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2015 DIGILAW 608 (ORI)

BANSAPANI IRON LTD. v. STATE OF ODISHA

2015-11-02

D.P.CHOUDHURY, I.MAHANTY

body2015
ORDER I. Mahanty, J. - The present revision has come to be filed seeking to challenge an order dated 03.03.2015 passed by the Sales Tax Tribunal in S.A. No. 243(V) of 2013-14, by which order, the appeal filed by the present petitioner - M/s. Bansapani Iron Ltd. on the scope, applicability and retrospectivity or otherwise of the amendment to Section 2(8) of the OVAT Act, 2004 and in particular, the definition of the terms "Capital Goods" came to be rejected holding the same to be prospective in nature and cross-appeal filed by the Revenue was disposed of accordingly. 2. Learned counsel for the petitioner while assailing the order of the Tribunal, inter alia, raised various issues and in particular, raised question as to whether the Tribunal was legally justified to hold that the amendment of Section 2(8) of the OVAT Act, 2004 was available prospectively with effect from the appointed date i.e. 01.06.2008 and not retrospectively as claimed by the petitioner. 3. Admittedly, Section 2(8) of the OVAT Act, 2004, prior to its amendment stood as follows: "2. Definitions.- (8) CAPITAL GOODS" means plants, machinery and equipments used directly in the process of manufacturing and shall include the components and spare parts thereof, but shall not include such plant, machinery and equipments which are used for the purposes and in the circumstances specified in Schedule 'D';" After the amendment made by Gazette Notification dated 28th May, 2008 to the Orissa Value Added Tax (Amendment) Act, 2007 under (Orissa Act 3 of 2008), it has been stipulated at Sub-Section (2) of Section 1 of the Amendment Act that, the Act would come into force "on such date" as the Government may, by notification, shall appoint. The Government published in the Orissa Gazette dated 28th May, 2008 declaring to the effect that, it appointed on the 1st day of June, 2008 as the date of which, the Act shall come into force. 4. In view of the aforesaid facts situation, learned counsel for the petitioner submits that this amendment ought not to be treated as prospective in nature but ought to be accepted as clarificatory in nature and, therefore, ought to be given retrospective effect. 4. In view of the aforesaid facts situation, learned counsel for the petitioner submits that this amendment ought not to be treated as prospective in nature but ought to be accepted as clarificatory in nature and, therefore, ought to be given retrospective effect. In support of such contention, he placed reliance on the judgment of the Full Bench of this Court dated December 2, 1994 in the case of Sri Jagannath Industries and others v. State of Orissa and others, in which the insertion of a definition of the term "manufacture" in Section 2 (ddddd) of the Orissa Sales Tax Act, 1947 on the issue, as to whether the same is considered to have prospective or retrospective operation. 5. This Court in the said judgment came to conclude that on March 26, 1994, the Finance Department in exercise of the powers conferred by Section 6 of the Act amended the declaration form-1-B retrospectively w.e.f. April 1, 1986 and simultaneously also introduced the definition of the term "manufacture" in the statute which was earlier not defined and held that such definition clause of the term "manufacture" was essentially explanatory, clarificatory or declaratory and would be read to be retrospective effect. In Para-12 of the judgment, this Court came to conclude that in view of the fact that the declaration form 1-B although, amended on 26th March, 1994, was given retrospective effect from 1st April, 1986. Consequently, this Court came to hold that introduction of the definition of the word "manufacture" would also to be given to retrospective effect. 6. Learned counsel for the petitioner also placed reliance on the judgment of the Hon'ble Supreme Court in the case of M/s. Punjab Traders and others v. State of Punjab and others, AIR 1990 Supreme Court 2300. In the said judgment, the Hon'ble Supreme Court also came to a conclusion that the amendment Act, 1973 to the E.P. Molasses (Control) Act including "Khandsari" within the definition of sugar for the purpose of the said Act concluded that the said amendment was merely clarificatory, since it was well understood that "Khandsari" sugar was also "sugar", and that any reference to sugar in the absence of specific exclusion or qualification, was capable of equal application to sugar of all kinds including khandsari. 7. Mr. 7. Mr. Kar, learned Standing Counsel for the Revenue submits in affirmation of the orders passed by the Sales Tax Tribunal and submits that as to whether an amendment especially in the field of tax law is prospective or retrospective, is wholly an issue where the intent of legislature has to be determined. In the present case, while the Orissa Value Added Tax (Amendment) Act, 2007 though published in the Orissa Gazette on 28th May, 2008, did not come into immediate effect and it was left to the State to notify the date on which, the said amendment would came into operation. He further submits that in exercise of such power vested, the State on 1st June, 2008 was declared as "appointed date" and necessary Notification in the Orissa Gazette was published on 28th May, 2008. 