Judgment:
1. The grievance of the applicant No. 1 (company) in this application under Section 8 of the West Bengal Taxation Tribunal Act, 1987 in the nature of one under Article 226 of the Constitution of India is that respondent No. 1 made an ex parte order of assessment on January 16, 1998 for the period from April 1, 1997 to December 31, 1997 under the West Bengal Sales Tax Act, 1994 (in short, "the 1994 Act"). On March 12, 1998 the company filed an appeal as well as an application for stay of the order of assessment before respondent No. 2, Assistant Commissioner of Commercial Taxes, South Circle. The company received an intimation dated March 14, 1998 from Deutsche Bank, Shakespeare Sarani Branch, Calcutta (proforma respondent No. 1) to the effect that the company's current account No. 4002465000 had been attached under the orders of respondents on March 12, 1998. Although no such formal intimation was received from Allahabad Bank, 7, Red Cross Place Branch, Calcutta (proforma respondent No. 2), the applicants came to know that the accounts held by them with that Bank had also been similarly attached on the same date. Such attachments of bank accounts have allegedly stalled business transactions of the applicants. The order of assessment is challenged, inter alia, as unjustified and bad in law for want of reasonable opportunity. The attachments of the bank accounts are also challenged as invalid and otiose, because it was done during pendency of the stay application. Though in the application (paragraph 22) the actions of the respondents are said to be violative of articles 14, 19(1)(g) and 265 of the Constitution of India, no submission was made at the time of hearing in respect of alleged violation of articles 19(1)(g) and 265.
2. Application was finally heard without exchange of affidavits, because both the parties wanted to argue the matter and none of them wanted time for filing affidavit-in-opposition or affidavit-in-reply.
3. The applicants have challenged the order of assessment dated January 16, 1998 and also attachment of the bank accounts effected on March 12, 1998.
4. The learned State Representatives appearing for respondents objected to entertaining the application on the ground that appeal is the appropriate remedy in respect of order of assessment, and the applicant-company has already availed of that remedy. While the appeal is pending the present application is not maintainable. Mr. M.L.
Bhattacharyya appearing for the applicants submitted that the order of assessment is challenged on the ground of denial of opportunity of being heard which emanates from Article 14 of the Constitution. The orders of attachment of bank accounts are also challenged in the application. Hence, according to Mr. Bhattacharyya, the application is maintainable.
5. The first question is whether the order of assessment dated January 16, 1998 is invalid, Mr. Bhattacharyya has urged three points. Firstly, he submitted that by not allowing adjournment of hearing of the assessment matter on January 16, 1998, and by passing the order on that very date, respondent No. 1 denied the opportunity of hearing to the applicant-company. Secondly, the assessment order should have been made under Section 45(1) of the 1994 Act, and not under Section 45(2).
Lastly, Mr. Bhattacharyya contended that respondent No. 1 should not have rejected gross turnover shown by the company in the returns. Mr.
J.K. Goswami and Mr. Mukhopadhyay, State Representatives, pointed out that respondent No. 1 has duly served the notice of hearing of the assessment and there is no dispute about it. Respondent No. 1 noted as under in the impugned order of assessment : "None appears, nor any petition for further adjournment seems to have been filed by the dealer. In absence of accounts produced by the dealer and in absence of any representative, I proceed to complete the assessment ex parte to the best of my knowledge and judgment." Therefore, the State Representatives contended that reasonable opportunity of hearing was duly given, but not availed of by the company. As regards the second point, they argued that Section 45(2) was the appropriate provision for assessment, because there was enquiry in respect of transactions and the enquiry report was brought to the notice of the company. The said enquiry report was available to respondent No. 1, the assessing authority, and it was "information" received by him. They pointed out the following observation of respondent No. 1 in the order of assessment : "But the dealer did not mention the sale of imported sugar and also did not pay the sales tax 4 per cent arising out of the sale of imported sugar in West Bengal. That the dealer evaded payment of sales tax is evident from the enquiry report by the I.C.T./P.S, countersigned by one of the directors of M/s. Prime Impex Ltd. (Enclosure : A), in which the dealer disclosed that they have made sales of imported sugar in September 1997 and October 1997. As a matter of fact, this office is in possession of information regarding sale of imported sugar by the dealer in the following manner ........." As regards the third point, the State Representatives contended that this Tribunal may not go into that question of fact which should be considered by the appellate authority.
