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TMI Blog2023 (3) TMI 796X X X X Extracts X X X X X X X X Extracts X X X X ..... f 2017 W.P.(C) No. 19737 of 2017 W.P.(C) No. 19738 of 2017 W.P.(C) No. 19739 of 2017 W.P.(C) No. 19974 of 2017 W.P.(C) No. 19975 of 2017 W.P.(C) No.20256 of 2017 and others M/s. Shree Bharat Motors Ltd. and Another M/s. Praxair India, M/s. Nestle India Ltd., M/s. Essel Mining & Industries Ltd., M/s. Koshala Enterprises Pvt. Ltd. M/s. Indera Motors, M/s. Amarnath Enterprises, M/s. Kiran Sanitary and Machinery, M/s. Seetal Automobiles, M/s. Utkal Polyweave Industries Pvt. Ltd., M/s. Bharat Motors, M/s. JMG Automobiles M/s. Super Sales Automobiles Pvt. Ltd., M/s. City Motors Pvt. Ltd., M/s. Consortium Automobiles Pvt. Ltd., M/s. Super Sales Motors Pvt. Ltd., M/s. Utkal Automobiles Pvt. Ltd., M/s. R.K. Marbels M/s. Utkal Auto, M/s. Sunny Motors, M/s. Orbit Motos Pvt.Ltd., M/s. Sky Automobiles M/s. Swati Marbels, Versus The Sales Tax Officer, Bhubaneswar-I Circle, Bhubaneswar and Others State & Others, Commissioner of Sales Tax, Commissioner of Commercial Taxes & Another, State of Odisha Sales Tax Officer, Bhubaneswar-II Advocates appeared in the case: For the Petitioners : Mr. Surya Prasad Mishra, Senior Advocate with M/s. Bhabani Prasad Mohanty and Rudra Prasad Kar, Advocates Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertiorari or a writ in the nature of certiorari, or such other appropriate order/writ/direction quashing the order dated 11.11.2016 passed by the opposite party No.2, under Annexure-6; ii) issue a writ of certiorari or a writ in the nature of certiorari, or such other appropriate order/writ/direction quashing the notices in E-24 dated 26.05.2017 under Annexure-9 series; iii) issue a writ of certiorari or a writ in the nature of certiorari, or such other appropriate order/writ/direction quashing the notices in E-8 dated 26.05.2017 under Annexure-8 series; iv) issue a writ of certiorari or a writ in the nature of certiorari, or such other appropriate order/writ/direction quashing the order dated 24.06.2017 under Annexure-11; v) issue a writ of certiorari or a writ in the nature of certiorari, or such other appropriate order/writ/direction quashing the Circular dated 23.06.2017 under Annexure- 10; vi) issue a writ of mandamus or a writ in the nature of mandamus, or such other appropriate order/writ/direction restraining the opposite parties from proceeding against the petitioner No.1 under the OET Act in any manner whatsoever until the constitutional validity thereof is dete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd hence the legislation is outside Entry 52 of List II of the Constitution of India cannot also be accepted since it is a compensatory tax and since what is taxed or intended to be taxed is only entry of goods into a local area for consumption, sale or use within that area, the whole of the State has necessarily to be brought within the purview of the Act to the extent it is part of a local area as defined in the Act. Therefore, nothing turns on the argument that all parts of the State are brought within the definition by making it a part of one local area or another. The legislation cannot be successfully challenged as a colourable piece of legislation. 44. In the result, while declining to strike down the Orissa Entry Tax Act, 1999 as ultra vires, we direct that- (1) Unless the basic ingredients, i.e., Entry of scheduled goods for the purpose of Consumption, Use or Sale into a local area of the State are satisfied, the provisions of the Orissa Entry Tax Act, 1999 shall not be attracted; (2) The goods which enter into a local area/areas only for the purpose of transit will not be subject to Entry Tax; and (3) Every manufacturer of scheduled goods under Section 26 shall co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or deciding whether a tax is compensatory or not vide para 19 of the report, will continue to apply and the test of 'some connection' indicated in para 8 of the judgment in Bhagatram Rejeevkumar Vrs. Commissioner of Sales Tax, M.P. 1995 Supp (1) SCC 673 and followed in the case of State of Bihar Vrs. Bihar Chamber of Commerce, (supra) is, in our opinion, not good law. Accordingly, the constitutional validity of various local enactments which are the subject matters of pending appeals, special leave petitions and writ petitions will now be listed for being disposed of in the light of this judgment." 2.3. Thereafter, the two-Judge Bench of the Hon'ble Apex Court observed in Jindal Stainless Ltd. (3) Vrs. State of Haryana, (2006) 7 SCC 271 thus: "5. Since relevant data do not appear to have been placed before the High Courts, we permit the parties to place them in the writ petitions concerned within two months. The High Courts concerned shall deal with the basic issue as to whether the impugned levy was compensatory in nature. The High Courts are requested to decide the aforesaid issue within five months from the date of receipt of our order. The judgment in the respective cases sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore we consider whether the impugned enactment facially or patently indicates the quantifiable data on the basis of which the compensatory tax is sought to be levied and whether the Act facially indicates the benefits which is quantifiable or measurable and the proportionality of the quantifiable benefits but we have not found any such thing in the Act. They do not show that payment of entry tax is reimbursement/recompense for the quantifiable and measurable benefits to be provided to its payers. Providing facilities to the citizens or others would not definitely come under the activities like movement of trade, commerce and intercourse for the free flow of trade and commerce. 19. Therefore, the State has failed to show that the Orissa Entry Tax is reimbursement/recompense for the quantifiable and measurable benefits provided to trades people and the provision for realization of tax therein was not compensatory in nature." 