TMI Blog2012 (8) TMI 888X X X X Extracts X X X X X X X X Extracts X X X X ..... Sales Tax Act and can never be under both the Acts - whether a particular sale is an inter-State sale or an intra-State sale would depend upon the factual scenario and nature of evidence produced - Without examining the evidence it cannot be definitely said whether the transaction is an intra-State or inter-State transaction - The nature of transaction cannot be decided in the writ petition because the material produced along with the writ petition can be more effectually examined by the assessing authority - The stand that the petitioner is not liable to be registered under the Orissa Value Added Tax Act, 2004, does not improve the situation because the High Court cannot examine the material as an original forum - the petitioner has to establish that there is no breaking of chain of inter-State movement which has to be factually established. It was incumbent on the part of the petitioner-contractor to make an application as provided under subsection (5)(a) of section 54 to the assessing authority and satisfies him that no tax is deductible from the payments made to the petitioner as the materials supplied by it to IOCL is sale in course of inter-State trade and it is protected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been filed with a prayer to issue a writ in the nature of mandamus directing opposite parties 2 and 3 to refund ₹ 8,10,516 in favour of the petitioner within a stipulated period on the ground that opposite party No. 2-Commissioner of Sales Tax, Orissa and opposite party 3-Sales Tax Officer, Bhubaneswar-II Circle, Bhubaneswar, realized the aforesaid amount of tax illegally and arbitrarily from the petitioner as per the certificate in form VAT 605 in respect of sales in course of inter-State trade pursuant to contract with opposite party No. 4Indian Oil Corporation Ltd., 304-Bhoi Nagar, Bhubaneswar. The petitioner's case in a nutshell is that it is a company registered under the provisions of the Companies Act, 1956 and it is a manufacturer supplier-contractor of canopy, cladding, etc., having its factory at Sasewadi, Mumbai-Bangalore Highway, Tal. Bhor, District Pune in the State of Maharashtra. The petitioner-company was awarded with various work orders by the Indian Oil Corporation Ltd. (for short, IOCL ) for supply, fabrication and installation and retail visual identity (for short, RVI ) elements at various retail outlets against limited tender No. OSO-ENG/ 2006- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urse of inter-State sales as contemplated under section 3 of the Central Sales Tax Act. As per the Explanation of section 54 of the Orissa Value Added Tax Act, the tax deducted by opposite Party No. 4 is not realizable under section 54 of the Orissa Value Added Tax Act. Neither the Explanation to section 54 of the Orissa Value Added Tax Act, nor the provisions of sub-section (5) nor any other provisions of section 54 of the Orissa Value Added Tax Act shall be construed as to authorize deduction of any amount of tax on the value of the property in goods transferred in the course of inter-State sales, sales outside the State or sales in the course of import. The petitioner in the present case having not transferred any property in goods in the State of Orissa pursuant to the contract with IOCL and the entire goods which are required for the purpose of RVI elements in various retail outlets having been supplied by the petitioner to IOCL under the Central Sales Tax Act, the petitioner does not incur any liability under the provisions of the Orissa Value Added Tax Act. The petitioner thus being not liable to pay tax under the Orissa Value Added Tax Act does not incur any liability for o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t realized from the petitioner by opposite party No. 4 and deposited with the Sales Tax Department is liable to be refunded to the petitioner. Mr. Sahoo, further submitted that the procedure provided under section 54 of the Orissa Value Added Tax Act and the mechanism provided therein though prescribes grant of no deduction and partial deduction of tax at source upon application by a contractor, but the Explanation to section 54 speaks in unequivocal terms that the said procedure shall not be construed as to authorize deduction of amount towards tax on the value of the properties in goods transferred in course of inter-State sale under the Central Sales Tax Act. Since supply of all the goods made by the petitionercompany to IOCL pursuant to the contract executed with the IOCL are sales in course of inter-State trade, therefore, by virtue of section 54 of the Orissa Value Added Tax Act deduction of tax at source and so also deposit of such tax with the State Government are grossly unauthorized and the said amount is refundable to the petitioner. It is a trite rule of law much less the mandate of the Constitution which provides that no tax shall be levied without authority of law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t