BY TIOL News Service

CUTTACK, NOV 30, 2015: THE issue is - Whether there exists a difference in opinion between two judgments of the High Court, when both the cases deal with different subject matter and provisions of the Orissa Sales Tax Act and Whether the assessee can seek relief relying on such decision which is clearly distinguishable from the subject matter in question. NO is the answer.

Facts of the case

The assessee, M/s. Manisha Enterprises a proprietorship concern carried on business in salt, rice-bran, edible oil, oil-cake, etc. The assessment was originally completed, but on the allegation that some portion of the turnover of the assessee escaped assessment, the Sales Tax Officer started proceeding u/s 12 (8) of the Act. Despite notice, the assessee did not appear. Consequently, the Sales Tax Officer proceeded ex parte and raised an extra demand because the assessee effected purchase of rice-bran from the registered dealers free of tax on the strength of Declaration Form XXXIV with clear stipulation in the declaration for resale thereof inside the State of Orissa in a manner so that such resale would be subject to tax under the Act. The assessee, however, in alleged contravention of Section 5(2)(A)(a)(ii) of the Act sold the same to S.S.I. Units free of tax against the Declaration Form 1-D thereby attracting the tax liability as envisaged in the second proviso prescribed therein. On appeal, the Assistant Commissioner of Commercial Tax confirmed the Sales Tax Officer's order. The assessee thereafter filed Second Appeal before the Sales Tax Tribunal, and moved the revisional authority for stay. Stay was refused and the assessee filed petition before the High Court.

The contention of the assessee was that, rice-bran were sold to the tax exempted units, for which no sales tax was collected and, therefore, there was no justification for extra demand in assessment under Section 12 (8) of the Act. The revisional authority rejected the aforesaid contention relying on the judgment of this Court in State of Orissa vrs. M/s. Sahoo Traders, S.J. The counsel for the assessee submitted that the decision of this Court in the case of M/s. Sahoo Traders runs counter to another decision of this Court rendered in Tilakraj Mediratta vrs. State of Orissa. The Division Bench of this Court held that there appears to be conflict of opinion and referred the matter to the Larger Bench.

Having heard the parties, the Larger Bench of the High Court held that,

++ perusal of the decisions in the case of State of Orissa vrs. M/s. Sahoo Traders and the decision in the case of Tilakraj Mediratta vrs. State of Orissa (supra) show that both the decisions relate to two different provisions of the Orissa Sales Tax Act, 1947. While the former relates to provision contained in Section 5(2)(A)(a)(ii) of the Act, the latter relates to Section 5(2)(A)(a)(i) of the Act;

++ a cursory reading of the aforesaid provisions shows that, under Section 5(2)(A)(a)(i) of the Act the sale of any goods notified from time to time as tax free under Section 6 is deducted from the gross turnover of a selling dealer for the purpose of computation of a taxable turnover. In other words, a selling dealer, who produced evidence to show that it has sold goods covered by notification issued under Section 6 and the conditions and exceptions are complied with, is entitled to a deduction while its taxable turnover is computed. So far as Section 5(2)(A)(a)(ii) is concerned, it is found that when a selling dealer otherwise entitled to tax free purchase by giving declaration in Form XXXIV has to resell the goods in Orissa in a manner that such resell shall be subject to levy of tax under the Act. In other words, if the selling dealer in a series of sale purchases goods by giving declaration in Form XXXIV, he has to sell the same to another registered dealer in the State of Orissa in a manner that would be subject to levy of tax under the Act;

++ the case of Tilakraj Mediratta vrs. State of Orissa and State of Orissa vrs. M/s. Sahoo Traders have respectively dealt with different subjects, different texts and different provisions of the Act. The consequence that followed so far as the assessee is concerned in both the cases are different. Contextually also both the cases are different;

++ whether the case State of Orissa vrs. M/s. Sahoo Traders has been correctly decided, is a question beyond the reference. The reference has been made on the supposition that there is conflict of opinion in State of Orissa vrs. M/s. Sahoo Traders and Tilakraj Mediratta vrs. State of Orissa;

++ in paragraph-5 of the judgment in M/s. Anand Steels vrs. State of Orissa and others, after thorough discussion of the two decisions, both in State of Orissa vrs. M/s. Sahoo Traders and Tilakraj Mediratta vrs. State of Orissa and the relevant provisions of the Act, this Court held that the disputes involved in the two cases were contextually different and there was no conflict in the view expressed;

++ taking into consideration the provisions of the Act, as contained in Section 5 (2)(A)(a)(i) and Section 5(2)(A)(a)(ii) and decisions in the case of State of Orissa vrs. M/s. Sahoo Traders and Tilakraj Mediratta vrs. State of Orissa, we are of the considered view that there is no conflict of opinion in the decisions rendered by this Court in both the aforesaid cases, i.e. State of Orissa vrs. M/s. Sahoo Traders and Tilakraj Mediratta vrs. State of Orissa.

(See 2015-TIOL-2687-HC-ORISSA-CT-LB)