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2023 (3) TMI 1269 - HC - VAT and Sales TaxReopening of assessment under Section 12(8) of the O.S.T. Act, 1947 - rate of tax - turnover relating to payments received towards supply of goods - taxable at 4% or 13%? - works contract or transaction of sale - HELD THAT:- The law regarding contract for supply, erection and thereafter installation of machinery was entertained as contract work and no independent sale had ever been made since the principles of law have already been decided in number of cases also and the petitioner is deriving the principles from the case of COMMISSIONER OF SALES TAX, MAHARASHTRA STATE, BOMBAY VERSUS BRIMCO PLASTIC MACHINERY PRIVATE LIMITED [1995 (2) TMI 379 - BOMBAY HIGH COURT] had categorically stated that the works contract executed along with supply installation etc. will be taxed as works contract exigible to Orissa Sales Tax @ 4%. In the case of STATE OF ORISSA VERSUS UGRATARA BHOJANALAYA [1992 (7) TMI 300 - ORISSA HIGH COURT], it has been held that if the assessing authority initiates proceeding under Section 12(8) of the O.S.T. Act in respect of assessment which has merged with the appellate order, it would be without jurisdiction. Since the assessment for the subject-year framed under Section 12(4) has already attained finality at the second appellate level, there was no scope to initiate proceeding under Section 12(8) of the O.S.T. Act. The reopening of the case basing on the A.G. audit report has further negated the issues, as held in the case of COMMISSIONER OF INCOME-TAX VERSUS LUCAS TVS. LTD. [2000 (12) TMI 102 - SC ORDER] by the apex Court that if the Assessing Officer accepts the audit report, it would be vulnerable and report of the audit party cannot make the basis to issue notice for reassessment under Section 148 of the of the I.T. Act, which is pari materia to Section 12(8) of the O.S.T. Act, 1947, since the common issues were involved on erection and installation of machinery, which constituted works contract but not for sale. Once the Full Bench of the Odisha Sales Tax Tribunal held that the petitioner being a contractor executed works which were indivisible contract and came to a conclusion that works executed by the dealer during the period were entertained as works contract and made exigible to tax @ 4%, a different view should not have been taken on the basis of the audit report submitted before the Assessing Officer and notice should not have been issued under Section 12(8) of the O.S.T. Act, 1947 for reassessment and the order of reassessment, which has been passed by him by holding that contract is divisible and, therefore, the petitioner is liable to pay higher tax @ 13%, which has been confirmed in First Appeal and Second Appeal, should not have been passed. The reason being, once the Full Bench as well as Coordinate Bench of the Tribunal has come to a definite conclusion that it should be treated as works contract and exgible to tax @ 4%, instead of 13%, thereby, the questions formulated in this revision petition are answered in favour of the petitioner and against the Revenue. The revision petition is allowed.
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