2.5. During pendency of aforesaid seven writ petitions, many dealers/persons by way of filing fresh writ petitions questioned the vires of the OET Act, where new plea of discrimination under Article 304(a) of the Constitution of India was raised by the S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Constitution. Therefore, as discussed above, no tax can be imposed on those goods imported from outside the State which are not manufactured or produced in the State of Orissa. However, we do not find any discrimination in the provisions of the Act between the goods imported from outside the State and those manufactured or produced in the State of Orissa and are brought into the local area within a State. In this regard, the definition of 'entry of goods' given in Clause (d) of Section 2 is relevant which shows that there is no discrimination between the goods produced or manufactured within the State of Orissa or imported from outside and are brought within the local area. The rate of tax imposed under the Act or the Rules are also applicable uniformly on the goods imported from outside or goods manufactured within the State which are brought into a local area. Therefore, it cannot be said that the Orissa Entry Tax Act is not made under Clause (a) of Article 304 of the Constitution. However, the State has no jurisdiction to impose tax on such goods imported from outside and are not manufactured within the State of Orissa. Therefore, the opposite parties may make scrutiny of the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2009. Both these lists are covered by Paragraph (30) of the impugned judgement. The lists read thus: *** Having regard to the outstanding amounts in List-A and List-B, mentioned hereinabove, we are of the view that each of the assessees will, without prejudice to its rights, deposit with the Department one-third of the outstanding amount indicated in List-A and List-B as on 30th September, 2009, before 31st March, 2010. Each of such assessees will also continue to deposit with the Department the outstanding amount on the basis of the current liabilities, which has accrued after 30th September, 2009, at the rate of 33 1/3rd% of the amount due in the monthly Returns which each of the assessees has been filing with the Department. It needs to be clarified that this order is confined to cases falling under Paragraph (30) of the impugned judgement. As far as the item, which is not covered by Paragraph (30) of the impugned judgement, is concerned, liberty is given to the assessees to move separate interlocutory applications. Before concluding, it may be mentioned that the State of Orissa will file an affidavit undertaking to refund the amount in the event of the State losing its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 02.2010 passed by the Hon'ble Supreme Court used to dispose of the writ petition(s). One of such cases being M/s. Annapurna Agency Vrs. State of Odisha, W.P.(C) No.5555 of 2010, following Order was passed on 06.05.2010: "Heard learned counsel for the petitioner and learned counsel for the Revenue. It is stated by the learned counsel for the petitioner that the dispute relating to paragraph 30 of the judgment dated 18.02.2008 rendered by this Court in the case of M/s. Reliance Industries Ltd., Vrs. State of Orissa and Others reported in (2008) 16 VST 85 (Orissa), which is similar to the case of the present petitioner, is now pending adjudication before the apex Court in SLP(C) No. 14454-14778 of 2008. In view of the order dated 3.2.2010 passed by the apex Court in I.A. Nos. 327-651/2009, arising out of the aforesaid SLPs, we direct the petitioner to pay 1/3 of the arrear dues that would be computed up to 30.9.2009, by the end of May, 2010. As to the other arrear dues and current liability with effect from October 2009 onwards, the petitioner shall go on paying at the rate of 33 1/3% from June, 2010 along with the return. We make it very clear that the amount which is directe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tea Co., AIR 1961 SC 232 = (1961) 1 SCR 809 and Automobile Transport (Rajasthan) Ltd., AIR 1962 SC 1406 = (1963) 1 SCR 491. 11. Some of these aspects which need consideration by a larger Bench of this Court may be briefly enumerated. Interplay/interrelationship between Article 304(a) and Article 304(b). The significance of the word "and" between Articles 304(a) and 304(b). The significance of the non obstante clause in Article 304. The balancing of freedom of trade and commerce in Article 301 vis-à-vis the States' authority to levy taxes under Article 245 and Article 246 of the Constitution read with the appropriate legislative entries in the Seventh Schedule, particularly in the context of movement of trade and commerce. 12. Whether Article 304(a) and Article 304(b) deal with different subjects? Whether the impugned taxation law to be valid under Article 304(a) must also fulfil the conditions mentioned in Article 304(b), including Presidential assent? Whether the word "restrictions" in Article 302 and in Article 304(b) includes tax laws? Whether validity of a law impugned as violative of Article 301 should be judged only in the light of the test of non- discrimination? ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s batch of cases be put before the Hon'ble the Chief Justice of India for constituting a suitable larger Bench for reconsideration of the judgments of this Court in Atiabari Tea Co., AIR 1961 SC 232 = (1961) 1 SCR 809 and Automobile Transport (Rajasthan) Ltd., AIR 1962 SC 1406 : (1963) 1 SCR 491." 2.11. While the matter stood thus, this Court heard another batch of matters raising question as to whether scheduled goods imported from outside the territory of India is exigible to Odisha entry tax and delivered Judgment dated 09.10.2012 in the case of Tata Steel Ltd. Vrs. State of Odisha, etc., etc., 2013 (I) ILR-CUT 256, by holding thus: "36. Thus, on the basis of the discussions resorted to above, this Court comes to the conclusion that the argument advanced by learned counsel for the petitioners that entry tax is not leviable on the goods imported through buyers is attractive but is without substance." 2.12. Said Judgment being carried to the Hon'ble Supreme Court of India in SLP(C) No.33923 of 2012, and Others, the following interim Order dated 09.04.2013 was passed: "*** After hearing the learned counsel for the parties to the lis, we are of the opinion that a conditional i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tionist sense) and not on mere differentiation. Therefore, incentives, set-offs etc. granted to a specified class of dealers for a limited period of time in a non-hostile fashion with a view to developing economically backward areas would not violate Article 304(a). The question whether the levies in the present case indeed satisfy this test is left to be determined by the regular benches hearing the matters. 