Bengal Sales Tax Norms Restored

A Supreme Court verdict has allowed the West Bengal government to restore several crucial provisions in the state Sales Tax Act. These were suspended by the state taxation tribunal, with the result that the state government was incurring losses.

The provisions were suspended after the Road Transport Association of Siliguri challenged them before the tribunal.

The transporters had complained that trucks were being stopped at entry points due to wrong interpretation of the law.

They said they were required to pay tax if they failed to furnish details of the consignor or consignee, even if the goods did not enter the limits of the state and no sale or purchase of the goods by the transporter had taken place at that stage.

 

The tribunal found substance in this contention and suspended the relevant provision. It stated that the provision was vague, with no machinery or proforma specifying the manner of disclosure of the goods.

The Supreme Court, while allowing the state government's appeal, stated that there was no ambiguity in the provision.

Not providing any proforma for declaring particulars would neither make it vague nor unworkable. A prescribed form would have been appropriate, but its absence would not warrant the suspension of the law itself, said the judgment.

They clarified that no transporter could be made liable to pay tax at the entry point for his failure to disclose the information which was required under the relevant provision.

This is because the purchase of the goods must be within the state of West Bengal. There was no vagueness on this point. The law was, therefore, neither illegal nor unconstitutional, the Supreme Court stated.