TMI Blog2007 (9) TMI 380X X X X Extracts X X X X X X X X Extracts X X X X ..... the declaration given in form IV to avail concessional rate as provided in the Orissa Sales Tax Act, 1947 (in short, "the Act") and the Orissa Sales Tax Rules, 1947 (in short, "the Rules"). In the first writ petition challenge was to the appellate order passed by the Assistant Commissioner of Sales Tax confirming the assessment made by the assessing officer for the assessment year 1997-98, whereas in the second writ petition challenge was to the assessment order passed by the Sales Tax Officer for the assessment year 1998-99. Background facts sans unnecessary details are as follows: The ICI India Ltd. (hereinafter referred to as "the assessee") is a company incorporated under the Companies Act, 1956 having its registered office at ICI House, 34, Chowranghee Road, Calcutta. It is engaged, inter alia, in the business of manufacture and sale of "bulk explosives". For the purpose of carrying on business at Rourkela in the State of Orissa, the appellant has set up an industry on Plot No. 77, Industrial Estate, Kalunga, and is registered as a dealer with the Sales Tax Officer, Rourkela II Circle, Panposh (respondent No. 3). The certificate of registration granted under section 9 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sales tax and excise duty are paid on such sale of "bulk explosive". In the assessment order for the year 1998-99, the assessing officer did not find any violation of the declaration given by the appellant while purchasing "ammonium nitrate", though the "bulk premix" has been transferred from Rourkela plant to Talcher and Belpahar, i.e., inside the State of Orissa, and did not make any addition for the same. But, for goods sent outside the State of Orissa, the assessing officer was of the view that the appellant had contravened the provisions of the fifth proviso to section 5(1) of the Act by furnishing wrong declaration as the goods manufactured were not sold. For the year 1997-98, however, all transfers of "bulk premix", whether inside or outside the State of Orissa, were disallowed and it was held that the appellant has contravened the declaration given in form IV while purchasing the raw material. This order was confirmed by the Assistant Commissioner of Sales Tax. Considering the rival stands taken before it, the High Court noted that the only question that arose for consideration was whether the appellant who purchased raw materials for manufacture/processing of "bulk ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of Orissa. Reliance is placed on paragraphs 11(1) and 18(2) of Polestar Electronic (Pvt.) Ltd. v. Additional Commissioner, Sales Tax [1978] 1 SCC 636 See [1978] 41 STC 409 (SC). to support the argument. Reference is also made to J.K. Cotton Spinning Weaving Mills Co. Ltd. v. Sales Tax Officer, Kanpur [1965] 16 STC 563 (SC) which related to meaning of expression "in the manufacture of goods" appearing in section 8(3)(b) of the Central Sales Tax Act, 1956 (in short, "the Central Act") which, according to appellant is in pari materia with the fifth proviso to section 5(1) of the Act. Reference is also made to decision of the Orissa High Court in Indian Aluminium Company Limited v. Sales Tax Officer, Ward A, Sambalpur I Circle [1993] 90 STC 410 for this purpose. It is, therefore, submitted that so long as the goods, that is, the intermediary products are manufactured within the State of Orissa but are used in the manufacture of final product either in the State of Orissa or outside, the raw materials have been used for manufacture of goods for sale, and there is no contravention of the fifth proviso to section 5(1) of the Act. Per contra, learned counsel for the respondent-St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so makes the position clear that the raw materials purchased must be used for manufacture of goods in the State of Orissa for sale. Entry serial No. 48 of List C, is quoted below: "Goods of the class or classes specified in the certificates of registration of the registered dealer purchasing the goods as being intended for use by him in the manufacture or processing or packing of goods for sale or in mining or in the generation or distribution of electricity or any other form of power subject to the production of true declaration by the purchasing registered dealer or his authorised agent in form IV." The fifth proviso to section 5(1) of the Act reads as under: "5. Rate of tax. (1) The tax payable by a dealer under this Act shall be levied on his taxable turnover at such rate, not exceeding twenty five per cent, and subject to such conditions as the State Government may, from time to time, by notification, specify: . . . Provided further that where a registered dealer purchases goods of the class or classes specified in his certificate of registration as being intended for use within the State of Orissa by him in the manufacture or processing of goods for sale ..... X X X X Extracts X X X X X X X X Extracts X X X X
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