1973 (5) TMI 77 - HC - VAT and Sales Tax

Summary

Issues:
1. Contravention of proviso to section 5(2)(A)(a)(ii) of the Orissa Sales Tax Act.
2. Double taxation under section 8 of the Orissa Sales Tax Act.

Analysis:

Issue 1: Contravention of proviso to section 5(2)(A)(a)(ii) of the Orissa Sales Tax Act:
The case involved a registered dealer engaged in printing business, where the dealer sometimes supplied paper and other times used paper supplied by customers. The assessing officer added a sum to the taxable turnover, alleging a violation of the proviso to section 5(2)(A)(a)(ii) of the Act. The dealer contended that there was no violation as the paper was sold as paper, not as a different commodity. The Tribunal found that the burden to prove the violation lay on the revenue, and there was no evidence to establish such a violation. The dealer maintained an order-book clearly distinguishing transactions where paper was supplied by customers or the dealer, which supported the claim of no violation. The court held that the revenue failed to establish any contravention of the proviso, absolving the dealer from liability to pay tax on the value of the paper sold.

Issue 2: Double taxation under section 8 of the Orissa Sales Tax Act:
The second issue regarding double taxation under section 8 of the Act did not arise for determination due to the finding in favor of the dealer on the first issue. The court declined to address the second question as it was rendered moot by the conclusion on the primary issue. The reference was disposed of against the department, with no order as to costs.

In conclusion, the court held that the revenue failed to prove any contravention of the proviso to section 5(2)(A)(a)(ii) of the Orissa Sales Tax Act, thereby relieving the dealer from liability to pay tax on the value of the paper sold. The issue of double taxation was not addressed due to the outcome of the first issue. The judgment favored the dealer, and the reference was answered accordingly.