9. States are well within their right to design their fiscal legislations to ensure that the tax burden on goods imported from other States and goods produced within the State fall equally. Such measures if taken would not contravene Article 304(a) of the Constitution. The question whether the levies in the present case indeed satisfy this test is left to be determined by the regular benches hearing the matters. 10. The questions whether the entire State can be notified as a local area and whether entry tax can be levied on goods entering the landmass of India from another country are left open to be determined in appropriate proceedings." 2.14. Thereafter, Division Bench of the Hon'ble Supreme Court of India, in the case of Bharti Airtel Ltd. Vrs. Assessing Authority, Od ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earing for the State of Orissa has opposed the prayer of the petitioner seeking liberty to raise the issue. It is contended that petitioners have not raised the relevant issues nor pleaded in support of the plea of discrimination under Article 304(a). The parameters under which entry tax can violate the Article 304(a) has now been conclusively laid down by Nine Judges Bench in Jindal Stainless Ltd.(supra). We are thus of the view that liberty be given to petitioners to raise the plea of discrimination under Article 304(a) in accordance with the law as laid down by Nine Judges Bench in Jindal Stainless Ltd.(supra). We, however, are of the view that for the above purposes, it is not necessary to grant any liberty to file a fresh writ petition at this stage and at this distance of time. The ends of justice shall be served, if liberty is granted to the petitioners to revive their writ petitions by making a proper application before the High Court. In the writ petitions which have been dismissed by the Orissa High court against which present appeals are decided, the liberty to revive such petition and to urge ground under Article 304(a) is granted which can be availed only within the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The appeals filed by the State of Kerala are allowed. The judgment of the Division Bench holding that no entry tax was leviable on the vehicle imported from territories outside the country is set aside, restoring the judgment of the learned Single Judge. (v) Writ Petition 574 of 2003, Parisons Agrotech Pvt. Ltd. Vrs. State of Kerala & Ors. is dismissed. (vi) In Civil Appeals filed against judgment of Orissa High Court, appellants who were writ petitioners before the High Court are given liberty to file an application within 30 days from today to revive their writ petitions and urge ground of discrimination under Article 304(a) as per law laid down by Nine Judges Bench in Jindal Stainless Ltd.(supra)." 2.16. The Taxing Authorities having sprung into action by serving demand notices with respect to balance tax which remained unpaid after complying with the conditional/partial deposit as directed by the Hon'ble Supreme Court along with interest invoking provisions of Section 7(5) of the OET Act besides penalty, writ petitions have been filed challenging Assessment Orders, notice(s) in Form E-24 indicating less payment of tax in the return(s) and demand notice(s) in Form E-8. 2.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Odisha Gazette for general information of public. N. K. RAUTRAY Additional Secretary to Government" 2.18. Report submitted by the Committee as has been referred to by this Court in Order dated 24th April, 2019 in the matter of S.S. Steeloy Pvt. Ltd. Vrs. Commissioner of Commercial Taxes, Odisha and Others, W.P.(C) No. 21007 of 2017 and batch of matters runs as follows: "09. 24.04.2019 Pursuant to order dated 08.12.2017 passed in W.P.(C) No.21189 of 2017, the report of the Committee constituted to redress grievances pertaining to payment of penalty and interest by various tax payers under the Odisha Entry Tax Act, 1999 in sealed cover is produced from the custody of Mr.B.P. Pradhan, learned Additional Government Advocate and in the presence of learned counsel for the parties, the cover is opened. Perused the Report. The recommendations of the said Committee is quoted below: "7. Recommendation of the Committee In the light of the analysis made above the Committee recommends the following guidelines for waiver of penalty, payment of interest and grant of other concessions specifying as follows: (1) Penalty should not be levied/imposed for non-payment of the withheld amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decided at final hearing stage. Learned counsel for the petitioners will inform the learned counsel for the Revenue regarding the amount deposited by producing photocopy of the challan within a week from the date of deposit and not later than 3rd August, 2019. If there is any difference, learned counsel for the Revenue will inform the counsel for the petitioners that the respective petitioner(s) is/are required to pay the differential amount on the basis of calculation made by the Assessing Officer and the same be complied with accordingly." 2.19. In the aforesaid batch matters [S.S. Steeloy Pvt. Ltd. (supra)] this Court passed further orders on 02.01.2020. After extracting aforesaid Order dated 24.12.2019, the following order has been passed: "2. We make it clear that those assesses who are complying with the orders, if request for instalments, the same will be considered by the Commissioner in accordance with the rules on filing of an undertaking by the concerned partner or the Director of the company along with a resolution of the said firm or company to the effect that they shall comply with the Court's order to be passed from time to time. 3. We further make it clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... direction of this Court the Committee having recommended not to enforce penalty for non-payment or withholding of entry tax, except in cases of suppression, the taxable persons/dealers are liable to pay interest under Section 7(5) for the period from 2010 (interim Order dated 03.02.2010 being passed by the Supreme Court in State of Odisha Vrs. Reliance Industries Ltd., I.A. Nos. 327-651 in SLP(C) Nos.14454-14778/2008) to 2017 (till 28.03.2017, i.e, date on which the Division Bench of Supreme Court allowed the appeals of the State of Odisha)? Argument(s) advanced by the learned Counsel for the petitioners: 4. It is urged by counsel for the petitioner(s) that: (a) since the Hon'ble Supreme Court directed for interim protection vide Order dated 03.02.2010 in State of Odisha Vrs. Reliance Industries Ltd. (supra), there was sufficient cause