J K PAPER LTD Vs. STATE OF ORISSA

JUDGEMENT

(1.) IN these matters hearing was closed on 12.8.2010 and the following order was passed:-

(2.) ACCORDINGLY, we note the reasons in support of the aforesaid order as hereunder:

(3.) THE scope of our enquiry and determination herein revolvesround the question of adjudicating as to the scope and power vested inState Government under clause-(m) of sub-section-(8) of Section 20 of theOVAT Act. In terms thereof it is clear that the Government is authorized tonotify "any other case" as may be deemed appropriate in terms of sub-section (8) of Section 20 of the OVAT Act. 14.1 At the outset on an analysis of the circumstances contained insub-section (8) of Section 20 it is clear that whereas clause-(a) deals withthe situation where the taxable goods purchased by the registered dealersis not re-sold in course of his business but given away as a free sample orgift. In other words the case in which there is no further resale of thepurchased goods consequently there is no scope of giving a right to thesituation for any further levy thereon. Since no levy of VAT is permissiblein the event of a free sample or a gift, the benefit of input tax credit forinter State purchase by such a dealer ought not to be claimed.14.2 So far as clause (b) of sub-Section (8) of Section 20 isconcerned, since the registered dealer contemplated therein had opted forpayment of 'turnover tax' under Section 16(composite tax), obviouslythereby no question of claiming of credit input tax can arise. Underclause-(c) where a registered dealer purchases capital goods, input taxcredit thereon is permissible under sub-section (5) of Section 20 to theextent and in the manner stipulated therein. In so far as clause-(d) isconcerned, the same refers to purchases by a registered dealer from outside the State against the tax paid in any other State and obviouslythereby since no tax was paid within the State of Orissa, no question ofclaim for input tax credit for such tax can obviously be permitted. So faras clause-(e) is concerned, if a registered dealer has stock of goodsremaining unsold at the time of closure of his business, clearly therebysince the event of further sale has not taken place, no question of inputtax credit can arise. So far as clause-(f) is concerned, if goods arepurchased by a registered dealer and the same is stolen, damaged or destroyed, obviously such goods are not more available for resale and inabsence of such goods no claim of input tax credit could be permissible. Inso far as clause-(g) is concerned, where a registered dealer is not in aposition to provide the tax invoice, no question of grant of input tax creditis also permissible. So far as clause- (h) is concerned, a registered dealer,who may have purchased goods from a registered dealer, but if suchselling dealer registration certificate has been suspended the purchasingdealer can have no right to claim input tax credit. In so far as clauses- (i) (j) are concerned, the goods which we are presently concerned, i.e., Coaland Furnace oil are admittedly not specified in the Schedule- A or C. In sofar clause-(k) is concerned, where the finished products of the registereddealer is exempted from tax either in whole or in part under the Act, noquestion of input tax credit on inputs or capital goods other than thosecovered under Schedules- A, C or D would obviously available in view ofthe exemption of tax of the final products either whole or in part. In so faras clause- (l) is concerned, if a registered dealer executes works contractand has exercised his option under sub-section (3) of Section-11 to paytax by way of composition as prescribed under section 11(c) in view ofexercise of such option no question of availing input tax credit would arise.We now come to clause-(m) of sub-section-(8) which contemplates andvests power in Government to make notification specifying any othergoods, this is the power which the State has resorted to in passing theimpugned notification.