STATE OF ORISSA Vs. ATMARAM PRAHALAD ROY
HIGH COURT OF ORISSA
STATE OF ORISSA
ATMARAM PRAHALAD ROY
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R.N.MISRA, J. -
(1.) THE Member, Sales Tax Tribunal of Orissa, has referred the following questions under section 24 (1) of the Orissa Sales Tax Act (hereinafter referred to as the Act) for our determination :
" (1) Whether in the facts and circumstances of the case, the dealer is entitled to exemption of Central sales tax on the turnover of sales on the purchase of which tax has been levied inside the State ? Would it make any difference if the purchase tax had not been paid by the dealer but by his vendor who was the first purchaser ? (2) Whether in the facts and circumstances of the case, the Tribunal was right in allowing the exemption claimed and reducing the assessment to returned figure and thereby accepting the return of the dealer ?"
(2.) THE assessee is a registered dealer under the Central Sales Tax Act (hereinafter referred to as the Central Act) bearing No. GAC-I-5-45 and deals in mahua seeds as one of the items of trade. Mahua seeds are declared goods under the Central Act. During 1967-68 the assessee sold mahua seeds in the course of inter-State trade. On scrutiny of the assessee's accounts it transpired that he had claimed exemption on a turnover of sale to the tune of Rs. 23,686 of mahua seeds on the ground that purchase tax had been paid at the first point on these goods. Mahua seed is exigible to purchaser tax in Orissa under section 3-B of the Act. Mangulu Sahu had paid purchase tax on the mahua seeds in question. The assessing officer did not allow exemption as claimed. The assessee appealed. The first appellate authority confirmed the assessment. In second appeal by the assessee the Tribunal found :
" The sole point for consideration in this appeal is if the claim of exemption towards payment of tax on the sale turnover of mahua seeds worth Rs. 23,686 would be accepted since purchase tax had been paid on this mahua flower by the first purchaser, namely, Mangulu Sahu and Co. , a registered dealer under the Orissa Sales Tax Act. That mahua flower (should be seeds) is a declared goods on which purchase tax had been paid by Mangulu Sahu and Co. is not disputed nor the appellant's despatching the same beyond Orissa is disputed. The department's contention is if Mangulu Sahu and Co. itself would have exported mahua beyond Orissa in the course of inter-State trade then only the exemption would have applied, not in the case of the present assessee who had not paid the purchase tax himself. The department takes its stand on the notification of 8th December, 1966, bearing No. 43637 - C. T. A.-200/66-F. I do not think such a narrow construction as given by the department to the notification is permissible. The exemption contemplated in the notification is on the declared goods. It makes no difference between the dealer who had paid the purchase tax himself on the declared goods and another who had not paid the purchase tax and is thus a subsequent purchaser from the one who had initially paid the purchase tax. I do not agree that there is any emphasis put by this notification on the dealer which is obviously attached to the goods that are declared. "
In the reference application made by the State of Orissa it was contended before the Tribunal that section 15 of the Central Act imposed restrictions and conditions in regard to levy of tax on sales or purchases of the declared goods within the State. Sub-section (a) thereof provides that tax payable inside the State shall not exceed the prescribed rate and also such tax shall not be levied at more than one stage. Sub-section (b) provides for refund of sales tax levied on the intra-State sale or purchase when such goods are sold in the course of inter-State trade or commerce, but subject to conditions, if any, provided in the State law.
Section 8 (5) and 15 (b) of the Central Act are relevant for our purpose. Those provisions are as follows :
" 8. (5) Notwithstanding anything contained in this section, the State Government may, if it is satisfied that it is necessary so to do in the public interest, by notification in the official Gazette, direct that in respect of such goods or classes of goods as may be mentioned in the notification and subject to such conditions as it may think fit to impose, no tax under this Act shall be payable by any dealer having his place of business in the State in respect of the sale by him from any such place of business of any such goods in the course of inter-State trade or commerce or that the tax on such sales shall be calculated at such lower rates than those specified in sub-section (1) or sub-section (2) as may be mentioned in the notification. "
" 15. Every sales tax law of a State shall, in so far as it imposes or authorises the imposition of a tax on the sale or purchase of declared goods, be subject to the following restrictions as conditions, namely. . . . . . . . . . (b) where a tax has been levied under that law in respect of the sale or purchase inside the State of any declared goods and such goods are sold in the course of inter-State trade or commerce, the tax so levied shall be refunded to such person in such manner and subject to such conditions as may be provided in any law in force in that State. "
(3.) IN exercise of the power vested in the State of Orissa under sub-section (5) of section 8 of the Act, the following notification had been made on 8th December, 1966 :
" No. 43637 - C. T. A.-200/66-F.- In exercise of the powers conferred by sub-section (5) of section 8 of the Central Sales Tax Act, 1956 (74 of 1956), the State Government having been satisfied that it is necessary to do so in the public interest hereby direct that in respect of all declared goods sold in the course of inter-State trade or commerce, no tax under the said Act shall be payable by any dealer, having his place of business in the State in respect of the sale by him of such goods where tax has been levied and collected in respect of the sale or purchase of such declared goods under section 5 (1) of the Orissa Sales Tax Act, 1947, subject to the following conditions, namely :- (i) the burden of proving that the tax under section 5 (1) of the Orissa Sales Tax Act, 1947, has been levied and collected in respect of any such declared goods shall lie on the dealer, and (ii) the dealer shall not claim refund under clause (b) of section 15 of the Central Sales Tax Act, 1956, read with section 14-B of the Orissa Sales Tax Act, 1947, of the tax levied and collected under section 5 (1) of the Orissa Sales Tax Act, 1947, from the dealer or such tax has not been refunded to him. " ;
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