SEETAL AUTOMOBILES Vs. SALES TAX OFFICER

JUDGEMENT

(1.) M /s. Seetal Automobile, the petitioner herein has sought to challenge the jurisdiction of the opposite party -Sales Tax Officer, Bhubaneswar -II Circle in issuing notice for levy of penalty under Section 9 -B(3)(a)(ii) of the Orissa Sales Tax Act, 1947 (in short, the 'OST Act') for the periods 2000 -01, 2001 -02 and 2002 -03 in these three writ applications respectively. Since the challenge in these writ applications are to similar notices for the aforesaid periods and the grounds raised are also same, these writ applications are taken up together for disposal through a common judgment.

(2.) SRI Paikray, learned Counsel appearing for the petitioner submitted that the impugned notices under Annexure -4 are wholly without jurisdiction. He submitted that the impugned notices are for the purpose of levy of penalty on the allegation of non -deposit of excess tax and surcharge under the O.S.T. Act allegedly collected by the petitioner -farm, which is strenuously denied by the petitioner.

(3.) LEARNED Counsel for the petitioner submitted that the leviability of the Entry Tax was made in accordance with Section 3(3) of the OET Act. He submitted that the petitioner is entitled to the benefit of reduction of the tax liability in consonance with Section 4 of the OET Act and since the petitioner had paid Entry Tax at the point of entry of the vehicles into the State of Orissa, in terms of Section 4(1) of the Entry Tax Act, the Sales Tax liability of the petitioner under the OST Act, stood reduced to the extent of tax paid under the Entry Tax Act. Such reduction of liability is prescribed under Sub -section (2) of Section 4 of the OET Act and the only pre -condition for allowing such reduction of OST Act was that Entry Tax paid and tax payable under the Sales Tax Act was required to be shown separately in the cash memo or bill or invoice. Learned Counsel also placed reliance on Rule -3 of the OET Rules to establish that, goods brought into the State for the purpose of sale by the petitioner was exigible entry tax @ 12% (which was the same as notified by the Government under the OST Act for such goods). Learned Counsel further placed reliance on Rule -18 of the OET Rules which provide for 'set off of entry tax against sales tax'. The same along with the statutory illustration therein are extracted hereunder: Rule 18 - Set off of Entry Tax against Sales Tax: (1) When the importer of a motor vehicle liable to pay tax under Sub -section (2) of Section 3 of this Act being a dealer in motor vehicles becomes liable to pay tax under the Sales Tax Act by virtue of sale of such motor vehicle, his tax liability under the Sales Tax Act shall be reduced to the extent of the tax paid under these rules. Illustration: Assuming Entry Tax Rate and Sales Tax Rate to be 10% (1) Purchase value of Motor vehicle Rs. 2,00,000/ -(2) Entry tax payable @ 10% Rs. 20,000/ - - - - - - - - - - - - - - - - - -Total: Rs. 2,20,000/ -(3) Sales Price of the Motor Vehicle Rs. 2,20,000/ -(4) (a) Sales Tax due @ 10% Rs. 22,000/ -Deducted EntryTax Paid Rs. 20,000/ -Sales Tax payable Rs. 2,000/ - - - - - - - - - - - - - - - - - -Total: Rs. 2,22,000/ -(2) When an importer of goods specified in Part -Ill of the Schedule to the Act other than motor vehicle, liable to pay tax under this Act is also a dealer liable to pay tax under the Sales Tax Act, the sale tax payable on the sale of goods shall be reduced to the extent of entry tax paid in the same manner as illustrated under the Sub -rule (1) The details of the total inter -state purchase, purchase of the vehicles, vehicles -spares and accessories and payment of entry tax for the three relevant years are quoted hereunder: - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -Assess Total inter -state Purchase of Purchase of Entry tax paidment purchase vehicles spares and on theyears accessories purchase ofvehicles@ 12% - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -2000 -01 Rs. 16,46,74,262.89 Rs. 11,59,30,588.66 Rs. 26,59,579.38 Rs. 1,39,11,670.30 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -2001 -02 Rs. 12,43,44,878.73 Rs. 12,22,15,344.81 Rs. 21,29,533.92 Rs. 1,46,65,842.05 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -2002 -03 Rs. 14,08,69,092.35 Rs. 13,84,04,053.21 Rs. 24,65,039.14 Rs. 1,66,08,488.00 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Learned Counsel further submitted that it computed its sales tax liability and submitted returns pertaining to the gross sale of the vehicles in the following manner: - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -Assess - Sales of gross Sales Tax due Set off of entry Balance taxment value of thereon tax pay payable/paidYears vehicles - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -2000 -01 Rs. 12,87,35,376.73 Rs. 1,54,48,245.09 Rs. 1,39,14,908.00 Rs. 15,33,334.00 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -2001 -02 Rs. 13,09,16,495.06 Rs. 1,57,09,977.64 Rs. 1,46,68,267.00 Rs. 10.41.712.00 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -2002 -03 Rs. 15,04,86,067.07 Rs. 1,80,58,328.00 Rs. 1,66,08,488.00 Rs. 14,49,840.00 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - It is also stated by the learned Counsel for the petitioner that the surcharge payable under Section 5 -A of the O.S.T. Act on the sales tax payable after setting off entry tax paid was also computed and deposited by the petitioner.