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TMI Blog2008 (11) TMI 621X X X X Extracts X X X X X X X X Extracts X X X X ..... brief facts of the case are that during the year 1984-85 the dealer-petitioner effected purchase of raw materials of Rs. 15,35,146.48 by paying concessional rate of tax at the rate of four per cent on furnishing declaration in form IV. The raw materials so purchased were utilized for manufacturing of the finished product (ingots). Since the finished goods manufactured were sent outside the State of Orissa by way of branch transfer, the assessing officer held the dealer to have contravened the conditions of declaration. Invoking the mischief of fifth proviso to section 5(1) of the OST Act he levied the differential tax at the rate of four per cent on value of raw materials in addition to four per cent tax already paid at the time of purchase. In first appeal, the Assistant Commissioner of Sales Tax (hereinafter called "the ACST") found that out of such despatch of finished goods (ingots), Calcutta Branch had sold ingots worth Rs. 2,17,812. Since the finished goods were sold by the branch of the petitioner as such, he held that the mischief of fifth proviso to section 5(1) of the OST Act was not attracted to that extent. But as regards other despatches which were ultimately converted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he members and the Chairman, the learned Tribunal also referred the second question of law for the opinion of this court. The said reference was initially numbered as S.J.C. 115 of 1992 and subsequently converted to S.T. Rev. No. 127 of 2007. Mr. A.K. Parija, learned Senior Counsel appearing for the petitioner, vehemently argued that the mischief of fifth proviso to section 5(1) is not attracted since the raw materials purchased at concessional rate on the strength of form IV were used in manufacture of finished product inside the State of Orissa even though the finished product was sent to outside Orissa on branch transfer basis. In support of his contention, he relied on the judgment of this court in Orissa Cement Ltd. (OJC Nos. 3800 of 1987, 431 of 1988, 4333 of 1989 and 2090 of 1991 disposed of on December 2, 1991). On the contrary, Mr. Kar, learned counsel for the Revenue, strenuously argued that in view of the judgment of the honourable Supreme Court in ICI India Ltd. v. State of Orissa [2007] 10 VST 1 the mischief of fifth proviso to section 5(1) of the OST Act is attracted. The matter pertains to tax concession. When the claim of tax concession is taken into consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 1988, 4333 of 1989 and 2090 of 1991 disposed of on December 2, 1991), this court has interpreted, the fifth proviso to section 5(1) of the OST Act and held that a bare reading of the proviso makes it clear that in order to constitute a contravention, any goods of the class or classes specified in the certificate of registration, which were purchased on the concessional rate or free of tax after furnishing the requisite declaration, as being intended for use in the manufacturing or processing, within the State of Orissa is utilized, for any other purpose, or outside the State. If raw material is purchased on concessional rate or free of tax on furnishing a declaration, and the articles are not utilized for the purpose of manufacture or processing of goods and/ or are utilized outside the State of Orissa, the differential tax shall be recovered. If the finished goods, wherein the materials purchased were utilized, are transferred by way of stock transfer, the fifth proviso has no application. It is only where the goods indicated in the provision in question themselves are utilized in a manner other than that being utilized in manufacturing or processing or are not utilized within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erials purchased on the strength of form IV at concessional rate were used in manufacturing the finished product, the same were not sold either inside the State of Orissa or in course of inter-State trade from Orissa. The substantive condition for availing of concessional rate of tax thus stands violated and consequently the mischief of fifth proviso to section 5 is attracted. The dealer, in such fact-situation, is liable for payment of differential tax payable on value of raw materials purchased at concessional rate by furnishing form IV. So far as second question is concerned, the very issue has been decided by the honourable Supreme Court in TISCO General Office Recreation Club [2002] 126 STC 547; [2001] JT 10 SC 101. The facts of that case are that TISCO General Office Recreation Club was a dealer under the provisions of the Bihar Sales Tax Act. It ran a canteen and a library for the benefit of the officers and employees of Tata Iron and Steel Company Limited. It appears that the appellant had agreed to sell food items to the officers and employees of TISCO in the canteen. The prices of the food items so sold were being fixed by the managing committee from time to time in cons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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