STATE OF ORISSA Vs. NEW ORISSA PAINTS

JUDGEMENT

(1.) THIS is reference under section 24 (1) of the Orissa Sales Tax Act (hereinafter referred to as the Act), made at the instance of the State of Orissa to answer the following two points of law said to be arising out of Tribunal's order in S. A. No. 650 of 1971-72 :

(2.) THE assessee-opponent (hereinafter described as the assessee) is M/s. New Orissa Paints and Dyes, a registered dealer under Cuttack-I West Circle, that carried on business in paints, colours, varnish and denatured spirit during the year 1967-68. A proceeding under section 12 (8) was initiated by the concerned Assistant Sales Tax Officer against the assessee as the turnover of sales of "denatured spirit" had escaped assessment during the regular assessment. The turnover for the period on this item was found to be Rs. 6,627. 50. Accordingly, a tax demand of Rs. 331. 35 was made. Further, a penalty of Rs. 50 was also imposed under section 12 (8) of the Act. The assessee preferred an appeal before the Assistant Commissioner of Sales Tax, but without success. The first appellate authority did not accept the stand of the assessee that "denatured spirit" is covered under serial No. 12, to which exemption has been allowed. Being aggrieved by that order, the assessee preferred a second appeal before the Sales Tax Tribunal, Orissa. However, the Tribunal by its order dated 14th September, 1972, gave relief to the assessee holding that "denatured spirit" is an item coming under serial No. 12 of the exempted list and, as such, tax-free. Consequently, the 12 (8) assessment was annulled and so too the imposition of the penalty thereunder. The State of Orissa thereafter filed an application under section 24 (1) of the Act for referring the above-quoted two questions said to be of law to this court for answer.

(3.) FOR perspicuity, serial No. 12 may be quoted :