1980 (8) TMI 190 - HC - VAT and Sales Tax

Summary

Issues:
1. Determination of whether the sale of sleepers by the assessee constituted intra-State sale.
2. Assessment of sales turnover under the Orissa Sales Tax Act.
3. Examination of whether the sales were exigible to Central sales tax.

Issue 1: Determination of Intra-State Sale
The assessee, a forest contractor registered as a dealer, supplied sleepers to the South Eastern Railway as per an agreement with the Divisional Forest Officers. The sleepers were dispatched outside the State of Orissa to meet railway specifications. The assessing officer rejected the claim that the sales were not exigible to tax, leading to raised demands under the Orissa Sales Tax Act. The Tribunal upheld the assessment, considering the sales as intra-State. Previous cases like State of Orissa v. Orissa Forest Corporation Ltd. and Singhbhum Timber Trading Company v. State of Orissa were cited, where similar issues were addressed. The Court agreed with the decision in Singhbhum Timber Trading Company, stating that the transactions were exigible to Central sales tax.

Issue 2: Assessment of Sales Turnover
The Court referenced the case of State of Orissa v. Orissa Forest Corporation Ltd., where the Tribunal remanded the case for reassessment. The Court disagreed with this decision, stating that the Tribunal was not right in remanding the case for reassessment after finding that there was one sale by the forest contractors or the Forest Corporation to the Divisional Forest Officers under the Orissa Sales Tax Act. Consequently, the second question related to credit sales and their non-inclusion in turnover did not arise, as the initial finding was conclusive.

Issue 3: Exigibility to Central Sales Tax
In the case of Singhbhum Timber Trading Company v. State of Orissa, the Tribunal found that the sales between the assessee and the Forest Utilisation Officer were exigible to Central sales tax, not under the Orissa Sales Tax Act. The Court agreed with this assessment, highlighting the preexisting contract for the supply of sleepers to the railways through the Forest Utilisation Officer. The Court concluded that the transactions constituted inter-State sales, and the sales were indeed taxable under the Central Sales Tax Act.

In conclusion, the Court upheld the assessment of the sales turnover under the Orissa Sales Tax Act and determined that the transactions were exigible to Central sales tax. The references were answered accordingly, with no order for costs in both cases.