STATE OF ORISSA Vs. UTKAL DISTRIBUTORS P LIMITED

JUDGEMENT

(1.) These appeals by special leave are directed against the Judgment of the Orissa High Court in a reference made to it under S. 24 (1) of the Orissa Sales Tax Act, 1947. The following questions were referred:

(2.) Before we examine the facts and circumstances of the case, it is convenient to set out the relevant provisions of Orissa Sales Tax Act, 1947 (hereinafter called the Act) as it stood prior to the amendments made in 1958. In the Act, the definitions of the expressions "sale price" and "turnover" in Sections 2 (h) and 2 (i) omitting immaterial portions were as follows:

(3.) These appeals are concerned with the assessments for the quarter ending September 30, 1957, and for the quarter ending December 31, 1957, but it would be sufficient if facts relating to the assessment for the quarter ending September 30, 1957, are given, because apart from figures there is no difference in the relevant facts. For the quarter ending September 30, 1957, the respondent, M/s. Utkal Distributors (P) Ltd., hereinafter referred to as the assessee, claimed to deduct from its gross turnover the sum of Rs. 3874.49 on the ground that it had paid this sum on the purchases made by it as Central Sales Tax. The Sales Tax Officer disallowed the claim. On appeal, the Collector of Sales Tax, Orissa, affirmed the order of the Sales Tax Officer. The Sales Tax Tribunal, Orissa, in second appeal, however, came to the conclusion that there was no justification to disallow the deduction claimed by the appellant. The Tribunal held that the Central Sales Tax realised by the assessee from its customers was not part of the price charged by it, and, therefore, it did not fall within the definitions of 'sale price' and 'taxable turnover'. The Tribunal relied on the fact that the assessee was a controlled stock-holder under the Iron and Steel (Control) Notification, dated Calcutta, the 18th October, 1958, and by virtue of condition No. 4 (ii) of the Notification, the Central Sales Tax paid by the customer was not part of the price. Condition No. 4 (ii) was to this effect: