UNA SUBBA RAO Vs. STATE OF ORISSA

JUDGEMENT

(1.) THE petitioner is a dealer in sugar-candy and allied articles having his place of business in the town of Berhampur in the District of Ganjam within the State of Orissa. According to him, the Sales Tax Officer (opposite party No. 2), Ganjam I Circle, Berhampur, tried to collect tax on sugar-candy treating the same as an article other than sugar and levied tax illegally on the said item. By way of amendment under the powers conferred under section 6 of the Orissa Sales Tax Act (hereinafter called the "act") the State Government published a list of articles in the Orissa Gazette (Extraordinary Gazette dated 23rd April, 1976) inter alia stating in entry No. 37 (in List A, i. e. , List of goods exempted from Orissa sales tax) "sugar" as defined in item No. 1 of the First Schedule to the Central Excises and Salt Act, 1944, was exempted from Orissa sales tax. In another notification issued by the State Government in item No. 78 of List C, i. e. , List of goods subject to sales tax, "sugar-candy" was notified as a goods taxable at the rate of 4 per cent. This was effective from 1st May, 1976. Subsequently by another notification dated 29th December, 1977, published in the Orissa Gazette (Extraordinary) this item was included as entry No. 86 of the said list, and this was effective for the period from 1st January, 1978, to 31st March, 1982, which is relevant for the purpose of this case. The petitioner being confused by the aforesaid misleading entries, made queries to the Commissioner of Sales Tax as to whether "sugar-candy" is a taxable or tax-free goods as "sugar" includes within its ambit all forms of sugar, that is to say, sugar of any shape or texture, colour or density and by whatever name it is called. Copy of that letter is annexed to this petition as annexure 1. As the petitioner did not receive any reply, he approached this Court for injuncting opposite parties from realising sales tax on "sugar-candy". In the meantime opposite party No. 2 has assessed the petitioner and imposed sales tax at the rate of 4 per cent on sugar-candy, for the assessment years 1978-79 and 1979-80 vide annexures 2 and 3 respectively. The petitioner amended the writ petition and has also prayed for quashing annexures 2 and 3. The petitioner's contention is that in spite of the decision of this Court in the case of State of Orissa v. Satyabadi Sahu & Sons reported in [1982] 51 STC 75 relying on the decision of the Supreme Court reported in [1967] 19 STC 24 (SC) (State of Gujarat v. Sakarwala Brothers) which held that misri (sugar-candy) comes within the meaning of sugar and, therefore, is a tax-free article comming within entry No. 34 of the list of exempted goods issued under the Orissa sales tax, opposite party No. 2 has illegally levied tax on him.

(2.) OPPOSITE parties Nos. 1 and 2, i. e. , the State of Orissa represented by the Commissioner of Sales Tax, Orissa, and the Sales Tax Officer, Ganjam I Circle, Berhampur, respectively, in their counter have taken the plea that all "goods" are taxable if it comes within the definition of section 2 (d) of the Act, and under section 5 (1) of the Act the State Government has a right to prescribe the rate of tax for different goods depending on various factors including the factor of consumption and other economic factors. In short, after examining the social and economic conditions the State Government has prescribed a rate with regard to different types of goods. In the present context, "sugar" and "sugar-candy" have been made clearly two different goods and the former has been declared tax-free and the latter has been made taxable at the rate of 4 per cent. It has been further contended that as alternative remedy is available under the statute, the writ petition under article 226 of the Constitution is not competent, maintainable and should be dismissed.

(3.) IN the decision reported in [1982] 51 STC 75 (State of Orissa v. Satyabadi Sahu and Sons) this Court (which followed the decision of the Supreme Court reported in [1967] 19 STC 24 (SC) (State of Gujarat v. Sakarwala Brothers) held :