for withholding tax liability to the extent of 2/3rd of tax due during the pendency of matters before the Hon'ble Supreme Court. (b) The Supreme Court having clarified in the said Order that such deposit of 1/3rd of tax liability would be treated as "deposit", but not "tax" in the I.A. Nos. 327-651 in SLP(C) Nos.14454-14778/2008 filed by the St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , but not interest. (h) Even for the sake of argument it is conceded that there was less payment of tax, since machinery provision was not invoked by the Department to determine the balance tax and raise demand accordingly at the relevant point of time, there could not have been any demand for interest in absence of any finding by the Revenue as to insufficient cause. In other words, the Revenue having not recorded any finding as to "without sufficient cause" the petitioner withheld tax liability as disclosed in the return(s), there was no scope or occasion for the Authorities to insist for payment of interest on the balance tax payable. Since the circumstance under which there was short-payment of tax, principally on account of interim Order of the Hon'ble Supreme Court, additionally final order being passed by disposing of writ petition(s) by this Court following said interim order and the legal position as to exigibility of entry tax being unclear till 2017, cannot be imputed as lack of bona fides, negligence on the part of the petitioner or indolence of the taxable person(s). Hence, seeking to recover the balance tax along with interest is unjust and improper. (i) Clarity i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the balance unpaid entry tax for the period prior to 2017 inasmuch as the amount of 1/3rd was treated as "deposit" till pronouncement on 28.03.2017. Very levy of entry tax was in doldrums in many States, vires of which was subject-matter of challenge before the Supreme Court including that of the Odisha Entry Tax Act, 1999 and upon formation of the Committee pursuant to direction of this Court consciously reached at a consensus that penalty would not be enforced for such non-payment of tax in respect of turnover which fell within the ambit of proposition laid down in paragraph 30 of Reliance Industries Ltd. Vrs. State of Odisha, (2008) 16 VST 85 (Ori). 4.2. There was "sufficient cause" for non-payment of entire entry tax liability disclosed in the return(s). Section 7(5) of the OET Act authorizes levy of interest only if the Taxing Authority shows that non-payment was "without sufficient cause". In the present circumstance, thus, provision of Section 7(5) does not attract. 4.3. Refuting the contention of the Revenue to the effect that there was shifting of burden of tax on the customers, it has been specifically pleaded by the petitioner by way of rejoinder affidavit that in vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onomically and commercially non-viable due to its huge accumulated losses and liabilities and should be wound up. The appeal filed by the appellant-company under Section 25 of the Act against said order of the Board was dismissed by the Appellate Authority by order dated January 7, 1991. As a result of these orders, no proceedings under the Act were pending either before the Board or before the Appellate Authority on February 21, 1991 when the Delhi High Court passed the interim order staying the operation of the order of the Appellate Authority dated January 7, 1991. The said stay order of the High Court cannot have the effect of reviving the proceedings which had been disposed of by the Appellate Authority by its order dated January 7, 1991. While considering the effect of an interim order staying the operation of the order under challenge, a distinction has to be made between quashing of an order and stay of operation of an order. Quashing of an order results in the restoration of the position as it stood on the date of the passing of the order which has been quashed. The stay of operation of an order does not, however, lead to such a result. It only means that the order which h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turing Co. Vrs. CTO, (1997) 6 SCC 262, the Hon'ble Court distinguished ratio of J.K. Synthetics Ltd., (1994) 4 SCC 276 and observed as follows: "15. But the position here is explicitly distinguishable from the factual situation in J.K. Synthetics Ltd., (1994) 4 SCC 276 Here, nobody had doubt that if Section 6-B of the Act was valid the tax was payable on the turnover. It was the constitutional validity of Section 6-B which was challenged by the appellants in the earlier writ petitions before the Calcutta High Court and which finally ended up in upholding of its validity. Hence, there was no question of the assessee waiting for the determination and the turnover as there was no dispute on that aspect. The fact that appellants questioned the constitutional validity of the charging provision cannot be equated with a dispute whether the freight paid would also form part of the sale amount. It was a highly debated dispute whether price amount would envelope the freight charges paid by the dealer and until the controversy was resolved by the Court in Hindustan Sugar Mills Vrs. State of Rajasthan, (1978) 4 SCC 271 the dealers were justified in excluding the freight charges from sale pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supporting all the above contentions and arguments, urged that penalty could not be imposed by the Revenue Authorities inasmuch as there was sufficient cause for non-payment of tax due. There is much of difference between "tax due" and "tax payable". Therefore, neither penalty could be visited nor does the petitioner(s) liable to be fastened with the interest under Section 7(5). Section 7(5) having close proximity with sub-sections (10) and (11), at his sweet-will the Taxing Authority is not competent to raise demand for interest/penalty inasmuch as this Court while delivering Judgment in Reliance Industries Ltd., (2008) 16 VST 85 (Ori) bestowed on the statutory authority to examine/ scrutinize the transactions falling within the scope of what has been expounded in paragraph 30 ibid. 4.12. Sri Sanjiv Udgata, learned Advocate posed that when this Court following interim Order dated 03.02.2010 passed in consideration of I.As. in S.L.Ps. filed by the State of Odisha disposed of writ petition of the petitioner(s) questioning validity of the very levy of entry tax under the OET Act, the State of Odisha in certain cases having not preferred appeal before the Supreme Court, the same can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trued by the taxable persons as if said observation has attained finality. The proceeding before the Hon'ble Supreme Court challenging vires of the statute does not mean the non- payment of legitimate taxes is on account of "sufficient cause". Thus, the contention of the petitioner(s) that the non-deposit of tax due as disclosed in the return(s) was with "sufficient cause" cannot be accepted. Therefore, in the fact-situation of the instant case, the provisions of Section 7(5) have been appropriately made attracted. 