8. On a plain reading of the amending Act as well as the further Notification fixing of the appointed date to bring the said amendment into effect, it would clear therefrom that there is no scope for entering into the issue raised by the petitioner as to whether it is retrospective or not, since legislative intent is clear, categoric and unambiguous. 9. Mr. Kar, learned Standing Counsel further submits that insofar as the judgment rendered by the Full Bench of this Court in the case of Sri Jagannath Industries and others (supra) is concerned, he places heavy reliance on Para-10 thereof and the finding that the declaration Form 1-B was amended on 26th March, 1994 by the Finance Department but given retrospective effect from April 1, 1986. Learned counsel asserts that the Hon'ble Court derived the legislative intent from the retrospective amendment to the declaration form and accordingly, the introduction of the definition to the term "manufacture" was correctly held to be retrospective and to operate from 1st April 1986 itself i.e. the date from which Form 1-B was amended retrospectively. 10. Perused the judgment of the Tribunal. The Tribunal also came to in its conclusion that the amendment of Section 2(8) of the OVAT Act dated 1.6.2008 was clearly prospective in nature and the assessment years for the period 2006-2007, the amendment would have no application for the period during which the impugned transaction took place. 11. 10. Perused the judgment of the Tribunal. The Tribunal also came to in its conclusion that the amendment of Section 2(8) of the OVAT Act dated 1.6.2008 was clearly prospective in nature and the assessment years for the period 2006-2007, the amendment would have no application for the period during which the impugned transaction took place. 11. Having heard the learned counsel for the respective parties and after perusing the order of the Tribunal as well as the judgment cited at the Bar, we are of the considered view that the fact situation that arises for consideration in the present case is distinct from the fact situation that arose for consideration by the Hon'ble Full Bench of this Court in the case of Sri Jagannath Industries and others (supra). In the said judgment the definition of the word "manufacture" was introduced in the year 1994 by way of amendment but prior thereto, no definition of the term "manufacture" existed in the statute. Further, in exercise of power under Section 6 of the Act, the Finance Department on 26th March, 1994 amended the declaration Form 1-B retrospectively from 1st April, 1996. Consequently, the introduction of the amended declaration form 1-B as well as the term "manufacture" and the definition thereof were given retrospective effect from the same date. In the present case, the facts of the present case is distinct, inasmuch as, the Orissa Value Added Tax (Amendment) Act, 2007 did not itself declare the date from which the statute came into operation and left it to the Government to issue the appointed date through Notification. The Notification was issued thereafter indicating 1st day of June, 2008 as the appointed date. We are of the considered view that, the same cannot be any clearer indication of legislative intent other than the Notification notifying the appointed date, from which the Act would come into operation. Apart from the above, we are also of the view that the judgment cited at the Bar by the petitioner in the case of M/s. Punjab Traders and others (supra), Hon'ble the Supreme Court clearly came to a conclusion that "the said amendment was clarificatory, since it was always well understood in trade that khandsari sugar was also sugar". In the present case, prior to 2008 amendment to the OVAT Act, spare parts were dealt separately other than capital goods. In the present case, prior to 2008 amendment to the OVAT Act, spare parts were dealt separately other than capital goods. It is only on and from the date, on which spare parts became covered under the term "capital goods" with the 2008 amendment came into force, that the situation stood otherwise and this amounted to a substantiate change insofar as taxability of a transaction is concerned. 12. We are not in agreement with the contention of the learned counsel for the petitioner that such nature of amendment is merely clarificatory in nature. It has changed the taxability or liability of tax of certain goods which is known as "spare parts" coming into the effect of the amendment. Consequently, we find no issue of law arises for the purpose of consideration in the present case any further and accordingly, the present revision stands dismissed. 13. Free copy of this order be handed over to the learned counsel for the Revenue. Urgent certified copy of this order be granted on proper application.