1. This is an application under Section 8 of the West Bengal Taxation Tribunal Act, 1987 challenging, inter alia, the vires of column (2) of serial No. 81 of Schedule I to the West Bengal Sales Tax Act, 1994 as amended by the West Bengal Taxation Laws (Second Amendment) Act, 1995.
2. The learned lawyer for the petitioner submits that since the vires of the amended Schedule is under challenge the matter should be heard by the larger Bench. The case as made out in this regard is that the goods under seizure is textile fabrics specified in the Schedule I to the Act, 1994. Such goods in the column (2) of the Schedule are the textile fabrics of all varieties made fully or partly of cotton, rayon, artificial silk or wool including handkerchiefs, towels, bed sheets, bed spreads, table cloth, napkins, dusters, cotton velvets, velveteen tapes, niwars and laces whether embroidered or not but excluding pure silk cloth, rubberised cloth, belting, pipes (including hose pipes), staranchi, carpets and druggets when such textile fabrics are manufactured or made in India. With effect from May 1, 1995, the expression "carpets and druggets when such textile fabrics are manufactured or made in India" was substituted in the amended Act, 1995. According to the petitioner, the insertion of such expression in column (2), serial No. 81 of Schedule I is illegal and ultra vires being violative of the provisions of Section 24 of the Act, 1994.
3. The learned lawyer for the petitioner submits that the Section 24 does not authorise to impose conditions and exceptions in column (2) of Schedule I, since such conditions and exceptions can only be noted in column (3) of the said Schedule I. The amendment, therefore, was not made in accordance with the provisions of Section 24 of the Act, 1994 and is illegal and ultra vires.
4. The learned State Representative submits that the petitioner failed to make out any case so as to establish that the amended Schedule was made in violation to the articles of the Constitution of India. The amendment was made in accordance with the settled legal principles and without violating the provisions of the Act, 1994.
5. It is also submitted that the application is hopelessly barred by limitation, inasmuch, seizure was made long before sixty days from the date of filing of this application. The petitioner did not also exhaust all the revisional forums assailing the order of penalty passed by the first revisional authority. According to the learned State Representative, the application, therefore, is liable to be dismissed.
6. The points for consideration, therefore, are, (1) if the application is to be heard by the three Members Bench including the Chairman, (2) if the petitioner has exhausted all the forums before coming to this Tribunal on the issue of penalty and (3) if the application is barred by limitation so far the seizure of the goods is concerned.
7. It is a fact that the petitioner has failed to make out any case that the amended Schedule is violative of the principles of natural justice and rights given under the articles of the Constitution of India. It is the only case of the petitioner that the expression "when such textile fabrics are manufactured or made in India" noted in the column (2) should have been inserted in column (3) in view of the existing provision of Section 24 of the Act, 1994. It is the settled principles of law that imposition of or exemption from tax is under the full power and authority of the Legislature. Therefore, any amendment could not be declared to be ultra vires until and unless it has infringed the fundamental rights or contravened any other provision of the Constitution.
No tax shall be payable under this Act on sale of goods specified in column (2) of Schedule I, subject to the conditions and exceptions, if any, set out in the corresponding entry in column (3) thereof.
The provision thus clearly states the tax-free goods are to be specified in column (2) of Schedule I, but exceptions and conditions if any, relating to such tax-free goods have to be entered in column (3).
Since, as we find, no condition and exception has been laid down in column (3), the textile fabrics manufactured or made in India shall remain tax-free excluding some other kinds goods such as, pure silk cloth, rubberised cloth, belting, etc. The Legislature, did not find it necessary to impose any restriction and condition for the tax-free textile fabrics such as artificial silk, wool, napkins, table cloths, etc., as mentioned in serial No. 81 to make those taxable commodities.
Therefore, we did not find any reason to hold that such point at issue has to be decided by a larger Bench. The amendment is neither illegal nor ultra vires.
9. On going through the relevant annexures to the application we find that the petitioner did not exhaust all the forums assailing the order of imposition of penalty. Hence, the application cannot be entertained at this stage on this grounds until and unless all the forums are exhausted.
10. The seizure, as we find was made on November 6, 2003 and the application has been filed on March 4, 2004, i.e., long after sixty days. Hence, is barred under the provisions of Section 8 of the West Bengal Taxation Tribunal Act, 1987.
11. However, since the petitioner did not exhaust all the forums against the order of penalty he is given liberty to exhaust all the forums before coming to this Tribunal subject to law of limitation. The application, therefore, cannot be admitted for hearing on merits. The petitioner may, however, come before this Tribunal after exhausting all the appropriate forums.