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2022 (5) TMI 1195 - HC - VAT and Sales TaxExemption from Sale Tax - sale of finished products manufactured by the industrial unit under the diversification scheme - order of enhancement of assessment passed by the Ld. Tribunal without compliance of the provisions of Rule-50 (3) of the Orissa Sales Tax Rules is lawful and valid or not - error of jurisdiction or is error in law while deciding issues which are not before him in the appeal filed by the Petitioner in absence of cross objection filed by the State - HELD THAT:- According to the Tribunal, the production and sale under the diversification scheme could not be construed to be increased commercial production over and above the installed capacity of the Unit and that the Petitioner had violated the stipulation laid down in the Finance Department Notification vide entry No.26-FF and 30-FFF (ii) of the Tax Free Schedule of the IPR, 1989. It was thus held that the Petitioner was not entitled to enjoy the benefit of exemption of tax on purchase of raw materials and sale of finished products under the diversification scheme - the Tribunal further held that the levy of sales tax on the raw materials and sale of finished products @4% and 12% respectively and surcharge @ 10% on the tax on finished products was leviable. Accordingly, the order of the ACST was set aside and the case was remanded to the ACST to make good the deficiency by issuing appropriate notice to the Appellant/Petitioner as to why the taxes as mentioned above would not be levied. The correctness of the remand of the case by the Tribunal for levy of enhanced tax on the Assessee, the Court is of the view that the Tribunal exceeded its jurisdiction. In SHYAMSUNDER SAHOO VERSUS STATE OF ORISSA [1993 (2) TMI 314 - ORISSA HIGH COURT], this Court explained that the power of the Tribunal under Section 23(3)(c) of the OST Act to enhance the assessment is relatable to appeal or cross objection filed by the Revenue. In the present case, there is no such cross appeal by the Revenue and therefore, there was no occasion for the Tribunal to have remanded the issue of tax on raw materials and finished products including surcharge on finished products to the ACST for a fresh determination. Disallowance of tax exemption on sale of finished products manufactured by the industrial unit under the diversification scheme - HELD THAT:- Once it was clear that the Petitioner had stopped manufacturing the products in terms of the original installed capacity and was manufacturing only under the diversification unit, there is no justification in withdrawing the exemption - The plain dictionary meaning of expression 'over and above' would mean 'in addition to' or 'as well as'. Here there is no finished product of the original installed capacity and only under the diversification unit and therefore it was erroneous on the part of the Department to reject the claim of the Petitioner for exemption. The Tribunal erred in law by disallowing the tax exemption on sale of finished products manufactured by the Petitioner's industrial unit under the diversification scheme. The impugned order of the Tribunal to that extent is set aside as are the corresponding orders of the STO and the ACST - The revision petition is disposed off.
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