1981 (7) TMI 226 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of Orissa Sales Tax Act of 1947 - Liability of assessee to pay sales tax from July 1969 to October 1969 - Application of amending Act of 1968 - Discrimination between continuing dealer and new dealer.

Analysis:
The judgment by the Orissa High Court involved a reference under section 24(1) of the Orissa Sales Tax Act of 1947 regarding the liability of an assessee to pay sales tax from July 1969 to October 1969. The assessee, an unregistered dealer in grocery, stationery, and controlled food articles, challenged the assessment made under section 12(5) of the Act for the assessment period of 1969-70. The assessing officer determined the liability under the Act from June 1969 as the gross turnover exceeded Rs. 10,000 by then. The assessee contended that the amending Act of 1968, effective from July 1969, raised the non-taxable limit to Rs. 25,000, and as their turnover did not exceed this limit on July 1969, they were not liable to pay tax. This contention was upheld by the Sales Tax Tribunal, leading to the reference before the High Court.

The High Court analyzed the provisions of the Orissa Sales Tax Act and the amending Act of 1968 in light of a previous Bench decision. The Court referred to a specific case where it was held that liabilities accrued prior to the amendment remained unaffected by the change in the non-taxable limit. The Court rejected the assessee's argument that the liability saved under the amending Act only applied to section 4(1) of the principal Act and not sub-section (3), clarifying that all liabilities under the section were saved without distinction. The Court disagreed with the assessee's counsel's interpretation of the saving clause in the amending Act and upheld the decision of the previous case.

Furthermore, the Court addressed the contention of discrimination raised by the assessee, arguing that treating continuing dealers differently from new dealers did not amount to discrimination under Article 14 of the Constitution. The Court highlighted that different treatment based on the timing of entry into business was not discriminatory, citing examples from other taxing statutes where benefits were provided to specific categories of assessees. The Court concluded that there was no scope for the discrimination argument and declined to accept the submissions made by the assessee, ultimately ruling in favor of the revenue and holding the assessee liable to pay sales tax for the period in question.

In a concurring opinion, Justice B.N. Misra agreed with the Chief Justice's analysis and decision in favor of the revenue. The judgment emphasized the interpretation of statutory provisions, the application of previous case law, and the distinction between continuing and new dealers in determining liability under the Orissa Sales Tax Act. The Court's ruling clarified the legal position regarding the liability of the assessee and upheld the principles established in previous judgments, providing a comprehensive analysis of the issues involved in the case.