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2022 (4) TMI 6 - HC - VAT and Sales TaxRejection of declarations in Form-IV, which were furnished by the purchasing dealers to the Petitioner, for purchase of logs, as manufacturers - contravention of either the 5th proviso to section 5(1) of the Act or entry 48 of the list ‘C’ of the Rate Chart - HELD THAT:- It must be noted that the declaration contained in Form IV, which is set out under Entry 81 (which at the relevant time was Entry 48) of List ‘C’ of the Rate Chart appended to the OST Act is to the effect that the goods purchased “shall be used in the manufacturing/processing of goods for sale/in mining/generation or distribution of electricity or any form of power”. It is reasonable to expect that the Petitioner as a selling dealer would go by the above declaration instead of undertaking an investigation into whether such declaration has rightly made. The Department has no answer to the plea of the Petitioner that if it had declined to accept the Form IV furnished to it by the saw mill manufacturers, it may have been in violation of Section 9-B (3) of the OST Act. The Court enquired from Mr. Padhy whether any instructions were issued by the Department to the selling dealers in general asking them not to accept Form IV if it was either furnished by a saw mill manufacturer or anyone else whom the Department has ascertained not to be engaging in any activity of manufacturing or processing or even where the sale of goods is a first point sale? The answer was in the negative. The Tribunal was in error in rejecting the declaration in Form IV furnished by the purchasing dealers to the Petitioner for the purchase of logs. Contravention of either the 5th proviso to section 5(1) of the Act or entry 48 of the list ‘C’ of the Rate Chart - HELD THAT:- In terms of 5th proviso to Section 5(1) of the OST Act, and in terms of the declaration made, the purchasing registered dealer is located within the State of Odisha and he has undertaken to use such goods in the manufacture or processing thereof for sale within the State of Odisha. The proviso makes it clear that if such purchasing dealer utilizes the goods for any other purposes outside the State of Odisha, such purchasing dealer shall pay the difference in tax. In other words, if there is a contravention of the 5th proviso to Section 5 (1) of the OST Act by the purchasing dealer, the Department ought to go after the purchasing dealer for such violation and not the selling dealer - the Petitioner in the present case has not contravened either the 5th proviso to Section 5 (1) of the OST Act nor Entry 48 (now Entry 81) of List ‘C’ of the Rate Chart appended to the OST Act. The revision petition is disposed of.
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