5.2. Referring to observation in Gujarat Urja Vikas Nigam Ltd. Vrs. Amit Gupta, (2021) 7 SCC 209 that "textually similar language in different enactments has to be construed in the context and scheme of the statute in which the words appear. The meaning and content attributed to statutory language in one enactment cannot in all circumstances be transplanted into a distinct, if not, alien soil", Sri Dwivedi opposed the concept of liberal approach as put forth in the context of condonation of delay regard being had to the language employed in the Limitation Act, 1963 vis-à- vis the Land Acquisition Act, 1894, while conceiving the meaning of "sufficient cause" vide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ling with a case where the High Court had finally struck down the revised tariff, but the said decision was reversed in appeal. In the present case the appellant had obtained only an ad interim order of stay against the enforcement of the tariffs. There is a qualitative difference in the two situations. Even if one were to take a charitable view of the legal effect of any direction of the High Court, pending adjudication by the Court, cases in which the High Court finally held the tariffs to be bad would in our opinion stand on a different footing than cases where the party obtains an order granting interim protection to it. While there is an element of finality in the case of a final adjudication by a competent court insofar as that Court is concerned, an interim order can be vacated at any stage. The interim order may not even prevent a prudent party from paying the charges according to the revised tariffs if it does not propose to take any chance and suffer recovery of an additional amount on account of the non- payment of the dues by the date stipulated for the purpose." 5.7. It is also submitted that the interest being automatic and levied by operation of law, in view of Pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pra) being not followed, the demand for less payment of tax as made in Form E-24 cannot sustain, much less interest thereon on account of non-payment of balance tax during 2010-17. Jindal Stainless Ltd. Vrs. State of Haryana, (2017) 12 SCC 1 is a Judgment in rem: 7. There is no cavil that Judgment rendered by Nine-Judge Constitution Bench of the Hon'ble Supreme Court of India in the matters of Jindal Stainless Ltd. Vrs. State of Haryana, (2017) 12 SCC 1 is a Judgment in rem and not a Judgment in personam. Deccan Paper Mills Co. Ltd. Vrs. Regency Mahavir Properties & Others, (2021) 4 SCC 786 laid down with respect to judgment in rem as follows: "24. P. Ramanatha Aiyar's Advanced Law Lexicon (3rd Edn., Wadhwa Nagpur) describes an in rem proceeding as follows: 'In rem. adj. [Latin "against a thing"] Involving or determining the status of a thing, and therefore the rights of persons generally with respect to that thing.- Also termed (archaically) impersonal. (Black 7th Edn., 1999) 'An action in rem is one in which the judgment of the Court determines the title to property and the rights of the parties, not merely as between themselves, but also as against all persons at any tim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and a judgment will not be binding upon any one who was not before the Court. An act or proceeding is in rem when it is done or directed with reference to no specific person and consequently against or with reference to all whom it might concern, or 'all the world'. Lawsuits brought against property as compared with those against a person; the Court's jurisdiction does not depend on notice to the property owner." 25. In R. Viswanathan Vrs. Rukn-ul-Mulk Syed Abdul Wajid, (1963) 3 SCR 22, this Court set out the Roman law concept of jus in rem as follows: "17. Roman lawyers recognised a right either as a jus in rem or a jus in personam. According to its literal meaning "jus in rem" is a right in respect of a thing, a "jus in personam" is a right against or in respect of a person. In modern legal terminology a right in rem, postulates a duty to recognise the right imposed upon all persons generally, a right in personam postulates a duty imposed upon a determinate person or class of persons. A right in rem is therefore protected against the world at large; a right in personam against determinate individuals or persons. An action to enforce a jus in personam was originally regar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as follows: '10. ... A judgment in rem is defined in English law as "an adjudication pronounced (as its name indeed denotes) by the status, some particular subject- matter by a tribunal having competent authority for that purpose". Spencer Bower on Res Judicata defines the term as one which "declares, defines or otherwise determines the status of a person or of a thing, that is to say, the jural relation of the person or thing to the world generally"...' ..." 7.1. Judged the contention of the counsel for the petitioner(s) that the State of Odisha did not challenge the Order passed by this Court in certain cases before the Supreme Court does not obliterate the impact and the competence of the Taxing Authority in initiating action for recovery of taxes. However, so far as levy of interest is concerned the same depends on the language of the statutory provision. Relevant provisions of the OET Act and rules framed thereunder: 8. To appreciate arguments and counter-agruments of respective parties following provisions contained in Sections 3 and 7 of the OET Act are relevant to be taken note of: Section 3: (1) There shall be levied and collected a tax on entry of the scheduled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... serve a notice in the prescribed form on the dealer to make payment of the extra amount of tax along with the interest as per the provisions of this Act, by the date specified in the said notice." 