1991 (11) TMI 226 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to order passed by Orissa Sales Tax Tribunal regarding inclusion of transport charges in gross turnover for assessment under the Orissa Sales Tax Act and Additional Rules.

Analysis:
The petitioner, a registered dealer under the Orissa Sales Tax Act, was assessed for the year 1979-80 by the Sales Tax Officer. The assessing officer included transportation charges in the gross turnover, leading to an enhanced turnover and extra tax demand. The petitioner appealed, and the Assistant Commissioner excluded transport charges from the gross turnover, reducing the tax liability. The State of Orissa appealed to the Tribunal, which held in favor of including transport charges in the taxable turnover. The petitioner sought reference to the High Court, but the application was rejected. The High Court observed that the Tribunal erred in not considering the finality of the Assistant Commissioner's order excluding transport charges. Despite declining to interfere in the reference application, the High Court remitted the matter back to the Tribunal for rehearing to ensure justice to both parties and uphold statutory liabilities.

The Additional Act and Rules define "gross turnover" as per the principal Act, the Orissa Sales Tax Act. The assessment for additional tax under Rule 5 of the Additional Rules is based on the gross turnover determined under the principal Act. In this case, the gross turnover should be considered after the exclusion of transport charges as per the Assistant Commissioner's final order. The Tribunal failed to consider the effect of not challenging the determination under the principal Act, necessitating a rehearing to ensure proper assessment and application of statutory provisions. The High Court emphasized the need for the Tribunal to reconsider the matter comprehensively to uphold both the State's revenue entitlement and the assessee's statutory tax liability, in line with constitutional provisions.

The High Court quashed Annexure 3 to the writ application and disposed of the writ application without costs. Both judges, Pasayat A. and Mohanty S.K., concurred in disposing of the writ application accordingly.