TMI Blog1955 (3) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.. The main contention put forward on behalf of the petitioner is that the goods were sold ultimately outside Orissa, and having regard to the provisions of clause (1) of Article 286 of the Constitution, the Orissa State cannot levy a tax on these sales. In reply, it is pointed out that, as a fact, what has been taxed is not the sale outside Orissa but the sale which took place inside Orissa when the applicant purchased the goods from another registered dealer. The decision of this question depends upon the true construction of the proviso to section 5(2) of the Orissa Sales Tax Act. 3. Section 5 sets out the rate at which a tax is to be levied on the turnover of a dealer. Sub-section (2) of that section explains rather than defines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount of price for which he sold the goods to the petitioner, in his taxable turnover. As we read the section, this contention is untenable. The words "his taxable turnover" appearing in the proviso, quoted above, refer to the registered dealer who purchases the goods and utilises them in a way contrary to any directions mentioned in his certificate of registration. Form III prescribed by Government sets out the conditions which a registered dealer has to satisfy before obtaining the certificate; and it gives him certain rights in regard to payment of tax also. Condition 3 of the certificate enables him to purchase goods of specified description free of tax if the purchase is made for re-sale in Orissa. In this case the certificate granted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was postponed, became collectable from the purchasing dealer. It is incorrect to say in such circumstances, as the learned counsel contends, that the levy amounts to a tax on purchases. Section 5 is only a machinery section providing for the recovery of the tax from some person or other. It enables the purchasing dealer to make the purchase, free of tax, from the selling dealer, on the strength of his declaration that the goods would be re-sold in Orissa so that he may pay the tax after such re-sale and realise the same from the consumers to whom they are re-sold. The very definition of the word "turnover" would appear to support this conclusion. "Turnover" has been defined in section 2(i) of the Act as meaning "the aggregates of the amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e finding of the Sales Tax Authorities is to the effect that the petitioner purchased goods to the extent of Rs. 832-4-6 during the relevant period from other dealers in Orissa, free of sales tax, on the strength of the aforesaid certificate but that instead of re-selling the goods in Orissa he sold them to merchants in Madras. The Sales Tax Authorities therefore thought that the proviso to the said sub-clause would apply and that the said sum should be added to the petitioner's turnover for the purpose of assessing sales tax. 3.. Mr. Mohapatra urged that the entire scheme of the Orissa Sales Tax Act was to levy the tax on the seller, but that the proviso to sub- clause (ii) of clause (a) of sub-section (2) of section 5 had the effect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion clause in section 5(2)(a)(ii). It is within the competence of the Legislature, while enacting that sales tax should ordinarily be levied from the seller, to insert a special provision by which the tax may, in special circumstances, be collected from the purchaser also. Mr. Mohapatra could not urge any constitutional bar to such a provision in the Act of the Legislature. Whether, by virtue of the rule-making power conferred by the Act, Government can by rules, in the absence of any special provision in the Act, provide for realization of the tax from a buyer is a different question on which it is not necessary for us to say anything at present. But so far as the competence of the Legislature is concerned, in view of the entry in Item 54 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s argument is doubtless attractive; but it is somewhat academic in view of the findings of fact of the Sales Tax Authorities. There is no finding to the effect that the first sale to the petitioner was for the purpose of re-sale by him in Madras. On the other hand, the clear finding is that at the time of the first sale the petitioner falsely represented to the Orissa dealers that he was purchasing the goods for re-sale in Orissa. It is true that subsequently the petitioner changed his mind and sold the goods in Madras. But from the mere fact that he subsequently chang- ed his mind it could not be reasonably inferred that the first sale to him was also "in the course of inter-State trade or commerce". Fur- ther materials are necessary for s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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