SHIWDUTTRAY BHOLANATH Vs. STATE OF ORISSA

JUDGEMENT

(1.) THIS is a reference under section 24 (1) of the Orissa Sales Tax Act, 1947 (hereinafter referred to as "the Act") on a statement of case made to this Court by the Sales Tax Tribunal on the following question of law :

(2.) IN respect of the year 1978-79 the dealer was carrying on business of purchase and sale of goods including black gram liable to purchase tax under section 3b of the Act for which he was registered under the Act. Cultivators brought black gram worth Rs. 14,959. 92 which passed through Atharnala check gate established by the State Government, to sell them to the dealer. On demand at the check gate they paid amounts and obtained receipts. While selling black gram, the dealer claimed that in respect of the very goods purchase tax having been paid by the cultivators, he is not liable to pay further purchase tax in view of section 8 (a) of the Act. The Tribunal held that the dealer is the first purchaser and is liable to pay the tax even though tax was collected from the cultivators at the check gate. On application of the dealer, the Sales Tax Tribunal has made the reference on the question extracted earlier.

(3.) TAX under the Act can be levied and collected from the dealer after the taxing event. In case of goods liable to purchase tax, liability is accrued on purchase only. There is no scope for levy and collection of tax by the State Government before purchase is completed and without following the procedure provided under the Act since no tax can be levied or collected without authority of law as provided in article 265 of the Constitution. If there was no purchase of goods in the State at the time of or before the goods pass through a check-post, the taxing event has not happened and the State Government has no power to collect tax. Section 16-A of the Act read with rule 94 (4) (b) however, authorised for collection of an amount from the owner or the person carrying the goods on behalf of the owner, in case, on interception at the check gate, it is found that the required documents are not in accordance with the rules. This amount is collected to protect evasion of tax. The State Government never intended that goods would be taxed in respect of the same transaction twice. Accordingly, it provided in rule 36, last proviso that a dealer can adjust the amount paid at the check gate with the admitted tax payable by him before filing return. Since the main object is to check evasion of tax, the dealer who seeks to adjust the amount paid by him at the check-post is to obtain a certificate from the Sales Tax Officer to that effect. There is no prescribed form for that purpose. As has been held in [1987] 67 STC 458 (Orissa); (1987) 1 OLR 182 (State of Orissa v. Sardar Automobiles), receipt obtained from the check gate officer who is a Sales Tax Officer, shall be treated as the certificate and on that basis the dealer is entitled to adjust the amount as provided in rule 36, last proviso.