STATE OF ORISSA Vs. BHARAT STORE

JUDGEMENT

(1.) THIS is an application by the Revenue under section 24 (2) (b) of the Orissa Sales Tax Act, 1947, requiring the Tribunal to refer to the High Court for its opinion on the following question of law.

(2.) THE facts in brief are that the petitioner is a dealer of paints, varnish, turpentine oil, denatured spirit and the like products. In response to a notice under section 12 (4) of the Orissa Sales Tax Act, 1947 (in short, "the Act"), the proprietor had produced purchase accounts for the period 1990-91. Admittedly no sale or stock account was maintained by him and on the basis of purchase account he paid tax by adding 5 per cent margin of profit over the purchase. In the circumstances, best judgment assessment was made by the assessing officer and gross turnover was estimated at Rs. 5,71,225. 25 and taxable turnover was determined at Rs. 3,04,414. 04. It was found that the dealer had paid tax at 8 per cent on sale turnover of denatured spirit for the period from April 1, 1990 to June 30, 1990 and at 12 per cent for the period July 1, 1990 to March 31, 1991. In the opinion of the assessing officer tax was paid at a lesser rate and accordingly he levied tax at 12 per cent for the period from April 1, 1990 to June 30, 1990 and 16 per cent from July 1, 1990 to March 31, 1991. Being aggrieved, the petitioner preferred an appeal in which the levy of tax was upheld which led to filing of a second appeal by the dealer before the Tribunal. The Tribunal being of the opinion that as denatured spirit was not specified under serial No. 66 of the taxable Schedule as it stood then it was to be treated as an unspecified goods and has to be taxed as such under the residuary entry. Accordingly, the levy of tax at 12 per cent and at 16 per cent for different period under Sl. No. 66 was set aside. Aggrieved therewith the Revenue moved an application under section 24 (1) of the Act requiring the Tribunal to refer a question to the High Court for its opinion. Rejection of the said application has given rise to the present proceedings.

(3.) TO begin with it may be stated that "denatured spirit" is not an item included in serial No. 66 of the taxable Schedule nor is it found included in any other entry. However, it appears that the assessing officer as also the first appellate forum included denatured spirit in the said entry probably because of the decision of this Court in State of Orissa v. New Orissa Paints and Dyes [1976] 37 STC 475 in which it was observed that denatured spirit in ordinary parlance is a commodity used for the purpose of varnishing, painting or colouring and in that analogy, it is to be placed on the footing of articles like paints, colours and varnish. That, however, was a matter in which the question for determination was whether denatured spirit was liquor and as such tax-free and the finding was that it was not liquor and as such denatured spirit was not tax-free. It appears that the observations of the court in the said judgment have been understood out of context.