TMI Blog2020 (5) TMI 390X X X X Extracts X X X X X X X X Extracts X X X X ..... ll be presumed, until the contrary is proved by him, that such goods had entered into that local area for consumption, use or sale there - There is no dispute with regard to the fact that the goods brought by the Applicant herein are scheduled goods (i.e. either Schedule II or III) and the dispute is only with regard to the place to which the goods are brought, contending that the place being a land belonging to the Railways, it is not a 'local area'. Section 131 of the Orissa Municipal Act, 1950 refers to the power of the Municipality to impose taxes including Octroi Duty on the goods brought within the limits of the Municipal area. The significant thing to be noted, as held by the Apex Court, was that Octroi Duty could fall within the ambit of Section 184 (1) as a tax in aid of the fund or any local authority; which will not apply to the tax of Entry Tax leviable under Section 3(1) of the said Act of 1999 (which tax is imposed and collect by the State Government). It was also observed that the words any tax in Section 184 of the Railways Act, 1989 was required to be read in the context of Article 285 of the Constitution of India and to be understood as any tax on pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Sales Tax, Madhya Pradesh (the State of Chhattisgarh being part of the said State at that point of time) to the effect that no tax under the Entry Tax Act was to be levied in respect of the goods brought into the land belonging to the Railways and the position continued almost till the end of the financial year on 31.03.1994. But things took a different turn, pursuant to the verdict passed by the Apex Court in the case of Senior Divisional Mechanical Engineers vs. State of Orissa Others in Civil Appeal No. 4934 of 2008 (copy of which has been produced as Annexure RA/9), whereby the challenge raised by the authorities of the Railways against the verdict passed by the Orissa High Court with regard to the imposition of Entry Tax on the Diesel / High Speed Diesel Oil brought by the Railways for its consumption was repelled. The plea of the Railways with reference to the mandate of Article 285 of the Constitution of India and Section 184 of The Railways Act, 1989 was turned down and the verdict passed by the Orissa High Court was upheld, sustaining the taxable event. According to the Applicant, the said verdict stands on a different footing, despite which a circular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een decided and declared, nothing remained to be referred further, and it was accordingly that the reference application was dismissed as per Annexure RA/10 order dated 27.03.2018. This made the Applicant to approach this Court by filing the above case seeking for reference under Section 55(2)(b) of the C.G. Value Added Tax Act, 2005, suggesting the following questions as the questions of law to be referred: 3.1 Whether under the fact and circumstances of the case entry of goods in to Railway area is liable to Entry Tax? 3.2 Whether the Hon'ble S.C. in case of Senior Divisional Mechanical Engineer vs. State of Orissa in C.A. No. 4934/2008 order dated 07.08.2008 has decided the issue as to whether Railway area is a 'Local Area' or not? 3.3 Whether the decision of the Hon'ble S.C. has got a binding precedent though the decision is given on entirely different issue? 3.4 Whether the Hon'ble Tribunal has erred in law in not talking cognizance non applicability of the S.C. decision relied upon by the deptt. 8. Heard Shri Mool Chand Jain, the learned counsel appearing for the Applicant as well as Shri Siddharth Dubey, the learned counsel representing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions suggested in paragraph 3 of the memorandum of appeal. It is stated that while drafting the application dated 02.06.2018 filed before the Tribunal seeking for reference, the Applicant inadvertently omitted one question of law to be drafted and included and the same hence is sought to be incorporated by way of amendment in the following terms: 3.5 Whether the reopening of the concluded assessment, on the basis of circular issued by the Commissioner relying upon a decision of the Hon'ble Supreme Court given on different ground and different facts, is valid in law. 11. Serious objection is raised on the part of the State / Department by filing a reply to the effect that admittedly, it was never a question raised before the Tribunal to be referred and as such, the order under challenge is not arising from such question to come within the purview of Section and form a subject matter of challenge in the present proceedings. Reliance is sought to be placed on the verdict passed by the Apex Court in the case of Commissioner of Income Tax, Bombay vs. Scindia Steam Navigation Co. Ltd. reported in AIR 1961 SC 1633 (copy produced as Annexure R/1) to the effect that a qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e