1982 (3) TMI 224 - HC - VAT and Sales Tax

Summary

Issues involved: Interpretation of tax liability u/s 24(2)(b) of the Orissa Sales Tax Act, 1947 based on physical verification of stock and purchase tax calculation method.

Summary:
The assessee, a rice miller, was involved in a case regarding tax liability for the sale of gunny bags to the Food Corporation of India without paying sales tax. Discrepancies in stock verification and purchase tax calculation method were key points of contention during the assessment proceedings.

The revenue officials conducted stock verification using a sampling method, which was challenged by the assessee who relied on the thorough verification done by the Food Corporation of India. The Court emphasized the importance of the principal's measurement in such cases and noted a shortfall of 61 quintals of paddy based on the principal's representatives' verification.

Considering the shortfall, it was concluded that the assessee was liable to pay purchase tax on the 61 quintals of paddy. The Court held that the purchase tax demand against the assessee should be raised based on this turnover. The judgment was delivered by Misra, C.J., with Behera, J., concurring.

The reference was answered in favor of imposing purchase tax on the identified quantity of paddy, with no order for costs.