HIRA CEMENT WORKS Vs. STATE OF ORISSA

JUDGEMENT

(1.) ON being moved by an application under section 24 (1) of the Orissa Sales Tax Act, 1947 (in short, "the Act") by M/s. Hira Cement Works (hereinafter referred to as "the dealer"), the Orissa Sales Tax Tribunal (in short, "the Tribunal") has referred the following questions for adjudication :

(2.) THE reference has come to be made under the following background : Dealer is a manufacturer in cement. It is a unit under the Industrial Development Corporation (in short, "idc") a public sector undertaking. It effects sales of cement after manufacture, both inside and outside the State of Orissa. It is registered under the Act, and is assessed to tax by the Sales Tax Officer, Sambalpur II Circle, Sambalpur, Bargarh. IDC is a dealer registered under the Central Sales Tax Act, 1956 (in short "the Central Act") and is assessed at Bhubaneswar. All the units of IDC pay Central sales tax at Bhubaneswar under one registration number. However, all its units including the dealer are registered under the Act and are assessed to tax by the Sales Tax Officer, Sambalpur II Circle, Bargarh, disallowed certain claims of deduction and raised extra demand. Benefit of concessional rate of tax was held inadmissible on the ground that the declaration given to the effect that the goods purchased shall be used in the manufacture or processing of goods for sale (or in mining or in generation or distribution of electricity or any other form of power) has been contravened because 562. 850 M. T. S. of cement worth Rs. 3,95,411. 61 were utilised in construction and maintenance of the dealer's building and other constructions. This according to the assessing officer constituted contravention of fifth proviso to sub-section (1) of section 5 of the Act. 1408. 400 M. T. S. of cement worth Rs. 14,19,812. 33 were supplied to different sister units. These were held not to be branch transfer, but sale as each of the sister units has separate registration number, and the transactions made to them were held to be sales. Though several other contraventions were pointed out and the transactions were subjected to tax, we are not concerned with those aspects because the Assistant Commissioner granted relief in respect of some additions made. Further relief was granted by the Tribunal.

(3.) THE fifth proviso to sub-section (1) of section 5 of the Act has been applied to levy of tax. Same reads as follows :