STATE OF ORISSA Vs. MINERALS AND METALS TRADING CORPORATION OF INDIA LIMITED:MINERALS AND METALS TRADING CORPORATION OF INDIA LIMITED

JUDGEMENT

(1.) The Sales Tax tribunal, orissa referred the following questions under Section 24 (1 of the orissa Sales Tax Act, 1947 (the Act) for the opinion of the High court of orissa, Cuttack:

(2.) The Minerals and Metals Trading Corporation of India Limited, respondent in the appeals herein, is a government company within the meaning of Section 617 of the Companies Act, 1956. The respondent-assessee is registered as a dealer under the Act. During the years 1966-67, 1967-68 and the quarters ending June, September and December 1968, the respondent purchased mineral ores from the mine-owners, who were registered dealers under the Act. While purchasing mineral ores from the mine-owners the respondent gave declarations in terms of Rule 27 of the orissa Sales Tax Rules, 1947 (the Rules) to the effect that the said mineral ores would be resold within the State of orissa. The Sales Tax Officer while examining the accounts relating to the relevant period found that the respondent had sold the mineral ores in the course of export to the Japanese buyers with whom the assessee had pre-existing export contracts. The Sales Tax Officer came to the conclusion that the mineral ores were sold in violation of the declarations furnished by the respondent and, as such, contravened the provisions of Section 5 (2 (A) (a) (ii) of the Act. The Sales Tax Officer added the amount of the relevant sales to the taxable turnover of the respondent and issued a demand for payment of the tax. The respondent filed an appeal before the first appellate authority which was dismissed. Aggrieved by the order of the first appellate authority, the respondent filed a second appeal before the Sales Tax tribunal. It was contended before the tribunal that the goods were resold in orissa and the transaction with the Japanese buyers being sale in the course of export, it was not liable to tax by virtue of Article 286 (1 (b) of the Constitution of India. The tribunal came to the conclusion that the sale by the respondent in favour of the Japanese buyers, was within the State of orissa and, as such there was no violation of the terms of the declarations. The tribunal, however, did not agree with the other contention that the transactions were in the course of export and, therefore, not exigible to sales tax. The tribunal rejected the second contention. The net result was that the assessee was not found liable on account of violation of the undertaking in the declarations but the assessee's sale in favour of the Japanese buyers was found liable to tax. As the accounts had to be re-verified to ascertain the correct figures, the tribunal remanded the matter. The tribunal stated the cases and referred the questions at the instance of both the Revenue as also the assessee for the opinion of the High court. We have already set out the answers given by the High court. S. 2 (g) and 5 (2 (A) (a) (ii) of the Act and Rule 27 (2 of the Rules are reproduced hereunder:

(3.) It would be useful to have before us Article 286 (1 (b) of the Constitution of India and Section 5 (1 of the central Sales Tax Act, 1956 which are as under: