1992 (8) TMI 260 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of rule 93-I of the Orissa Sales Tax Rules, 1947 regarding the taxation at the first point in a series of sales of baby foods like Angel Baby Milk Food.

Analysis:
The High Court of Orissa was moved by a dealer under section 24(2) of the Orissa Sales Tax Act, 1947, seeking clarification on whether the non-inclusion of Angel Baby Milk Food in the first point levy category would attract liability for assessment at the first point. The Tribunal disallowed the dealer's claim for deduction under section 5(2)(A)(a)(ii) of the Act, leading to an assessment by the Sales Tax Officer, which was upheld by the Assistant Commissioner of Sales Tax and the Tribunal. The dealer contended that Angel Baby Milk Food did not fall under the category specified in rule 93-I of the Orissa Sales Tax Rules, as it was not explicitly mentioned in the relevant notifications. However, the department argued that the use of the expression "such as" in the rule implied that Angel Baby Milk Food was subject to tax at the first point in a series of sale.

The Court delved into the interpretation of rule 93-I, focusing on the significance of the term "such as" in the context of the rule. It analyzed the meaning of "such" according to dictionaries and emphasized that the expression "such as" is illustrative and not exhaustive. The Court highlighted that the context in which "such as" is used is crucial, especially when divergent articles are indicated. It cited examples from previous cases to illustrate that items not belonging to the same class may not be covered under a rule specifying "such as." The Court also noted that the intention behind the rule was to encompass baby foods of various categories and descriptions, as indicated by the inclusion of different trade names in the rule.

Ultimately, the Court affirmed the Tribunal's view that Angel Baby Milk Food fell under item (11) of rule 93-I, thereby subjecting it to tax at the first point in a series of sale. The judgment favored the Revenue and ruled against the dealer. Additionally, a submission by the dealer regarding potential double taxation was acknowledged by the Court, but it clarified that such matters were beyond the scope of the current reference jurisdiction and advised the dealer to seek available legal remedies. Both Justices Pasayat and Patnaik concurred with the decision, and the reference was answered in the affirmative in favor of the Revenue.