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2022 (7) TMI 188 - HC - VAT and Sales TaxEligibility for concessional rate of tax - Entry 81 of List C of the Schedule of rates under Section 5(1) of the Orissa Sales Tax Act - sale of size wood by the petitioner against declaration Form IV to a registered dealer - Whether subsequent change in use of goods purchased against declaration Form IV by the registered purchasing dealer will disentitle the petitioner’s claim of concessional rate of tax under the aforesaid Entry 81 under the OST Act? - HELD THAT:- In the declaration the purchasing dealer disclosed that the intention behind purchasing the size wood from the Petitioner was for manufacturing/ processing of goods for sale in mining/generation or distribution of electricity or any form of power. There was no mention of the goods having been purchased for being used as packing materials. As pointed out, even assuming the purchasing dealer was going to use the goods so purchased for any other purpose i.e. a purpose other than that disclosed in the above declaration in Form IV, the Revenue’s interest would not be prejudiced since in any event the purchasing dealer would be liable to pay the differential rate of tax as per the 2nd proviso to Section 5 (1) of the OST Act. In TILAKRAJ MEDIRATTA VERSUS STATE OF ORISSA [1992 (2) TMI 338 - ORISSA HIGH COURT] this Court explained that once the buying/purchasing dealer furnishes the declaration in Form IV that he intends to use the size goods for manufacture/processing of goods for sale, the legal obligation of the selling dealer ceases. Any contravention by the purchasing dealer of the above declaration would result in the purchasing dealer being made liable and not the selling dealer. Applying the ratio of the above decision to the case on hand, it is seen that the declaration in Form IV does not disclose the intention of the purchasing dealer to use the size goods purchased as ‘packing materials’. Consequently, the selling dealer cannot be saddled with any liability of tax. If indeed, the Department finds that the purchasing dealer has used the purchased goods for the purpose other than that disclosed in the declaration form, it would be open to the Department to proceed against the purchasing dealer. It is, therefore, not justified on the part of the Department to pass on that liability to the selling dealer. The sale of size goods by the Petitioner against the declaration in Form IV to the registered dealer is eligible for concessional rate of tax @ 4% under Entry 81 of Schedule ‘C’ of rates under Section 5 (1) of the OST Act - a subsequent change in the use of goods purchased against declaration in Form IV by the purchasing dealer will not disentitle the selling dealer’s claim for concessional rate of tax. The questions are answered in favour of the Assessee and against the Department - revision petition allowed.
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