BAVCHAND AND CO Vs. STATE OF ORISSA

JUDGEMENT

(1.) ON an application of the assessee under section 24 (1) of the Orissa Sales Tax Act of 1947 (hereinafter to be referred to as the Act), the Member, Sales Tax Tribunal, has stated this case and referred the following question for opinion of the court :

(2.) THE assessee, a registered dealer under the Act, carried on business in bullion, gold and silver ornaments and silver articles. For the period 1970-71, the Sales Tax Officer rejected the accounts of the assessee, enhanced the turnover and overruled the contention of the assessee that the turnover was liable to tax at the rate of 5 per cent and adopted the rate of 7 per cent. The assessee's first appeal was dismissed by the Assistant Commissioner. The Tribunal in second appeal also affirmed the order of assessment. The question arising in the case was highlighted by the Tribunal by saying :

(3.) THE assessee's counsel, on the other hand, contends that under section 5 (1) of the Act, the general rate of tax has been indicated and power has been conferred upon the Government to prescribe a lower or higher rate by notification. During the period between 1st April, 1966, and 14th May, 1970, serial Nos. 1 and 27 co-existed. In serial No. 27, the exclusion was confined to what was hitherto covered by the deleted serial No. 3-F and no reference was made to serial No. 1. Therefore, the ambit of serial No. 27 did not take within it what was covered by serial No. 1. When with effect from 15th May, 1970, serial No. 1 was omitted, the concessional rate of two per cent hitherto provided was withdrawn and the goods described under the deleted serial No. 1 reverted to the general category for which the rate of tax is provided under section 5 (1) of the Act. In order to make the goods covered by the deleted serial No. 1 liable to a higher rate of tax, a further notification was necessary and, in the absence of such a notification to be made in exercise of the powers under the proviso to sub-section (1) of section 5, demand of tax at the higher rate of seven per cent on the basis of serial No. 27 is not justified. For the period between 15th November, 1958, and 31st March, 1966, serial Nos. 1 and 3-F existed together in the notification. The rate of tax for the goods under serial No. 1 was one per cent and ornaments of personal wear covered by serial No. 3-F was two per cent. As already noticed, in serial No. 27, the words "other than those falling under serial No. 3-F" had been inserted with effect from 15th November, 1958. It is, therefore, clear that when serial Nos. 3-F and 27 co-existed, with a view to providing a lower rate of tax for the items of goods covered by serial No. 3-F exclusion was provided from the ambit of serial No. 27. Serial No. 3-F itself was deleted with effect from 1st April, 1966, yet the exclusion with reference to serial No. 3-F continued in serial No. 27 until 15th May, 1970. With the deletion of serial No. 3-F from serial No. 27, the restriction imposed for serial No. 27 stood withdrawn and all articles and wares made of gold, silver and species became taxable at seven per cent. No fault can be found with the process of this reasoning. As already stated serial Nos. 1 and 3-F remained together between 15th November, 1958, and 31st March, 1966, while serial Nos. 1 and 27 co-existed from 1st January, 1958, till 15th May, 1970, when serial No. 1 was deleted. Serial No. 27 is expressed in terms wide and general and all articles made of gold, silver and species would be covered by the entry. The proviso under section 5 (1) authorises the State Government to notify rates in respect of specific goods or class of goods. Serial No. 27 refers to a class of goods, namely, all articles and wares made of gold and silver or of species. What was hitherto covered under serial No. 1 would certainly come and always came within the ambit of serial No. 27 though two separate serials had co-existed. Undoubtedly, what came under serial No. 3-F was a well-defined class of goods, while serial No. 1 referred to goods which would have come under serial No. 27. The learned standing counsel contends that this mistake has been noticed and, therefore, from 15th May, 1970, serial No. 1 has been deleted. Now serial No. 27 is the only entry in the field with effect from 15th May, 1970. The goods in question have been found to come within the ambit of serial No. 27. Admittedly, the goods which have been taxed are articles of gold, silver or of species. Serial No. 27 covers these articles. We do not think, in these circumstances, there is force in the assessee's contention that with the deletion of serial No. 1, for the goods covered by that serial the general rate would apply and the taxing department is not entitled to fall upon serial No. 27 to tax the goods at a higher rate, in the absence of a fresh notification providing for a higher rate of tax.