dealer or such person, it shall be presumed, until the contrary is proved by him, that such goods had entered into that local area for consumption, use or sale there. The burden of proof is mentioned under Section 11, to the effect that the burden of proving the various incidences mentioned under Clauses (a) to (f) therein (including that a dealer or a person notified under sub-section 2 of Section 3 has not affected the entry of any goods specified in Schedule II or Schedule III into a local area for consumption, use or sale therein) shall be upon the dealer or such person as the case may be. 16. There is no dispute with regard to the fact that the goods brought by the Applicant herein are scheduled goods (i.e. either Schedule II or III) and the dispute is only with regard to the place to which the goods are brought, contending that the place being a land belonging to the Railways, it is not a 'local area'. 17. With regard to the law declared by the Division Bench of the Madhya Pradesh High Court in the case of Jethani Cloth Stores, Bilaspur (supra), the question considered was whether the goods were to be purchased from the registered dealers of a local area f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view taken by the learned Single Judge and the appeal preferred at the instance of the Revenue was dismissed. This also does not support the case of the Applicant, as the specific case of the Applicant was with regard to the goods actually brought into the area in question and not the title deeds. 20. It is true that the exact question whether the goods brought into a land belonging to the Railways would constitute a 'local area' in terms of the Section 2(d) of the Adhiniyam of 1976, as such was not considered by the Apex Court in Annexure RA/9 judgment. But it has been noted that the Applicant was none other than the Railways who imported Diesel / High Speed Diesel Oil for its consumption as received at the various Railway Consumer Depots at Rayagada, Kurda and Titlagarh for consumption. The trucks loaded with the Railway consignment were detained at various check posts for collection of Entry Tax under the Orissa Entry Tax Act, 1999 (for short, 'Act of 1999'). The liability mulcted upon the Railways was sought to be challenged mainly contending that Railways were not liable to pay Entry Tax levied under the Act of 1999, in view of the specific provision contai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tate alongwith IA No. 2 of 2019 and as admitted from the part of the Applicant in Annexure R/3 annexed to the reference application (as mentioned in paragraph 4 of I.A. No. 2 of 2019) that the factory of the Assessee is located at 'Badiyatola' which is Ward No. 7 of the Municipality, Dongargarh. Insofar as the place in question is situated in the 'local area' as notified by the Municipality and further since this aspect is not disputed specifically by the Applicant / Assessee, it cannot but be held that the goods were brought by the Applicant / Assessee to the 'local area' and as such the assessment was finalized accordingly, mulcting the Entry Tax. This being the position, the question suggested by the Applicant / Assessee as involving 'questions of law', seeking to have it referred by filing an application before the Tribunal, did not contain any pith or substance. In the said circumstances, rejection of the said application as per Annexure RA/10 order dated 23.07.2018 (which is under challenge) is not liable to be entertained. 23. With regard to the last submission made by the learned counsel for the Applicant that the assessment already finali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ention raised before the Supreme Court was whether it was open for the High Court to go into the question, particularly as to the applicability to the relevant proviso to the provision concerned, which was neither raised before the Tribunal nor considered by it and hence could not therefore be said to be a question arising 'out of the order of the Tribunal', which alone could be referred for decision of Court under Section 66(1). After referring to the relevant provisions of law and the precedents, the Apex Court gave its conclusion as it appears in paragraph 31(per majority) as follows: (1) When a question is raised before the Tribunal and is dealt with by it, it is clearly one arising out of its order. (2) When a question of law is raised before the Tribunal but the Tribunal fails to deal with it, it must be deemed to have been dealt with by it, and is therefore one arising out of its order. (3) When a question is not raised before the Tribunal but the Tribunal deals with it, that will also be a question arising out of its order. (4) When a question of law is neither raised before the Tribunal nor considered by it, it will not be a question arising out of its ..... X X X X Extracts X X X X X X X X Extracts X X X X
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