SRI BIHARILAL SHYAMSUNDAR Vs. SALES TAX OFFICER

JUDGEMENT

(1.) THE petitioner is a registered dealer as defined in Orissa Sales Tax Act, 1947 (hereinafter referred to as the Act ). He is engaged in business of purchase and sale of various goods including staple yarn both at Cuttack and Jatni in Puri district. He was assessed to sales tax in respect of 12 quarters (quarter ending 30-6-1959 to 31-3-1962) in respect of sale of staple yarn at the rate of 5 p. c. on the basis of entry No. 67 which subsequently became entry No. 68 in the notification No. 33927 dated 30-12-1967 as amended upto the date of assessment and demand notices were served on the petitioner on 25-2-1963. He admitted his liability to pay and paid sales tax at the rate of 2 p. c. but disputed the legality of the additional rate of 3 p. c. which is the subject-matter of the present writ.

(2.) THE aforesaid Government notification providing for imposition of tax at the rate of 5% on sale of staple yarn was challenged as ultra vires of Section 5 (1) of the act by the petitioner in O. J. Cs. 85 of 1965 and 138 of 1965. O. J, C. No. 85 of 1965 was in respect of the assessments made for the aforesaid 12 quarters in respect of his business at Cuttack and O. J. C. No. 138 of 1965 was in respect of assessments of the self-same quarters in respect of his business at Jatni in Puri district. Both these writ petitions were dismissed in limine on the ground that the petitioner had not exhausted all remedies under the Act.

(3.) THE petitioner appealed to the Supreme Court from the order of the summary dismissal. The Supreme Court set aside the orders of summary dismissal remanded the cases to the High Court for disposal according to law on the ground that the question of ultra vires raised by the petitioner being foreign to the jurisdiction of the sales tax authorities created under the Act could not be decided by them. This remand order was passed on 8-11-1965.