point in the State and thereby resulting in payment of sales tax through purchase price, the honourable Supreme Court directed the State to refund the sales tax it has actually collected. It was further submitted that the petitioner only provides service in the State of Orissa so far as execution of contract in question with IOCL is concerned. The same being a service exigible to service tax under the Central law, IOCL deducts service tax at the rate of 4.04 per cent from the petitioner from its bills while making payment. Concluding his argument, Mr. Sahoo prayed to allow the writ petition granting relief claimed in the writ petition. Per contra, Mr. R.P. Kar, learned standing counsel appearing for the Revenue, submitted that remedy is available to the petitioner under subsection (5) of section 54 of the Act. The petitioner's case is that no tax is either payable or deductible at source under section 54 of the Orissa Value Added Tax Act. In such event, the petitioner should have made an application to the assessing officer and if he satisfies that no tax is payable, it could have obtained a no deduction certificate from the assessing officer. On production of such certi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority to levy tax in respect of inter-State sales, Mr. Sahoo relied upon the decision of the honourable Supreme Court in the case of Gannon Dunkerley Co. [1993] 88 STC 204 (SC) and the provisions of the Orissa Value Added Tax Act, 2004 so far as sale as defined under section 2 of the Orissa Value Added Tax Act, 2004 is concerned. In view of entry 54, List VII of the Constitution of India, articles 269, 286(1) of the Constitution of India, we do not think it proper to burden the judgment by elaborately dealing with the judgment of the honourable Supreme Court and the constitutional and statutory provisions relied upon by Mr. Sahoo as there is no quarrel over the proposition that for the purpose of arriving at taxable turnover, turnover relating to interState transactions, export, import under the Central Sales Tax Act are to be excluded, that the State Act is always subject to the provisions of sections 3 and 5 of the Central Sales Tax Act; that sale or purchase in course of interState trade or commerce and levy and collection of tax thereon by the State is prohibited by article 269 of the Constitution of India; that article 286(1) of the Constitution of India prohibits the S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral Government undertaking, or any co-operative society, or any other association registered under the Societies Registration Act shall at the time of credit of such sum to the account of the contractor or any payment thereof in cash or by issue of a cheque or draft or any other mode, whichever is earlier, deduct subject to the certificate, if any, produced by the contractor in pursuance of sub-section (5), an amount towards tax equal to 4 per centum of such sum in respect of the works contract, if the value of works contract exceeds ₹ 50,000. Sub-section (5)(a) provides that where on an application being made by the contractor in this behalf, the assessing authority is satisfied that any works contract of the nature referred to in sub-section (1) involves both transfer of property in the goods and labour or services or involves only labour or service and accordingly justifies deduction of tax on the part of the same in respect of works contract or as the case may be justifies no deduction of tax he shall, after giving the contractor a reasonable opportunity of being heard, grant him such certificate as may be appropriate in the manner prescribed. Clause (b) of sub-sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder article 226 of the Constitution of India solely for issue of a writ of mandamus directing the State to refund money alleged to have been illegally collected by the State as tax was not ordinarily maintainable because a claim for such refund is ordinarily made in a suit against the authority which had illegally collected the money as tax. The honourable Supreme Court further held that the question whether the State was bound under section 72 of the Contract Act to refund the amount on the ground that it was paid under a mistake was a matter for decision in a regular suit and not in a proceeding under article 226. In view of the Constitution Bench decision of the honourable Supreme Court, the decision relied upon by the petitioner in the case of Ashoka Bidi Works [2001] 1 OLR 586 (Orissa) and Crown Re-roller (P) Ltd. [2007] 6 VST 331 (SC) for issuance of a writ of mandamus directing the State to grant refund to the petitioner is of no help to the petitioner. Moreover, the facts of those cases are distinguishable from that of the present case. Further contention of Mr. Sahoo, learned counsel for the petitioner, is that deduction of tax from the petitioner and deposit of suc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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