8.1. So far as is necessary for the present purpose, the following provisions of Rule 10 may be pertinent: Rule 10: "(1) (a) The return under sub-section (1) of Section 7 of the Act shall be in Form E3 and shall be submitted within twenty one days of the date of expiry of the month or quarter, as the case may be, to which the return relates. The return shall be submitted to the Deputy/Assistant Commissioner/Sales Tax Officer of the Circle/assessment unit], as the case may be, to whom the return under VAT Act and the Rules made thereunder are required to be submitted by the dealer: Provided that where the dealer is not registered under VAT Act and the Rules, such return shall be submitted to the Deputy/Assistant Commissioner/ Sales Tax Officer of the Circle/assessment unit, under whose jurisdiction the principal place of business or place of business, as the case may be, of the dealer is situated. (b) The revised return under sub-section (2) of Section 7 of the Act shall be in For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y shall be imposed under sub-section (7) of Section 7 and the order shall be issued in Form E23. (d) The mode of payment of penalty shall be the same as specified in sub-rule (3). (6) (a) Each and every return in relation to any tax period furnished by a dealer shall be subject to manual or system based scrutiny. (b) If, as a result of such scrutiny, the dealer is found to have made payment of tax less than what is payable by him for the tax period, as per the return furnished, the assessing authority shall serve a notice in Form E24 upon the dealer directing him to pay the balance tax and interest thereon by such date as may be specified in that notice." 9. Harmonious reading of the above provisions along with charging provision, i.e., Section 3 of the OET Act gives clear indication that whereas the entry tax is exigible on entry of goods- specified in the Schedule appended to the OET Act- into the local area for consumption, use or sale therein and return disclosing "tax payable" is required to be furnished as per sub- section (1) of Section 7. It is provided under sub-section (10) thereof that each and every return is to be scrutinized by the Assessing Authority. If mista ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. At the relevant of time when the returns were filed in conformity with interim Order dated 03.02.2010 of the Supreme Court read with paragraph 30 of Reliance Industries Ltd., (2008) 16 VST 85 (Ori), it cannot be said that there was "mistake" in the returns in terms of sub-section (10) of Section 7. 10.2. It seems there is obvious reason for not undertaking scrutiny of returns during 2010-17. The Hon'ble Supreme Court in the interim Order dated 30.10.2009 granted stay of operation of paragraph 30 of said Judgment of this Court to the extent which spelt out that 'The State has no jurisdiction to impose tax on such goods imported from outside and are not manufactured within the State of Orissa. Therefore, the opposite parties may make scrutiny of the same and not realize entry tax on such goods'. Though said interim order suffered modification vide Order dated 03.02.2010 by directing the dealers to deposit 1/3rd of the tax liability shown in the returns, the Assessing Authorities have not taken up "each and every return" for scrutiny. 10.3. Therefore, it is not justified on the part of the Assessing Authorities to issue demand notice(s) in Form E-24 prescribed under Rule 10(6)(b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eliance Industries Ltd., (2008) 16 VST 85 (Ori). 11.2. Under the above premises, the tax was not payable in view of interim Order dated 03.02.2010 of the Supreme Court read with paragraph 30 of Reliance Industries Ltd., (2008) 16 VST 85 (Ori). The tax due revived upon eclipse being removed over paragraph 30 of said Judgment in Order dated 28th March, 2017 of the Hon'ble Supreme Court passed in State of Odisha Vrs. Reliance Industries Ltd. and Others, SLP(C) No.14454- 14778/2008 pursuant to legal position being declared in Jindal Stainless Ltd. Vrs. State of Haryana, (2017) 12 SCC 1. 11.3. The process of self-assessment comprehends the concept of admitted tax. Reference can be had to Section 2(q) of the OET Act read with Section 2(47) of the Odisha Value Added Tax Act, 2004. Section 2(47) of the said OVAT Act defines the term "SELF-ASSESSMENT" to mean "a true and correct determination of net tax liability by a dealer in relation to any tax period". Thus, the dealer is required by law to calculate his own tax liability and is given a time-frame to pay the same along with the return. It is quite possible that by the ultimate assessment the tax due may vary- be more or even less- but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liable to pay balance amount of tax with interest. 12.2. This apart, this Court acknowledged the difficulties of the petitioners and directed for constitution of Committee which has consciously accepted the proposition not to impose penalty, but stuck to levy of interest under Section 7(5) of the OET Act. However, this Court on consideration of such report of the Committee, directed for discharge of liability to pay interest on the balance amount due after declaration of the law by the Hon'ble Supreme Court. This Court further was apprised of the fact that the Commissioner of Sales Tax, Odisha on being approached, has, in many cases, directed the parties to make payment of balance tax along with interest in instalments. This Court is, therefore, of the considered view that there was sufficient cause for the petitioners for non-deposit of tax at the relevant point of time. In other words, there was no failure to pay the amount of tax due as per the return "without sufficient cause". 12.3. The expression 'sufficient cause' is adequately elastic to enable the Court to apply the law in a meaningful manner which subserves ends of justice- that being the life purpose for the existence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice which itself presupposes no negligence or inaction on the part of the applicant, to whom want of bona fide is imputable. The expression 'sufficient cause' implies the presence of legal and adequate reasons. The word 'sufficient' means adequate enough, as much as may be necessary to answer the purpose intended. It embraces no more than that which provides a plenitude which, when done, suffices to accomplish the purpose intended in the light of existing circumstances and when viewed from the reasonable standard of practical and cautious men. The sufficient cause should be such as it would persuade the Court in exercise of its judicial discretion, to treat the delay as an excusable one. These provisions give the Courts enough power and discretion to apply a law in a meaningful manner, while assuring that the purpose of enacting such a law does not stand frustrated. The test is whether or not a cause is sufficient to see whether it could have been avoided by the party by the exercise of due care and attention. Reference may be had to Balwant Singh Vrs. Jagdish Singh, 2010 AIR SCW 4848 and State of Gujarat Vrs. Karnavati Veneers Pvt. Ltd., (2014) 68 VST 367 (Guj). 