Decided on May 03,1973



R.N.MISRA, J. - (1.) BY order dated 9th November, 1970, made under section 24 (3) of the Orissa Sales Tax Act, 1947 (hereinafter called the Act), this court called upon the Sales Tax Tribunal to refer the following two questions for determination of this court : " (1) Whether in the facts and circumstances of the case, there has been any contravention of the proviso to section 5 (2) (A) (a) (ii) of the Orissa Sales Tax Act and whether the petitioner is liable to pay again tax on the value of the paper sold ? (2) Whether the tax demanded does not amount to double taxation hit by section 8 of the Orissa Sales Tax Act ?"
(2.) AS directed the Tribunal forwarded a statement of facts dated 8th February, 1971. When the case came up for hearing before us on 14th August, 1972, the statement of facts was found to be inadequate and appeared to be too bald and cryptic. Accordingly, we called for a supplementary statement which has in the meantime been received. In fact, as indicated by us in our order dated 14th August, 1972, the Tribunal has now returned a consolidated statement of facts. The assessee is a registered dealer under the Act. In the course of business it undertakes printing of materials on orders from customers. Sometimes customers furnish paper necessary for the printing and on occasions paper is supplied from the stock of the assessee. The assessee maintains an order-book as per pro forma enclosed to the statement of facts wherein the orders are serially noted and number and particulars of the transactions are noted in the respective columns of the book. From the entries in this register, it can easily be found out as to in which case paper has been supplied by the customer and where paper has been supplied by the dealer. In such cases where paper is supplied by the customer, the bill is in respect of printing charge only and where paper is supplied by the dealer, two bills are prepared - one for the sale of paper where tax under the Act is charged and the other for labour and other charges. These two bills are prepared on the same occasion with reference to the same order at the time when the printed materials are delivered to the customer and the money is realised. A sample copy of the bill has also been forwarded along with the statement of facts for reference by us.
(3.) FOR the year 1965-66, the assessee returned a gross turnover of Rs. 3,91,263. 75 and taxable turnover of Rs. 1,17,202. 24. In the taxable turnover was included the sale price of paper to the tune of Rs. 34,061. 12. The assessing officer excluded from the gross turnover returned by the assessee the printing charges which represented payment for labour only and by that process arrived at a gross turnover of Rs. 1,23,205. 59. The assessing officer proceeded to determine the taxable turnover thereafter. During the year, the dealer had purchased paper worth Rs. 36,016. 08 free of tax on the strength of its registration certificate by furnishing the requisite declaration that the paper purchased was meant to be resold within Orissa. The assessing officer found that out of this purchase of paper, the assessee had sold paper to the tune of Rs. 34,061. 12 to the customers. He obviously was of the view that there was indeed no sale of paper as such. The assessee after procuring orders for printing had utilised paper to the tune of Rs. 34,061. 12 in executing the orders for printing. After deducting 10 per cent estimated profit, he came to hold that for violation of the proviso to section 5 (2) (A) (a) (ii) of the Act, a sum of Rs. 30,655. 02 was to be added to the taxable turnover. Accordingly, he directed that amount to be so added. Consequently, the taxable turnover was enhanced to Rs. 1,47,857. 26, which was in excess of the gross turnover determined to the tune of about Rs. 25,000.;

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