STATE OF ORISSA Vs. GHEWARCHAND KAMAL KUMAR

JUDGEMENT

(1.) AT the instance of the Revenue, the following question has been REFERRED TO this Court under section 24 (1) of the Orissa Sales Tax Act, 1947 (in short "the Act") by the Orissa Sales Tax Tribunal (in short "the Tribunal" ).

(2.) BACKGROUND facts as indicated by the Tribunal in the statement of facts drawn are as follows : For the assessment year 1981 - 82 M/s. Ghewarchand Kamal Kumar (hereinafter REFERRED TO as "the assessee") filed its returns as required under the Central Sales Tax Act, 1956 (in short "the Central Act") and the Central Sales Tax (Orissa) Rules, 1957 (in short "the Central Rules" ). The Sales Tax Officer being of the course of inter-State trade, treated the gross turnover of Rs. 52,23,001. 60 to be the net turnover for purpose of tax. Since a sum of Rs. 51,94,763. 60 was covered by valid declaration forms, the same was taxed at 4 per cent. , and the balance sum of Rs. 28,248 was subjected to tax at 8 per cent. Accordingly, a tax demand of Rs. 2,10,050 was raised. The petitioner assailed the assessment in appeal before the Assistant Commissioner of Sales Tax, Cuttack. Amongst other grounds it was urged that the assessing officer should have allowed proper deduction in terms of section 8-A of the Central Act. The appellate authority found that the sales memos and sales account did not indicate price included amount of sales tax and therefore, no relief was available to the assessee-appellant. The matter was carried in appeal before the Tribunal. Reference was made under section 8-A by the assessee to contend that turnover as defined in section 2 (j) of the Central Act means the aggregate of the sale prices. As the entire amount of consideration including the sales tax sale prices. As the entire amount of consideration including the sales tax component which the purchaser pays constitutes the sale price of goods, levy of tax on such amount will be a levy on the amount of the tax itself, which is prohibited under the law. The stand of the Revenue on the contrary, was that there Central sales tax is shown to have separately collected and forms part of the aggregate of the sale price, section 8-A has application. Since the assessee failed to prove that the turnover included Central sales tax, there was no scope for interference. The Tribunal came to hold that since the assessee had obtained "c" forms from the purchasing registered dealers against his sales in the course of inter-State trade, it was obvious that the dealer-assessee had charged the concessional rate of tax at 4 per cent. on such sales, although not shown separately in the bills or accounts. It was held that the amount was inclusive of the sales tax component and filing of "c" form amply proved that the sales tax component has been included in the turnover of sales and formed part of the sale price, and the assessee was entitled to the benefit of deduction as provided in section 8-A of the Central Act. The matter was remitted to the assessing officer to redetermine the turnover in the light of the observations made. At the instance of the Revenue, the question as REFERRED TO above has been REFERRED TO this Court.

(3.) FOR resolution of the dispute, it is relevant to refer to section 8-A of the Central Act. This section was inserted with retrospective effect by the Central Sales Tax (Amendment) Act, 1969. The object and reasons for making addition in the Act was stated in the following words :