2001 (4) TMI 953 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of the Orissa Additional Sales Tax Ordinance 1995 and the government's instruction regarding the enforcement of additional sales tax during a specific period.

Analysis:
The High Court of Orissa considered the matter of whether the Orissa Sales Tax Tribunal was justified in dismissing the appeal of the Petitioner based on the interpretation of the Orissa Additional Sales Tax Ordinance 1995 and the government's instruction regarding the enforcement of additional sales tax during a specific period. The Tribunal had observed that the Ordinance's validity allowed for the levy of additional sales tax, irrespective of collection, and that the government's instruction could not override the Ordinance's provisions. However, the High Court disagreed with this view, emphasizing that the Ordinance was in force for less than a month due to the government's decision in the interest of the common people of Odisha. The Court noted that the government's conscious decision not to enforce the collection of additional sales tax, if not already collected by the dealer, was binding and consistent with the intention of not burdening the people of Odisha. The Court found it impermissible for the government to disregard its own instructions and held that the Ordinance was not required to be enforced for the period of its operation.

The Court highlighted that sales tax is an indirect tax passed on to consumers and that dealers unable to collect additional sales tax during the specified period would face challenges passing on the burden if enforced later. Therefore, the Court set aside the impugned order of the Tribunal and the corresponding orders seeking to enforce the Ordinance. The Court's decision was based on the government's instruction and the intention behind it to protect the common people of Odisha from unnecessary financial burden. The judgment clarified that the government's instructions are binding on itself, and it cannot act contrary to its own directives. As a result, the revision petition was disposed of in favor of the Petitioner, and the enforcement of the Ordinance during the specified period was deemed unnecessary and set aside by the Court.