SALES TAX TRIBUNAL Vs. S LAL AND CO

JUDGEMENT

(1.) THE following question of law has been referred to this Court, by the Member, Sales Tax Tribunal, Orissa, under section 24(1) of the Orissa Sales Tax Act.

(2.) THE facts which are unchallenged are these. Messrs Tullock and Co., of Barbil are a firm of registered dealers selling chromium ore in Orissa. Messrs S. Lal and Co., are also another firm of registered dealers in Orissa holding registration certificate No. 1335-BA. In their certificate it was specified that "minerals" were one of the goods which the said firm was entitled to buy in Orissa, free of sales tax, for the purpose of resale in Orissa (see Form III). It is admitted that in the certificate no maximum limit was mentioned for the purchase of minerals by this firm. For the period in question Messrs S. Lal and Co. purchased chromium ore from Messrs Tullock and Co., without paying any sales tax on it, in view of the exemption provided in section 5(2)(a)(ii) of the Act. It was further admitted that the chromium ore so purchased was not resold in Orissa, but was sold in Calcutta by Messrs S. Lal and Co. Thereupon, the Sales Tax Officer assessed Messrs S. Lal and Co., to sales tax in respect of those purchases relying on the aforesaid proviso to sub-clause (ii) of clause (a) of sub-section (2) of section 5. On second appeal, the learned Member, Sales Tax Tribunal, gave an ingenious construction to the provisions of section 5(2)(a)(ii) and held that where the purchases were made by Messrs S. Lal and Co., from Messrs Tullock and Co. for the purpose of resale outside Orissa, the said proviso to sub-clause (ii) of clause (a) of sub-section (2) of section 5 was not attracted even though such purchases were made tax-free.

(3.) ON the fact admitted and in view of the aforesaid decisions, the liability of Messrs S. Lal and Co. to pay sales tax in respect of those transactions of purchase is beyond doubt. "Minerals" were specified in the certificate of registration of Messrs S. Lal and Co. as being intended for resale in Orissa, but without any maximum limit being fixed in that certificate. That firm purchased chromium ore from another registered dealer, namely, Messrs Tullock and Co. who did not collect any sales tax from them on the strength of the entry in the aforesaid certificate. The ore so purchased was, however, admittedly sold outside Orissa. Hence, it is clear that the goods were used by Messrs S. Lal and Co., "for purposes other than those specified in the certificate of registration" and they are according bound to pay sales tax by virtue of the aforesaid proviso to sub-clause (ii) of clause (a) of sub-section (2) of section 5.