6. In the grounds of appeal (in connection with the appeal filed before the appropriate authority) the following contention has been made by the company : "Your petitioners submit that his representative has appeared with an adjournment petition from his advocate, as the advocate himself has been prevented by sufficient reason to appear on the date of hearing, i.e., January 16, 1998. But the learned assessing authority had refused to receive the said petition on the ground that no authorisation/power was attached with the said petition. Secondly, on the next working day the said petition has been filed with the permission of Assistant Commissioner and proceeded to complete the assessment on the same date." From the above contention in the grounds of appeal it is at least clear that the advocate of the company did not appear before the assessing authority on January 16, 1998. The claim that someone else appeared before him with an application from the advocate is not corroborated by the observations made in the order of assessment. There is nothing to support this claim. Even if any unauthorised person had appeared and wanted time by a petition without authority, the dealer being an incorporated company, it would be very proper to refuse to accept any such prayer. No one can just appear before the assessing authority even for praying for adjournment on behalf of an incorporated company without due authority. But, from the facts, as revealed to us, it is not possible to hold that on January 16, 1998, any person even if unauthorised, had appeared before the assessing authority with an unauthorised petition for adjournment. Therefore, reasonable opportunity of hearing was given but not availed of by the company. The charge of denial of reasonable opportunity of hearing is, to our mind, without substance.
7. It is clear from the assessment order itself that the assessment in question was made following an enquiry and information received by the assessing authority from the report of that enquiry. The enquiry report was within the knowledge of the company. These facts have not been disputed before us. That being so, making of order of assessment under Sub-section (2) of Section 45 was competent. There is no illegality or irregularity in applying Section 45(2).
8. As regards the third contention of Mr. Bhattacharyya appearing for the company, we are of the opinion that whether the assessing authority was right or wrong in rejecting gross turnover shown in the returns is a question of fact. Appeal is the proper remedy in respect of such disputed question of fact. The company has already filed the appeal.
While exercising the jurisdiction under Article 226 of the Constitution of India in this application under Section 8 of the West Bengal Taxation Tribunal Act, 1987 (see the case of L. Chandra Kumar [19971 105 STC 618 (SC) ; AIR 1997 SC 1125), this Tribunal will not ordinarily go into such a question of fact which has not yet been considered by statutory, appellate and revisional authorities under the 1994 Act.
Thus, all the contentions of Mr. Bhattacharyya are not accepted.
9. As regards attachment of bank accounts, the dates are undisputed and relevant. The assessment was made on January 16, 1998. The notice of demand was issued on February 2, 1998 by fixing March 10, 1998 for payment of the assessed dues, and March 11, 1998 for production of receipt in proof of payment. According to Section 47, a notice of demand of assessed dues should be served on a dealer by specifying a date for payment, and such date should be so specified that ordinarily it will be not less than thirty days from the date of service of such notice. In this case, it has been claimed in course of arguments by learned State Representatives that the notice of demand was served on the company fully in compliance of Section 47. That fact is undisputed.
Mr. M.L. Bhattacharyya, applicants' counsel, did not submit at all that the time allowed for payment by the company was less than thirty days.
