2022 (7) TMI 7 - HC - VAT and Sales Tax

Correctness of mechanism of calculation of set off under Note-1 and Note-2 of List-C of OST Act in respect of Entry No.76 of rate chart - HELD THAT - It has been factually found by the Tribunal that no document was filed by the Assessee to disprove the allegation of the assessing authority denying the set off in respect of consumable since there was no purchase invoice produced by the Assessee. Importantly, the Tribunal noted that although in the grounds of appeal the Assessee claimed to have documents he was willing to produce, in fact he failed to produce such documents to disprove the case of the Department. Learned counsel for the Assessee was not able to dispute that the Assessee here is not claiming a benefit under any IPR and the question therefore of Assessee being entitled to benefit of exemption apart from the benefit under the IPR does not arise. The Court is not inclined to interfere as the orders impugned appear to have turned purely on facts and have not been shown to be perverse or erroneous. Consequently, the question framed is answered in the affirmative i.e. in favour of the Department and against the Assessee. Revision petition dismissed.

Summary

Issues:
1. Revision petition challenging order of Orissa Sales Tax Tribunal for AY 2003-04.
2. Calculation of set off under Note-1 and Note-2 of List-C of OST Act.
3. Denial of set off by STO and ACST for the sale of finished goods inside Orissa.
4. Failure to produce documents by Assessee to disprove denial of set off.
5. Applicability of decision in Luis Packaging Pvt. Ltd. v. State of Orissa.
6. Assessee not claiming benefit under any IPR.
7. Tribunal's decision not being perverse or erroneous.

Analysis:
1. The revision petition arises from the Orissa Sales Tax Tribunal's order dismissing the Assessee's appeal for AY 2003-04. The Tribunal affirmed the Assessment Order by the Sales Tax Officer raising a demand of Rs.2,49,226/-, leading to the present challenge.

2. The substantial question of law admitted by the Court pertains to the correct mechanism of set off calculation under Note-1 and Note-2 of List-C of OST Act. The Assessee's claim for set off was based on the purchase of raw materials for manufacturing finished products.

3. The STO and ACST denied the set off for the sale of finished goods inside Orissa, citing lack of maintained accounts and violation of tax rate schedule clauses. The Tribunal upheld this denial, emphasizing the Assessee's failure to provide supporting documents to disprove the denial.

4. The Tribunal referenced the decision in Luis Packaging Pvt. Ltd. v. State of Orissa, clarifying that the Assessee was not entitled to benefits under any IPR, rendering the Luis Packaging case inapplicable. The denial of set off was deemed justified due to the absence of supporting invoices.

5. The Court found no fault with the Tribunal's decision, noting that it was based on facts and not shown to be erroneous. The Assessee's failure to challenge the denial effectively led to the dismissal of the revision petition.

6. Ultimately, the Court upheld the Tribunal's decision, ruling in favor of the Department and against the Assessee. The judgment highlights the importance of maintaining proper documentation and adherence to tax regulations in claiming set off benefits.