M M AND CO Vs. STATE OF ORISSA

JUDGEMENT

(1.) AT what rate sales tax is payable on the sale of "hand pump" ? This is the core question that arises for consideration in this writ petition.

(2.) THE petitioner is a partnership firm and is a dealer under the Orissa Sales Tax Act, 1947 (hereinafter referred to as "the Act" ). It carries on business of manufacturing and selling of hand pumps and spare parts thereof. In response to the notice issued under section 12 (4) of the Act for the assessment year 1991-92, the petitioner appeared before the assessing officer and produced necessary documents with reference to the returns it filed earlier. The assessing officer noticed that it had sold water lifting hand pumps worth Rs. 52,52,724 to a registered dealer - M/s. Orissa Small Industries Corporation (Opposite party No. 6) on the strength of declaration in form XXXIV. Subsequently, on February 12, 1992 the petitioner filed a revised return disclosing the above sales to be taxable at the rate of 12 per cent but did not pay any tax thereon. The assessing officer treating the "water lifting hand pump" to be an item coming under the category of "machinery" as per entry No. 70 of the taxable list, levied tax at the rate of 16 per cent. This resulted in extra demand against the petitioner under the Act.

(3.) IN the premises stated above, the petitioner has prayed for quashing of the impugned assessment order dated August 26, 1992 (annexure 8), first appellate order dated February 7, 1994 (annexure 9) and the second appellate order dated March 16, 1996 (annexure 10 ). Its further prayer is that "water lifting pump sets" should be charged to tax at lower rate than being charged at 12 per cent and to direct the Orissa Small Industries Corporation (opposite party No. 6) for refund of the tax as is relatable to the turnover of Rs. 52,52,724 and pay the taxes to it for effecting payment to the Government treasury towards the taxes as are due on such sale.