So, after the expiry of March 10, 1998, the assessed dues as per the notice of demand became recoverable. Mr. Bhattacharyya contended that respondent No. 1 acted in haste by resorting to garnishee proceeding by way of attachment (Section 57) in such haste. On this point, the relevant facts are, as argued by the learned State Representatives for the respondents by production of the record, that on the early part of March 11, 1998 an Inspector of Commercial Taxes was sent to the office of applicant No. 1 (company) to enquire whether the amount had been deposited in favour of the Revenue as per the notice of demand. The Inspector was told by the company that the money had not been deposited. The Inspector drew up a report which was countersigned by the company (it was shown to us). Mr. Goswami and Mr. Mukhopadhyay, learned State Representatives, further submitted upon instruction that on March 11, 1998 itself the company withdrew a sum of Rs. 52 lakhs from its account in Allahabad Bank (proforma respondent No. 2). In those special circumstances, they contended that respondent No. 1 was justified in resorting to the special mode of recovery through garnishee proceeding under Section 57. The facts stated by the learned State Representatives have not been disputed on behalf of the applicants before us. That being so, we hold that respondent No. 1 appropriately applied Section 57 and issued attachment orders of the bank accounts of the company. Mr. Bhattacharyya himself informed us that as on the date of hearing by us the money left in the account of the company in Allahabad Bank was Rs. 80,000 (rupees eighty thousand) only.
10. It was argued on behalf of the applicants that as the appeal and the application for stay were filed on March 12, 1998 and filing thereof was intimated to respondent No. 1, the adoption of garnishee proceeding by attachment was improper and illegal. The learned State Representatives have pointed out that apart from the question of law, as a matter of fact the orders of attachment were issued on March 11, 1998 and served during banking hours on March 12, 1998. That being the undisputed position (undisputed because it is clear from Annexure "E", the letter of Deutsche Bank), we hold that attachment orders were issued to the banks prior to filing of appeal and stay application and naturally prior to intimation given to respondent No. 1 about filing thereof. The allegation that the orders of attachment were issued or served after intimation given to respondent No. 1 about filing of appeal and stay application is without substance. Mr. Bhattacharyya argued that if an appeal and stay application are pending, in course of pendency thereof no coercive measure should be taken for recovery of the assessed amount. In this respect, he relied on Dwarka Minerals and Chemicals (P) Ltd. v. C.C.E. (Appeals), Chandigarh (1997) 93 ELT 330 (P&H). In that case where the question was of recovery of Central excise dues, an appeal and application for stay had already been filed by the assessee. Thereafter the authorities threatened to take coercive measures for recovery of the demand. The assessee filed a writ petition before the Punjab and Haryana High Court. It was held that the application for stay ought to have been disposed of expeditiously and the Revenue authorities were directed not to take coercive steps for recovery of the demand. Therefore, in that case, the facts were different and the High Court in its writ jurisdiction under Article 226 of the Constitution gave the direction as mentioned. Mr. Bhattacharyya also relied on K.T. Building Materials Pvt. Ltd. v. Commissioner (A), Central Excise and Customs (1997) 94 ELT 59 (Raj). There also a stay application was kept pending for a considerable period and recoveries were either made by coercive process or sought to be made. The High Court of Rajasthan directed as under : "........we direct that the application for exemption from pre-deposit and stay pending before the Commissioner of Appeals shall be disposed of within a period of two months from the date of presentation of certified copy of this order by the petitioner before the concerned appellate authority and recovery of the amount involved in the appeal shall not be effected till the disposal of the application for exemption from pre-deposit and stay. If, in the meanwhile, recovery of amount has already been effected, the appeal itself shall be disposed of within two months from the date of filing of certified copy of this order before the appellate authority." Thus, in that case also, in exercise of writ jurisdiction the High Court allowed a remedy to the assessee as it thought proper, but the facts were different from those in the instant case. There, the application for stay was kept pending. Mr. Bhattacharyya also relied on Sitaram Sreegopal v. C.T.O., China Bazar Charge (1977) 10 STA 27 (Cal).
In that case also during the pendency of the stay application, recovery proceedings under the Bengal Public Demands Recovery Act were resorted to. In exercise of the writ jurisdiction under Article 226 of the Constitution, the learned Judge directed that the application for stay should be forthwith disposed of and until such disposal no steps should be taken for realisation of the demand. Thus, all the three cases relied on by Mr. Bhattacharyya are clearly distinguished. We are exercising the writ jurisdiction under Article 226 of the Constitution, but the orders of attachment were issued prior to filing of appeal and application for stay and prior to intimation given to respondent No. 1 about filing thereof. The distinguishing feature is that the coercive measure was taken while no application for stay was kept pending.
