Research › Search › Judgment

Orissa High Court · body

2008 DIGILAW 1023 (ORI)

State of Orissa v. Sidhartha Engineering

2008-11-17

I.MAHANTY, L.MOHAPATRA

body2008
JUDGMENT I. MAHANTY, J. — This Sales Tax Revision arises out of a reference made by the Orissa Sales Tax Tribunal under Section 24(1) of the O.S.T. Act, 1947 referring to the following ques¬tions for the opinion of this Hon’ble Court: 1. Whether in the facts and in the circumstances of the case, the Sales Tax Tribunal is justified to hold that the Re¬spondent is engaged in the distribution of electricity so as to be entitled to purchase goods at concessional rate of tax on the strength of ‘C’ forms ? 2. Whether on the facts and in the circumstances of the case, the Respondent in executing the works contract with NTPC is engaged in the distribution of electricity ? 3. Whether on the facts and in the circumstances of the case, the Sales Tax Tribunal is justified to hold that the Respondent in executing the works contract is entitled to the use of Form IV for concessional purchase of goods even when it does not concern ? (a) manufacture of goods for sale; (b) packing, processing of goods for sale; (c) mining; (d) generation or distribution of electricity any other form of power. 4. Whether in the facts and in the circumstances of the case, a series of sale can be postulated to apply the provisions of Sec.8 of the CST Act even if the tax is paid while purchasing the goods ? 5. Whether on the facts and in the circumstances of the case the Sales Tax Tribunal is justified to allow deductions of Rs.15,45,940.11 towards value of goods purchased on the strength of ‘C’ forms although conditions under Section 8(3)(b) of the CST Act read with rules 12(1) and 13 of CST (Registration and Turn¬over) Rules are not satisfied ? 2. Question Nos.1, 2 and 5 are taken up together for consideration. The issue as to whether the respondent M/s. Sid¬hartha Engineering (P) Ltd. (Works Contract) was entitled to pur¬chase goods at concessional rate of tax on the strength of ‘C’ forms, is no longer res integra in view of the judgment rendered by the Full Bench of this Court in the case of Kalinga Builders (P) Ltd. and another v. Commissioner of Commercial Taxes, Orissa and others, 1999 (115) STC 81. This very issue was considered by Their Lordships of the Full Bench and the same has been answered in favour of the dealer and against the State. Therefore, this issue having been answered by the Hon’ble Full Bench in the aforesaid judgment in favour of the dealer needs no further answer. 3. In so far as Question No.3 is concerned, as to whether the respondent-dealer (works contract) was entitled to the use of Form IV for concessional purchase of goods also no longer sub¬sists in view of the judgment of this Court in the case of Kalin¬ga Builders (supra). Apart from this, it is to be noted that the respondent while using Form IV has deposited tax @ 4% and at the relevant point of time, a works contract dealer was liable to pay works contract tax at the same rate i.e. 4%. Therefore, since the respondent has admittedly deposited tax @ 4%, no difference in his tax liability would arise and, therefore, this question remains purely academic and, therefore, is also answered in favour of the dealer and against the revenue. 4. So far as Question No.4 is concerned, as to whether a series of sales can be postulated to apply to the provisions under Section 8 of the O.S.T. Act, even after the tax is paid while purchasing the goods, is also no longer res integra and has already been answered by this Court in the case of Bharat Heavy Electricals Ltd. and others v. Union of India and others, 1988 (71) STC 25, wherein it has been held that Section 5(2) (AA)(i) of the OST Act was also subject to Section 8 of the OST Act and if the good involved in a works contract, had already been sub¬jected to tax in a series of sales, this would have to be exclud¬ed from the taxable turn over. This issue has also been set at rest by the Hon’ble Supreme Court in the case of Larsen & Toubro Ltd. v. Union of India and others, 1993 (88) STC 204, whereby the Hon’ble Apex Court has laid down the dicta that the State Legis¬lature while imposing a tax on the transfer of property in goods (whether as goods or in some other form) involved in the execu¬tion of a works contract, is not competent to impose a tax on such a transfer (deemed sale) which constitutes a sale in course of inter-State trade or commerce or a sale outside the State or a sale in the course of import or export. In view of the aforesaid two authoritative pronouncements by both this Court as well as that of the Hon’ble Apex Court, this question also has already been answered in favour of the dealer and against the State and, therefore, it is no longer res integra. 5. In view of the aforesaid conclusions arrived by us and the questions referred have been answered in favour of the dealer and against the revenue, this revision needs no further consider¬ation and hence, it stands disposed of in terms as noted hereina¬bove. L. MOHAPATRA, J. I agree. Revision disposed of.