12.8. The meanin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the particular facts of the case. Vide Hira Sweets & Confectionary Pvt. Ltd. Vrs. Hira Confectioners, 2021 SCC OnLine Del 1823. 12.10. In Santanu Kumar Mohapatra Vrs. Bijayanti Nanda, 2006 (Supp.-I) OLR 1107 (Ori) reference has been made to Arjun Singh Vrs. Mahindra Kumar, AIR 1964 SC 993. There is no material difference between the facts to be established for satisfying the two tests of 'good cause' and 'sufficient cause'. There cannot be a 'good cause' which is not 'sufficient' as affording an explanation for non-appearance, nor conversely a 'sufficient cause' which is used in this context in other statutes. If, on the other hand, there is any difference between the two, it can only be that the requirement of a 'good cause' is complied with on a lesser degree of proof than that of 'sufficient cause' assuming the applicability of the principle of res judicata to the decisions in the two proceedings, if the Court finds in the proceeding under Order 9, Rule 7, Code of Civil Procedure the lighter burden not discharged, it must be a fortiori bar the consideration of the same matter in the later proceeding under Order 9, Rule 13, C.P.C. where the standard of proof of that matter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was "sufficient cause" for the petitioner for depositing partial/conditional amount out of the tax due as per return in terms of sub-section (1) read with sub- section (5) of Section 7. Hence, the exercise of jurisdiction to levy interest under Section 7(5) of the OET Act cannot be countenanced in law. 13. It is trite that provision for interest is to be construed as substantive law and not machinery provision. Ordinarily charging section which fixes liability is to be strictly construed. But the rule of strict construction is not extended to the machinery provisions which are construed like any other statute. The machinery provisions must be so construed as would effectuate the object and purpose of the statute and not defeat the same. Any provision made for charging or levying interest on delayed payment of tax must be construed as a substantive law and not adjectival law. 13.1. It has been re-stated vide Shree Bhagwati Steel Rolling Mills Vrs. Commissioner of Central Excise, (2016) 36 GSTR 222 (SC) that a Constitution Bench decision in VVS Sugars Vrs. Government of Andhra Pradesh, (1999) 114 STC 47 (SC) has held as follows: "This Court in India Carbon Ltd. Vrs. State of Assa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be sustained. Therefore, the said demand of interest, impugned in the appeal is quashed. ***" 13.3. In view of the above authoritative pronouncements there is no ambiguity in holding that in the presence of the expression "without sufficient cause" in sub-section (5) of Section 7 of the OET Act and the petitioner(s) having justified by showing sufficient cause for failure to deposit amount of tax due along with the return, which cannot be treated as admitted tax in view of legal position contained in paragraph 30 of Reliance Industries Ltd., (2008) 16 VST 85 (Ori), interest under Section 7(5) of the OET Act is not chargeable on such turnover falling within ambit of portion the said Judgment. Whether Court can grant interest in exercise of jurisdiction under Article 226 of the Constitution of India: 14. Since there is no other provision to comprehend piquant situation that arose in the present case, the State of Odisha is liable to be compensated. It may be apt to reiterate that the Hon'ble Supreme Court granted stay and directed the petitioner(s) to deposit 33- 1/3% of the amount of tax due while filing returns, the same was required to be obliged and in fact from undeniable p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned in the decision of this Court in the case of M/s. Atma Ram Properties (P) Ltd. Vrs. M/s. Federal Motors Pvt. Ltd. (2005) 1 SCC 705 which is as hereunder, 'The power to grant stay is discretionary and flows from the jurisdiction conferred on an appellate Court which is equitable in nature. To secure an order of stay merely by preferring an appeal is not the statutory right conferred on the appellant. So also, an appellate Court is not ordained to grant an order of stay merely because an appeal has been preferred and an application for an order of stay has been made. Therefore, an applicant for order of stay must do equity for seeking equity. Depending on the facts and circumstances of a given case an appellate Court, while passing an order of stay, may put the parties on such terms the enforcement whereof would satisfy the demand for justice of the party found successful at the end of the appeal. In South Eastern Coalfields Ltd. Vrs. State of M.P. & Ors., (2003) 8 SCC 648, this Court while dealing with interim orders granted in favour of any party to litigation for the purpose of extending protection to it, effective during the pendency of the proceedings, has held that such i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by providing opportunity to the private respondents." 14.4. The Full Bench of this Court in a batch of cases being IDL Industries Ltd. Vrs. State of Odisha, (2004) 134 STC 62 (Ori) has discussed the concept of "interest" in the following manner: "In the Black's Law Dictionary, interest for use of money has been explained as follows: 'Interest is the compensation allowed by law or fixed by the parties for the use or forbearance of borrowed money (Jones v. Kansal Gas and Electric Co. 222 Kar 3390, 565 P.2d 597, 604). Basic cost of borrowing money or buying on instalment contract. Payments a borrower pays a lender for the use of money. Cost of using credit or funds of another. A Corporation pays interest on its bonds to the bondholders.' 