Therefore, in our opinion, there was no illegality in issuing orders of attachment of the bank accounts.
11. From the three cases relied on by Mr. Bhattacharyya, namely (1997) 93 ELT 330 (P&H) [Dwarka Minerals and Chemicals (P) Ltd. v. C.C.E.(Appeals), Chandigarh], (1997) 94 ELT 59 (Raj) [K.T. Building Materials Pvt. Ltd. v. Commissioner (A), Central Excise and Customs] and (1977) 10 STA 27 (Sitaram Sreegopal v. C.T.O., China Bazar Charge), it will appear that the different High Courts while dealing with this question did not lay down any principle of law that recovery of tax by coercive measure is legally barred during pendency of either statutory appeal or revision or application for stay. What the High Courts did was to grant discretionary relief to the assessees by staying such recovery of assessed dues during pendency of stay applications. This was done obviously in the exercise of the extra-ordinary discretionary power under Article 226 of the Constitution of India. Though not referred to before us, we may also refer to Shriram Refrigeration Industries Ltd. [1994] 95 STC 488 (SC). There, the case of the petitioners before the Supreme Court was that they had paid local sales tax in various States under the respective sales tax laws, but yet they were being called upon to pay Central sales tax on the very same transactions and that was causing great hardship. In those circumstances, the taxing authorities were directed not to take steps for recovery of the amount of Central sales tax on the transactions in respect of which sales tax had already been paid in other States on intra-State sales. The stay was directed to continue till the pending appeal was disposed of. In that case also, it was not laid down that recovery of tax was legally barred. But in the special circumstances, a relief was granted to the assessee on the facts of the case. There is no dispute that the West Bengal Sales Tax Act, 1994 and the Rules framed thereunder do not lay down any provision that as soon as a statutory appeal or statutory revision is filed or as soon as an application for stay is filed in such appeal or revision, recovery of assessed dues should be deemed to have been stayed or no coercive measures can be resorted to for recovery. In the instant case, as already stated, the facts do not support the applicants. The attachment orders of bank accounts were made when the appeal and the stay application had not been filed.
Hence, the discretionary relief which was given in the aforesaid cases by the courts, is not called for in the instant case.
12. Mr. Bhattacharyya contended that the statutory period for filing an appeal was forty-five days from the date of judgment or communication thereof, but the garnishee proceeding was resorted to earlier to expiry of that period. We find no illegality in this. Although the period for filing appeal has been prescribed as forty-five days, the Act has also prescribed that assessed dues can be demanded by giving thirty days' time. The Act has not imposed any bar on initiation of coercive measure for recovery before expiry of the said forty-five days. On the other hand, the fact that the statute has permitted making of demand before expiry of forty-five days is indicative of the intent that, for non-payment of the demand, recovery measures can be resorted to.
13. Mr. Bhattacharyya submitted that the applicants may be allowed to operate the account in Allahabad Bank at least in respect of letter of credit so that they may deposit cheques and transfer amounts to the banks of foreign exporters from whom the applicants were importing goods. We have been informed by both sides that a sum of Rs. 58 lakhs has been paid by proforma respondent No. 1, Deutsche Bank, to the sales tax authorities following the order of attachment. Hence, out of the total demand of Rs. 1,46,99,502.79, more than Rs. 88 lakhs is still due.
14. We direct respondent No. 1 to release the bank accounts of the applicant-company held with proforma respondents 1 and 2, (Banks) within 24 hours of deposit of the balance amount of demand in cash in favour of respondent No. 4, Commissioner of Commercial Taxes. If deposited, that amount shall be treated as security and shall abide the ultimate result of the application for stay and the appeal already filed by the applicants. The appellate authority is directed to dispose of the stay application within ten days.
15. The main application is, thus, finally disposed of without any order for costs.