STATE OF ORISSA Vs. DUNLOP INDIA LTD

JUDGEMENT

(1.) ON applications made by the State of Orissa under section 24 (1) of the Orissa Sales Tax Act, 1947 (hereinafter referred to as "the Act"), the Orissa Sales Tax Tribunal has stated these cases and referred the following common question for opinion of the court :

(2.) THE periods of assessment relate to 1981-82 and 1982-83. The opposite party is a wholesaler of automobile tyres, tubes and flaps and is having its business at Cantonment Road, Cuttack. Assessments under section 12 (4) of the Act had been completed. The Accountant-General, Orissa, in course of audit took objection saying that flap being a component part of motor vehicle, should have been taxed at 13 per cent; but the opposite party had collected and paid tax at 10 per cent on sale of flaps. On the basis of the said objection, the Sales Tax Officer, Cuttack-I, Central Circle, Cuttack, reopened the assessment proceedings under section 12 (8) of the Act and by taking the view that the flap is a component part of the motor vehicle raised extra demand of Rs. 16,848 and Rs. 12,331 for the years 1981-82 and 1982-83, respectively. The opposite party carried two appeals, i. e. , Sales Tax Appeals Nos. 1639 and 1640 of 1986-87 against the orders of assessment made under section 12 (8) of the Act and the Assistant Commissioner of Sales Tax, Orissa, allowed the appeals and reduced the assessment by holding that flap is a component part of tyres and tubes only and as such it is liable to be taxed at 10 per cent and 12 per cent as it stood then for the relevant periods. Being aggrieved by the common appellate order passed in the aforesaid two appeals, the petitioner filed two Second Appeals Nos. 2117 and 2118/87-88. Cross-objections were filed by the opposite party. The Sales Tax Tribunal by the common order dated December 24, 1988, dismissed the appeals filed by the petitioner and allowed the cross-objection filed by the opposite party and has held that flap is neither component to motor vehicle nor accessory to tyres and tubes and the rate of tax of flap having not been specified in the rate chart, the same would come under the category of unspecified goods taxable at 7 per cent and 8 per cent as it stood then for both the years. Undaunted by the dismissal of the appeals, the petitioner made applications under section 24 (1) of the Act and the Full Bench of the Tribunal by majority vide Reference Case Nos. 10 and 11 of 1989 allowed the reference applications and that is how these matters have come.

(3.) WE would accordingly answer the question referred to us by saying that on the facts and in the circumstances of the case, the Tribunal was right in holding that the rate of tax on flap having not been specified in the rate chart, it would come under the category of unspecified goods taxable at the rate of 7 per cent and 8 per cent as it stood then for both the years in question. However, we find from the records that there is material to show that the assessees collected tax at the rate of 10 per cent in respect of the concerned goods and has deposited the same. If that be so, notwithstanding our conclusion that the residual rate is applicable, the assessee shall not be permitted to take refund of the amount which may be found due by application of the residual rate. This aspect shall be indicated by the Tribunal when it takes up the matter for disposal in terms of section 24 (5) of the Act. There shall be no, order as to costs. Reference answered in the affirmative.