STATE OF ORISSA Vs. VIJAYALAXMI TIMBER DEPOT

JUDGEMENT

(1.) THIS is an application under section 24 (2) (b) of the Orissa Sales Tax Act, 1947 at the instance of the State of Orissa praying for a direction to the Orissa Sales Tax Tribunal, Cuttack (in brief "the Tribunal") to state the case and make reference on the following questions of law :

(2.) THE opposite party carries on business in timber and logs at Aska Road, Berhampur, in the District of Ganjam. The Sales Tax Officer, Ganjam-I Circle, Berhampur, by order dated December 17, 1987 made an order of assessment under rule 9 of the Central Sales Tax (Orissa) Rules, 1957 for the year 1986-87 raising a demand of Rs. 15,574. The Sales Tax Officer while making the assessment treated the transaction of sales in respect of round logs worth Rs. 1,55,740. 34 to persons having addresses outside the State of Orissa during the relevant period as inter-State sales although the opposite party claimed these sales as intrastate sales on the basis that the sales were effected in its Berhampur godown and tax under the Orissa Sales Tax Act, 1947 (hereinafter referred to as "the Act") was paid on the same. The ground on which such assessment was made is that the addresses of the purchasers being outside the State, there was an implied contract by which the opposite party as seller had moved the goods from the State of Orissa to outside the State. It knew that such purchasers from outside the State in pursuance of the sales would obtain necessary permits from the Forest Department for movement of the logs. As such, he had clear knowledge about the destination of the goods which was outside the State of Orissa. On such reasoning the assessing officer concluded that the aforesaid sales took place in course of inter-State trade. For this conclusion, the assessing officer has taken note of the following two aspects :

(3.) ON the basis of the above findings, the Assistant Commissioner held that there was no movement of the goods as a result of sale by the opposite party to outside the State. As such, these transactions could not be held to be sales to have taken place in course of inter-State trade attracting the provisions of the Central Sales Tax Act, 1956. Accordingly, he allowed the appeal filed by the opposite party and annulled the assessment of tax.