisfied about the reasonableness of the value 
declared by the dealer he shall accept the same and levy tax acoordingly. It 
further provides that if the value is not ascertainable on account of non-
availability or non-production of the documents, or if the Assessing Officer is 
not satisfied about the reasonableness of the va1ue declared by the dealer, the 
Assessing Officer shall determine the approximate saleable value of the goods in 
the Calcutta Metropolitan Area to the best of his judgment and tax 
accordingly. 
The appellant in the Civil appeal and the petitioner in the writ petition 
is one and the same Company. The Company which used to import Horlicks 
Powder manufactured at its factory in Punjab into Calcutta Metropolitan Area 
• 
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i ').,. 
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11.M.M LT!>. JI. DIRlicTOR, ENTRY TAX 
?SS 
for purposes of bottling and marketing both inS:ide and outside that Area, 
imported 8736 kg•. of that Powder in 18 steel drums cif 182 kgs. each in 1974. . A 
Tho Entry Tax Officer at the Hussenabad Road Check Post assessed and charged 
entry tax on this po\\der under s.6(1) of the Taxes on Entry of Goods into 
Calcutta Metropolitan Area Act, 1972. The Assessing Officer did not accept 
the declaration and the documents regarding the value, freight and insurance 
•ubmitted by the Company under r. 12(1) of the Taxes on Entry of Goods into 
Calcutta Metropolitan Area Rules, 1970 and n1ade -assessment on the 'best 
judgment" basis under r.12 (2). The original documents regarding the value, B 
freight and insurance were not produced by the Company before the Assessing 
Officer in spite of repeated reminders. 
On appeal before the second respoi:tdent, Assistant Director, Entry Tax, 
Government of West Bengal, it was contended that (1) Rules of 1970 framed 
under the Act of 19i0 cannot be applied for the purpose of the Act of 1972, 
and (2) as the declaration regarding the value of the goods was submitted and 
the .documents were st.own to the Assessing Officer, he should have proceeded 
in accordance withs. 14(1) of the Act of 1972 and since· there was no omission 
or failure on the part of the Company, there was no scope for determining the 
value of tt,e powder on the ''best judgment" basis under r. 12(2) of the Rules of 
1970. The Assistant Director dismissing the appeal observed that s.l (3) of 
th c Ordinance of 1972 and s. 37(2) of the Act of 1972 prOvided for continuance 
of the operation of the Rules of 1970 and those provisions could be validly 
appli
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