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2008 (11) TMI 621 - ORISSA HIGH COURTWhether, on the facts and in the circumstances of the case, stock transfer of manufactured products to other State prepared out of raw materials purchased on the strength of form IV could attract the mischief of the provisions contained in fifth proviso to section 5(1) of the Orissa Sales Tax Act? Whether, on the facts and circumstances of the case, the Tribunal was justified in treating a sum of ₹ 6,05,803 being the amount of subsidy paid in running the canteen, as receipt of sale price or valuable consideration for the alleged sale of food stuffs to the workers? Held that:- In the present case, even though the raw materials purchased on the strength of form IV at concessional rate were used in manufacturing the finished product, the same were not sold either inside the State of Orissa or in course of inter-State trade from Orissa. The substantive condition for availing of concessional rate of tax thus stands violated and consequently the mischief of fifth proviso to section 5 is attracted. The dealer, in such fact-situation, is liable for payment of differential tax payable on value of raw materials purchased at concessional rate by furnishing form IV. So far as second question is concerned in the present case, the learned Tribunal is not correct to hold that the subsidy amount will form part of the sale price and the dealer-petitioner is liable to pay sales tax on such subsidy amount. Question No. 1 is answered in affirmative in favour of the Revenue and question No. 2 in negative, i.e., in favour of the dealer.
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