STATE OF ORISSA Vs. KAMESWARI ASSOCIATED RICE MILLS

JUDGEMENT

(1.) UNDER orders of the court, made on an application of the State under section 24 (2) (b) of the Orissa Sales Tax Act (hereinafter referred to as the "act"), the Member, Sales Tax Tribunal, has stated the case and referred the following question for opinion of the court :

(2.) THE assessee - a rice mill - in terms of the provisions of the Orissa Rice Procurement (Levy) Order, 1964 (hereinafter referred to as the "levy Order"), made certain sales to the Government of India and effected supplies of the same to different destinations as directed by the appropriate authority during the periods 1964-65 and 1965-66. In assessment proceedings under the Central Sales Tax Act, the assessee took the stand that the transactions were not "sales". The assessee's contention was rejected and estimates were made both on the price of rice as also the gunny bags at the prescribed rates. In the first appeal, the assessee reiterated its contention that under the Levy Order, there cannot be any sale. That contention was negatived and the assessments were upheld. Before the Tribunal, reliance was placed on a decision of this court in the case of Bhagirath Agarwal and Brothers v. Sales Tax Officer, Ganjam I Circle [see page 566 infra; (1971) 2 C. W. R. 795], where it was held that supplies under Levy Orders cannot be treated as sales. The Tribunal accordingly annulled the assessments.

(3.) THE question was examined by a Bench of this court in the case of Union of India v. Sales Tax Officer, Balasore [see page 557 supra; (1971) 1 C. W. R. 693]. The learned Chief Justice, who delivered the judgment of the Division Bench, relying upon the decision in the case of Chittar Mal Narain Das v. Commissioner of Sales Tax [[1970] 26 S. T. C. 344 (S. C.)], held that fifty per cent of the rice procured under the Levy Order which constituted compulsory acquisition would not be exigible to tax. The same question came up for examination before this court in the case of Bhagirath Agarwal and Brothers v. Sales Tax Officer, Ganjam I Circle [see page 566 infra; (1971) 2 C. W. R. 795] and the same view was reiterated. In fact, the Tribunal has relied upon this decision for holding in favour of the assessee. In Narain Das's case [[1970] 26 S. T. C. 344 (S. C.)], a similar provision under the U. P. Wheat Procurement (Levy) Order, 1959, was being examined. A Bench of two learned Judges stated the legal position thus :