STATE OF ORISSA Vs. LAXMI INDUSTRIES

JUDGEMENT

(1.) THIS is a reference under section 24 (1) of the Orissa Sales Tax Act, 1947 (hereinafter referred to as "the Act"), at the instance of the Revenue on the following question :

(2.) DURING years 1978-79 and 1979-80 the dealer was manufacturing and selling sugar-candy amongst other articles. The Sales Tax Officer found that the dealer has not paid tax on the turnover representing sale price of sugar-candy and imposed tax on such turnover. The dealer preferred appeals challenging that sugar-candy is not taxable, since it is same as sugar which is exempted from tax in the notification under section 6 of the Act. It relied upon a decision reported in [1982] 51 STC 75 (Orissa) (State of Orissa v. Satyabadi Sahu and Sons), where it has been held that sugar-candy being same as sugar, is tax-free. The Assistant Commissioner did not accept the contention of the dealer and dismissed the appeals. In second appeals the Tribunal allowed both the appeals. Aggrieved by the aforesaid decisions of the Tribunal, applications for reference were filed on the basis of which statement of the cases have been made on the question extracted earlier.

(3.) SUGAR ordinarily would include sugar-candy. Sugar is the genus and sugar-candy is the specie. When sugar-candy is not specifically dealt with as a separate commercial commodity, for the purpose of taxation it would come within category of sugar. Where, however, sugar-candy is treated as a different commercial commodity than sugar for the purpose of taxation a taxing authority cannot treat sugar-candy as sugar. In the decision reported in [1982] 51 STC 75 (Orissa) (State of Orissa v. Satyabadi Sahu and Sons) Sugar-candy is not held to have been a separated place in the notification under section 5 of the Act. Previously, sugar was the only category of goods which was tax-free in serial No. 37 of the notification under section 6 of the Act. There was no serial with regard to sugar-candy. In notification dated April 23, 1976, under section 6 of the Act which came into force from May 1, 1976, sugar was tax-free commodity in serial No. 37 and in notification dated April 23, 1976, under section 5 of the Act which came into force from May 1, 1976, the same day sugar-candy was mentioned in serial No. 78 as taxable at four per cent. Intention of notifying authority is thus clear and the same was not the situation in [1982] 51 STC 75 (Orissa) (State of Orissa v. Satyabadi Sahu and Sons) or the decision relied upon in the said decision. Therefore, with effect from May 1, 1976 sugar-candy is taxable and would not be tax-free as sugar.