SUN OIL COMPANY (P) LTD. AND ANR. versus STATE OF WEST BENGAL AND ORS.

Citation: [1998] SUPP. 2 S.C.R. 18 · Decided: 22-09-1998 · Supreme Court of India · Bench: S.P. BHARUCHA · Disposal: Dismissed
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Judgment (excerpt)

A 
B 
SUN OIL COMPANY (P) LTD. AND ANR. 
v. 
STATE OF WEST BENGAL AND ORS. 
SEPTEMBER 22, 1998 
[S.P. BHARUCHA, D.P. WADHWA AND 
SYED SHAH MOHAMMED QUADRI, JJ.] 
West Bengal Sales Tax Act, 1954: 
C 
Sections 4, 4-AA and 4-AAA-Assessee a registered dealer under the 
Act-Assessee also registered as small scale industry exempted from payment 
of sales tax for a particular period-Revenue issued such certificate exempting 
the asse~see from payment of sales tax-However, it sought to levy turnover 
tax on assessee-Held, 'tax' referred to tax imposed under Section 4 and not 
D to turnover tax imposed under Section 4-AAA-Hence, a small scale industrial 
unit exempted from payment of tax under Section 4, does not stand exempted 
from payment of turnover tax under Section 4-AAA. 
E 
Words and Phrases-Word "tax"-Meaning of-Jn the context of West 
Bengal Sales Tax Act, 1954. 
Assessee was a registered dealer under the West Bengal Sales Tax 
Act. The authorities under the Act had granted exemption to the assessee 
from payment ofsales tax for a period 14.1.1980 to 14.1.1985 by issuing a 
certificate to that effect as the assessee was a registered small scale industry 
F enjoying the benefit of tax holidays. In spite of such exemption, for a part of 
AY 1983-84, assessee was subjected to turnover tax. As~essee filed an appeal 
against the order of assessment before the Assistant Commissioner of 
Commercial Taxes who confirmed the order of Commercial Tax Officer on 
the ground that exemption certificate did not absolve it from t~e liability to 
G 
pay turnover tax under Section 4-AAA of the Act. The order of Assistant 
Commissioner was challe11ged before the Taxation Tribunal and a Full Bene~ 
of the Tribunal dismissed the appeal of the assessee. Hence this appeal. 
It was contended by assessee that exemption granted under Section 4-
AA applied not only to tax under Section 4 but applied also to the turnover 
H tax under Section 4-AAA . 
18 
SUN OIL COMPANY (P) LTD. v. STATE [QUADRI, J.] 
19 
Dismissing the appeal, this Court 
A 
_. j 
HELD: 1.1. Section 4 and 4-AAA of the West Bengal Sales Tax Act 
) 
shows that the legislature itself has referred to two forms of impost under 
the Act differently. In Section 4, it is referred to as "a tax", whereas in 
Section 4-AAA, it is referred to as "a turnover tax". The difference in 
nomenclature is consistently maintained in the said sections as well as other B 
sections of the Act. [22-D-E] 
1.2. Section 4-AA opens with a non-obstante clause but the empowerment 
under this Section to notify that no tax shall be payable relates to "tax" levied 
under Section 4. The expression used in Notification No. 1809/F-T dated C 
1.6.1976 issued under Section 4-AA, is, that the Governor is pleased to 
direct that "no tax" shall be payable by a dealer under the said Act which 
obviously refers to the tax under Section 4 but not to "turnover tax" imposed 
under Section 4-AAA. Therefore, a small-scale industrial unit is not entitled 
to exemption from payment of turnover tax during the period of the validity 
of the eligibility certificate by virtue of notification issued under Section 4- D 
AA of the Act. [22-F-H; 23-D-F] 
Kejriwal Electronics Private Ltd. v. Commercial Tax Officer and Ors., 
81 STC 20, approved. 
ABN Food and Beverage Private ltd. v. Assistant Commissioner of E 
Commercial Taxes, South Circle, Calcutta and Ors., 77 STC 339, overruled. 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2056 of 
1996. 
From the Judgment and Order dated 25.6.93 of the West Bengal Taxation F 
Tribunal in Case No. R.N. I92of1991. 
• 
Bhaskar Gupta, Ms. Radha Rangaswamy and Ms. Renuka Sharma, (Ms. 
Mridula Ray Bhardwaj) (NP) for the Appellants. 
B. Sen. D.K. Sinha, J.R. Das and l'ills. Man ju Mishra for the Respondents. G 
The Judgment of the Court was delivered by 
QUADRI, J. The short question that arises in this appeal is : whether 
the word "tax" in Section 4-AA includes "turn over tax" levied under Section 
4-AAA of The West Bengal Sales Tax Act, 1954? 
H 
20 
SUPREME COURT REPORTS [1998] SUPP. 2 S.C.R. 
A 
The facts giving rise to this question, lie in a short compass and are 
not in dispute. The appellant-company is carrying on "business of the 
manufacture of lubricating oil and grease. It was granted certificate of 
~ ._ 
registration under the West Bengal Sales Tax Act, 1954 (for short, the Act). 
A certificate for permanent registration as small scale industry was granted 
by the Directorate of Cott
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