TMI Blog2008 (11) TMI 621X X X X Extracts X X X X X X X X Extracts X X X X ..... differential tax payable on value of raw materials purchased at concessional rate by furnishing form IV. So far as second question is concerned in the present case, the learned Tribunal is not correct to hold that the subsidy amount will form part of the sale price and the dealer-petitioner is liable to pay sales tax on such subsidy amount. Question No. 1 is answered in affirmative in favour of the Revenue and question No. 2 in negative, i.e., in favour of the dealer. - - - - - Dated:- 24-11-2008 - CHAUHAN B.S. DR. C.J. AND MAHAPATRA B.N. , JJ. B.N. MAHAPATRA J. The Orissa Sales Tax Tribunal, Cuttack (hereinafter referred to as, the Tribunal ) has referred the following two questions of law under section 24(1) of the Orissa Sales Tax Act, 1947 (hereinafter referred to as, the OST Act ) at the behest of the petitioner-Indian Aluminum Company Ltd. (1) Whether, on the facts and in the circumstances of the case, stock transfer of manufactured products to other State prepared out of raw materials purchased on the strength of form IV could attract the mischief of the provisions contained in fifth proviso to section 5(1) of the Orissa Sales Tax Act? (2) Whether, on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidy of Rs. 6,05,803 during the year in question to run the canteen. The assessing officer has held that the subsidy amount of Rs. 6,05,803 given for running the canteen shall constitute part of the sale price on which the petitioner was liable to pay the tax. In appeal, the ACST found that under the Labour Welfare Regulations renewed in 1985, the dealer-appellant bound to sell a meal to a labourer at the rate of 36 paise. A cup of tea or a piece of Kachuri was supplied to the labourer only for 5 paise. Even free snacks and tea on certain occasions were given to the labourers. So, he deleted the levy of tax on the amount of subsidy of Rs. 6,05,803. The learned Tribunal in a majority view confirmed the assessment treating the subsidy amount as part of the sale price. However, the Chairman of the Tribunal in a dissenting view held that the petitioner is liable to pay tax only on the amount received from the employees/labourers and the subsidy price given did not form a part of the sale price. Thereafter, a petition under section 24(1) of the OST Act was moved before the Tribunal to refer the questions of law enumerated above for opinion of this court. The learned Tribunal relying on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 or in mining or in generation or distribution of electricity or any other form of power at concessional rate of tax or free of tax after furnishing a declaration in the prescribed form, but utilizes the same for any other purpose or outside the State of Orissa, he shall pay the difference in tax or the tax, as the case may be, payable had he not furnished the declaration. Entry serial No. 48 of List C: 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 or power subject to the production of true declaration by the purchasing registered dealer or his authorized agent in form IV. Form IV, which is appended to the list of taxable goods, is in the following language: I/we................hereby declare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that if the goods manufactured have not been sold but have been transferred, there is a violation of the terms of declaration and the dealer is liable for payment of differential tax payable on the raw materials purchased at concessional rate of tax by furnishing form IV. The use of the expression within the State of Orissa in fifth proviso makes the provision clear that the raw materials purchased must be used for manufacture of goods in the State of Orissa. The said provision indicates the purpose for which the goods are intended to be used, i.e., for manufacture/processing of goods for sale. The raw materials purchased for manufacture of bulk premix have not been used for any other purpose. But the manufactured product, i.e., bulk premix has not been sold but has been transferred to other branches of the dealer situated inside as well as outside the State of Orissa. The transfer clearly falls within the expression any other purpose mentioned in the fifth proviso to section 5(1) of the Act. A conjoint reading of fifth proviso to section 5(1), entry serial No. 48 of List C and form IV and decision of the honourable apex court in ICI India Ltd. [2007] 10 VST 1 makes ..... X X X X Extracts X X X X X X X X Extracts X X X X
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