2010 (3) TMI 1010 - HC - VAT and Sales Tax

Whether the sale took place within the State of Orissa and not within the State of Andhra Pradesh and as such it should be treated as intra-State sale within the State of Orissa? Held that - A bare perusal of the order of the Assistant Commissioner of Sales Tax, Puri Range, Bhubaneswar as well as order passed by the Commissioner of Sales Tax, Orissa under annexure 1 would show that save and except quoting the observations made by the Andhra Pradesh Sales Tax Tribunal, no independent effort has been made for coming to the conclusion that actually the sale is intra-State and not inter-State as held by them. The order of assessing authority as well as the revisional authority which were totally based upon the observation of the Andhra Pradesh Sales Tax Tribunal, cannot be allowed to sustain. Accordingly, we set aside the order dated March 20, 2007 passed by the Assistant Commissioner of Commercial Taxes, Puri Range, Bhubaneswar under annexure 9 and the order dated June 11, 2007 passed by the Commissioner of Sales Tax, Orissa in suo motu Revision Case

Summary

Issues involved:
Challenge to order treating sale of DEPBs as intra-State sales under Orissa Sales Tax Rules based on Andhra Pradesh Sales Tax Tribunal's decision.

Analysis:
The petitioner, a public sector undertaking, challenged an order treating the sale of Duty Entitlement Pass Book (DEPB) licenses as intra-State sales under Orissa Sales Tax Rules. The petitioner had sold DEPBs through public auction to dealers from outside the State of Orissa. The Andhra Pradesh Sales Tax Tribunal initially held the sale occurred within Orissa, but the Supreme Court later set aside this decision, emphasizing the need for proper examination of materials to determine the nature of the sale. The revisional authority relied solely on the Tribunal's decision, leading to the imposition of tax under the Orissa Sales Tax Act. However, the High Court found that no independent effort was made to establish the intra-State nature of the sale post the Supreme Court's decision. Consequently, the High Court set aside the assessment orders and directed a fresh assessment by the Joint Commissioner of Commercial Taxes.

The petitioner contended that the revisional authority's conclusion was solely based on the Tribunal's decision, lacking any additional supporting material. The assessment orders did not independently establish the intra-State nature of the sale, especially after the Supreme Court overturned the Tribunal's observations. The High Court emphasized the need for a fresh assessment considering all relevant documents and materials. The petitioner was granted the opportunity to present all necessary documents, and the assessing authority was instructed to gather any additional materials required for a thorough examination.

In conclusion, the High Court disposed of the writ petition, setting aside the assessment orders and directing a fresh assessment by the revisional authority. The petitioner was instructed to appear before the authority with all relevant documents, ensuring a comprehensive review of the transaction's nature. The judgment highlighted the importance of conducting assessments based on all available evidence, especially in complex cases involving inter-State transactions and tax implications.