'Conventional interest' and 'legal interest' have also been explained in the said dictionary thus: Conventional interest: 'Interest at the rate agreed upon and fixed by the parties themselves, as distinguished from that which the law would prescribe in the absence of an explicit agreement.' Legal interest: 'A rate of interest fixed by statute as either the maximum rate of interest permitted to be charged by law, or a rate of interest t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee as well as to the State, at least at the bank rate of interest on long term fixed deposits.'..." 14.6. The Full Bench concluded inter alia by laying down that: "68. In view of the foregoing discussions, we answer the questions referred to us/formulated by us in the following manner: (1) to (5) *** (6) When a dealer is directed to deposit some amount as per the orders of the High Court and the Supreme Court, he is entitled to get compensation by way of interest on the amount of refund ultimately calculated from such date at such rate as is directed by the said Courts." 14.7. In the context of award of interest on delay in refund, the Honourable Supreme Court of India in the case of Tata Refractories Ltd. Vrs. Sales Tax Officer, (2003) 1 SCC 65 = (2003) 129 STC 506 (SC) held as follows: "It is to be noted that the order of the High Court in earlier writ petition namely OJC No.1200 of 1995 was made by the High Court in the exercise of its power under Articles 226 and 227 of the Constitution of India wherein while directing the appellants to deposit the amount quantified therein, the High Court also issued a direction to the respondent State that it should refund the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court's order, the statutory provisions are applicable. At the same time it cannot be lost sight of that no order varying the order of the Commissioner granting interest is in operation. That being so, on the peculiar circumstances of the case, grant of interest at the rate of 9% would be appropriate. *** 14.9. In the case of Union of India and Others Vrs. Willowood Chemicals Pvt. Ltd. and Another, (2022) 9 SCC 341 the Hon'ble Supreme Court has held as follows: "18. Coming back to the present cases, the relevant provision has prescribed rate of interest at 6 per cent where the case for refund is governed by the principal provision of Section 56 of the CGST Act. As has been clarified by this Court in Modi Industries Ltd., (1995) 6 SCC 396 and Godavari Sugar Mills Ltd., (2011) 3 SCC 501 wherever a statute specifies or regulates the interest, the interest will be payable in terms of the provisions of the statute. Wherever a statute, on the other hand, is silent about the rate of interest and there is no express bar for payment of interest, any delay in paying the compensation or the amounts due, would attract award of interest at a reasonable rate on equitable grounds. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (s) in Annexure-9 series are quashed. As a consequence thereof, the Order dated 24.06.2017 passed in revision case No. BH-30(E)/2017-18 by the Commissioner of Sales Tax, Odisha is set aside. Noteworthy here to quote the following observations made in said Toyo Engineering (supra): "15. Thus, on a conjoint reading of the above provisions, if a dealer is required to pay the tax due as per the return and he fails to make payment of the tax due as per the return and interest accrued thereon along with return or revised return the show cause notice is served upon the dealer to make payment of the tax due on the return. If the dealer fails to respond to such notice an order has to be issued in Form E-23 imposing penalty. 16. In the instant case, the petitioner-dealer has filed its nil return for the period under consideration. Since it is not the case of the assessing officer that the dealer has admitted certain amount towards its tax liability in the return and made less payment than the amount admitted to be payable by him in its return, he is not justified to issue notice in Form E-24 and consequently demand notice in Form E-8 raising demand of Rs.13,33,115/-. According to the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of juridical discipline require that the orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities. The mere fact that the order of the appellate authority is not 'acceptable' to the department- in itself an objectionable phrase- and is the subject-matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent Court. If this healthy rule is not followed, the result will only be undue harassment to assessees and chaos in administration of tax laws.' 24. Therefore, the judgment of this Court in W.P.(C) No.6515 of 2006 [Reliance Industries Limited Vrs. State of Odisha, (2008) 16 VST 85 (Ori)] disposed of on February 18, 2008 is binding on all parties while special leave petition against the said judgment has been admitted in the apex Court and is pending disposal." 15.2. After disposal of the Appeals filed at the behest of the State of Odisha before the Honourable Supreme Court vide Order dated 28th March, 2017 in the cases of State of Odisha Vrs. Reliance Industries Limited, etc., etc. being SLP(C) Nos.14454- 14778/2008 pursuant to Nine-Judge Bench decision rendered in Jindal Sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods are manufactured/produced within the State, entails the assessment(s) to include the turnover which fell within ken of law declared in paragraph 30 of Reliance Industries Ltd. (2008) 16 VST 85 (Ori) and the petitioner-dealer(s) is required to discharge liability accordingly. Orders and Directions: 17. In view of interpretation put forth by this Court in Toyo Engineering (supra) notice(s) in Form E-24 prescribed under Rule 10(6)(b) of the OET Rules vide Annexure-9 series, which was subject-matter of revision before the Commissioner of Sales Tax, Odisha, is set aside and consequently the order-in-revision is also set aside. This Court directs the petitioner(s) to pay the balance entry tax relating to the period 2010-17 as disclosed in the returns along with interest for the delay in payment after 28th March, 2017, as has already been directed in Order dated 24th April, 2019 passed in the matters of S.S. Steeloy Pvt. Ltd. Vrs. Commissioner of Commercial Taxes, Odisha and Others, W.P.(C) No. 21007 of 2017 and batch of matters. 17.1. Considering the peculiar nature of the lis, such balance entry tax (2/3rd of tax due which remained unpaid during 2010-17) can be determined by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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