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TMI Blog2023 (4) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... and Ferro Alloys Ltd., Therubali, the petitioner herein, as a private limited company, having its own chromite mines at Sukinda, Kalaringiatta Ransole of Jajpur district and Nua Sahi of Keonjhar district, is engaged in producing Ferro Silicon and High Carbon Ferro Chrome, for which the raw materials like Charcoal, Chrome Ore, Scrap Iron, Bauxite, Lime Stone, Magnesite Coke, etc. are needed. The Assessing Authority, while making assessment for the year 2002- 2003, issued notice under Rule 10(2) of the O.E.T. Rules and Section 12(4) of the O.S.T. Act, 1947, in response to which petitioner caused production of sale invoices, sales book, stock register, statement of monthly return filed under Entry Tax Act and statement of purchase of raw materials and consumables etc. The Assessing Authority, on perusal of the same, found the gross receipt of the scheduled goods stood at Rs.31,71,24,715.00 and scheduled goods worth Rs.4,03,52,755.00 were procured from the registered dealers from inside the State of Odisha. No entry tax was found to be paid on Charcoal, Carbon paste, Coke (imported), Hydrated lime, Molasses and other store materials. These were treated as non-scheduled goods by the pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal came to a conclusion that the same can be taxed under the Orissa Entry Tax Act. So far as penalty is concerned, the Tribunal held that as per Section 7(5) of the O.E.T. Act, the 1st Appellate Authority has already reduced the same to Rs.2.00 lakh taking into consideration the circumstances of the case and legal position. In view of this, the Tribunal did not interfere with the order passed by the First Appellate Authority. Hence, this revision. 3. The petitioner has formulated the following questions of law:- (1) Whether on the facts and in the circumstances of the case, the Sales Tax Tribunal was correct in holding that "Hydrate Lime" being a chemical can be treated as a schedule goods under the O.E.T. Act as mentioned in SI. No.6 Part-1 of Schedule appended to the O.E.T. Act and is liable for entry tax? (2) Whether on the facts and in the circumstances of the case, the Sales Tax Tribunal was correct in confirming the charging of entry tax on imported coke, when the dispute is pending for decision by the Larger Bench of the apex Court? (3) Whether on the facts and in the circumstances of the case, the order passed by the Sales Tax Tribunal is correct in law in confir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x on purchase of Hydrated lime amounting to Rs.23,47,656.00 on the ground that the same is a non-scheduled goods. 7. It is not in dispute that Orissa Entry Tax Act, 1999 was enacted w.e.f. 01.12.1999. Entry 13 of Part I of Schedule appended to O.E.T. Act provides- "Caustic soda, soda ash and silicate of soda" and Entry 62 of Part I of Schedule appended to O.E.T. Act, which was added w.e.f. 24.07.2000, provides- "Sulphur, rock phosphates, ammonia, sulphuric acid, hydrochloric acid, liquid chlorine, caustic soda, alumina" and, as such, other chemicals which are not mentioned in the Schedule appended to the O.E.T. Act are un-scheduled chemicals or chemicals not mentioned in the Schedule appended to the O.E.T. Act. 8. Section 7(5) of the O.E.T. Act, provides that while making any assessment under Sub-section (4) of Section 7, the Assessing Authority may also direct the dealer to pay, in addition to tax assessed, a penalty not exceeding one and half times the amount of tax due that was not disclosed by the dealer in his return. Which means, due to the non-disclosing of schedule goods in the return filed by the assessee, the Assessing Authority may also direct the dealer to pay, in add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh v. Bharat Heavy Electricals Limited, [1997] 106 STC 604 (SC), the apex Court at Para 14 held as follows:- "14. From the aforesaid it follows that section 7(5) has to be constructed to mean that the presumption contained therein is rebuttable and secondly the penalty of ten times the amount of entry tax stipulated therein is only the maximum amount which could be levied and the assessing authority has been discretion to levy lesser amount, depending upon the facts and circumstances of each case. Construing section 7(5) is ultra vires cannot be sustained". 11. The Odisha Entry Tax Act being a new legislation and the petitioner being under the bona fide belief that the disputed goods is an un-scheduled goods and there being some confusion with regard to levy of entry tax on goods imported, being a new legislation, which is in a fluid state, no penalty should have been imposed. In this context, the judgment rendered in Krishna Alloy Steels v. Registrar, TNTST, [2008] 13 VST 424 (Mad), is referred to wherein it has been held as follows:- "The assessments made on the basis of the accounts, and not based on any other materials and were not estimates, had therefore, to be regarded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e as is commonly understood but all offences lead to a penalty. Whereas the former is a penalty which flows from a disregard of statutory provisions, the latter is entailed where there is mens rea and is made the subject-matter of adjudication. Penalty under Section 10(3) of the Act is compensatory. It is levied for breach of a statutory duty for non-payment of tax under the Act. 15. In Amin Chand Payarelal v. Inspecting Asstt. CIT (2006) 7 SCC 483, the apex Court, while considering Section 271(1)(a) of the Income Tax Act 1961, observed that the 'penalty' is a punishment imposed on a wrongdoer. 16. In Consolidated Coffee Ltd v. Agricultural Tax Officer, (2001) 1 SCC 278, while considering the provisions contained in Section 42(1)(i) of the Income Tax Act 1961, the apex Court observed that the word 'penalty' occurring in Section 42(1)(ii) of the Act does not mean 'interest'. It is imposed on the assessee who fails to pay tax in time and the quantum of the penalty increases with the delay. 17. In Karnataka Rare Earth v. Senior Geologist, Deptt. Of Mines & Geology, (2004) 2 SCC 783, the apex Court held that 'Penalty' is a liability imposed as a punishment on the party committing t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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