HIMANSU MAJUMDAR Vs. STATE OF ORISSA

JUDGEMENT

(1.) THIS appeal under section 23 (4) (c) (i) of the Orissa Sales Tax Act of 1947, hereinafter referred to as the "act", is directed against the order passed by the Commissioner of Sales Tax in exercise of his powers under section 23 (4) (a) of the Act read with rule 80 of the Rules made under the Act.

(2.) THE appellant is a registered dealer under the Act and carries on business in the Steel City of Rourkela. He deals in sewing machines and spares. For the year ending on 31st March, 1972, the dealer was assessed to tax by the Sales Tax Officer, Rourkela Circle. While computing tax, the assessing officer applied the rate of 5 per cent on the sales turnover of sewing machines and spares. The Commissioner entertained a suo motu revision and by his order dated 28th June, 1976, revised the assessment relating to the sales turnover of sewing machines and spares amounting to Rs. 1,20,866. 36. He found that the turnover of such goods between 1st April, 1971, and 31st December, 1971, was Rs. 25,183. 68 and between 1st January, 1972, and 31st March, 1972, was Rs. 34,702. 65. As against the flat rate of 5 per cent applied by the Sales Tax Officer, the Commissioner assessed the first amount at 7 per cent and the second amount at 8 per cent and directed appropriate demands to be raised. This decision of the Commissioner is assailed in appeal.

(3.) THE learned standing counsel contended before us that the Commissioner of Sales Tax had no authority to bind the department by his opinion, and if on a true analysis it appears that entry 60 would cover the transactions, merely because the gazette notification stated otherwise, the assessee could not succeed. As we have pointed out, the gazette notification is not of the Commissioner of Sales Tax though the report emanated from the office of the Commissioner. The report was published under the authority of the Chief Secretary, and it must be taken that the Government approved of what was stated therein. It must, therefore, follow that the State Government accepted the position that the consequence of deletion of entry 47 from the 1957 notification was that the sales turnover of sewing machines and spare parts, with deletion of entry 47, became taxable at the general rate and not under entry 60. The fact that from 1974 onwards the sales turnover of such goods has been made exigible to sales tax at an enhanced rate of 10 per cent is indeed not a very material feature to take notice of in resolving the present dispute. The pertinent aspect for examination is whether prior to 1974 - and we are concerned with such a period - the rate of tax was the general rate of 5 per cent or the enhanced rate under the 1957 notification. Entries 47 and 60 in the 1957 notification co-existed. The State Government did not intend to include sewing machines and spares thereof in entry 60. Those were shown as separate class of goods. The Government deleted entry 47 without clearly indicating that entry 60 would cover what was herebefore entry 47. Added to this, came the gazette publication of 17th November, 1961. The legal position is well-settled that if there be any ambiguity in the matter of taxation it must be resolved in favour of the assessee. This is not a case where the assessee had collected tax at the higher rate from his buyers. The State Government must be estopped from raising the contention as advanced by the learned standing counsel in the facts and circumstances referred to above. Support is available for the stand of the assessee from the fact that in 1974 the State Government was not satisfied by specifying in entry 61 the description of goods to be machineries only. When rate of 10 per cent was prescribed, it clearly indicated sewing machines and component parts.