2023 (4) TMI 256 - HC - VAT and Sales Tax

Levy of tax - labour and service charges involved in the works contract executed between the Petitioner and the Railways - tax on transportation charges, which was separately charged - transportation charges shown separately is deductible from the GTO as per section 5(2)(A)(a)(ii) of the OST Act - Chips and ballast exigible to tax @4% being minor minerals covered under the Mines Act, 1952 read with Mines and Mineral Development Act, 1957 as well as Odisha Minor Minerals Concession Rules, 2004 - ballast comes under Entry 117 of List C of the Rate Chart under the OST Act and exigible to tax @4% being minor minerals or not. HELD THAT - The learned Tribunal observed that the goods, viz. ballasts and chips in question fall within the scope of Entry 189 of scheduled goods declared taxable under the OST Act and the transportation of such goods being pre-sale event falling within the ambit of Section 5(2)(iii) read with Section 2(h), the charges relating thereto would form part of taxable turnover. Since no written replies are forthcoming from the side of the Revenue, and the matter is of the year 2015, this Court proceeded to hear the matter on merits on the basis of available material and arguments advanced by respective counsel for the parties - This Court, on perusal of record, finds that the factual position obtained in STATE OF ORISSA REPRESENTED BY COMMISSIONER OF SALES TAX, ORISSA, M/S. SRIRAM MINERALS M/S. HINDUSTAN MINERALS M/S. ESSKAY STONE VERSUS M/S. D.K. CONSTRUCTION, M/S. MAHASHAKTI GRANITE CRUSHER PRIVATE LIMITED, M/S. SHIVA MINERALS, M/S. HINDUSTAN MINERALS, M/S. C.C. SAHU SONS (CONSTRUCTION) PRIVATE LIMITED, M/S. KHUSHRAJ ENTERPRISES, M/S. NARAYANI TRADERS 2017 (3) TMI 535 - ORISSA HIGH COURT is identical to the present case and similar questions of law as posed in the present revision petition are decided in favour of the petitioner-assessee and against the revenue. The Assessing Authority is directed to re-compute the tax liability as per observation made and taking into consideration the Judgment of this Court - the revision petition is allowed.

Summary

Issues involved:
The issues involved in the judgment are:
1. Challenge to the Order of the Odisha Sales Tax Tribunal
2. Treatment of labour and service charges in works contract
3. Taxability of transportation charges under the Odisha Sales Tax Act
4. Deductibility of transportation charges from Gross Turnover
5. Taxability of chips and ballast as minor minerals
6. Classification of ballast under Entry 117 of the Rate Chart
7. Consideration of earlier decision by the Tribunal

Summary:

Challenge to Tribunal Order:
The petitioner, a registered dealer under the Odisha Sales Tax Act, challenged the Order of the Odisha Sales Tax Tribunal dated 11.01.2013. The petitioner raised questions regarding the perversity and erroneous nature of the Tribunal's order.

Treatment of Labour and Service Charges:
The issue of labour and service charges involved in the works contract executed between the Petitioner and the Railways was raised. The Tribunal's decision on not allowing these charges was questioned by the petitioner.

Taxability of Transportation Charges:
The question of whether transportation charges separately charged are liable to be taxed under the Odisha Sales Tax Act was raised. Additionally, the deductibility of transportation charges from the Gross Turnover was a matter of consideration.

Taxability of Chips and Ballast:
The taxability of chips and ballast as minor minerals under the Mines Act, 1952, Mines and Mineral Development Act, 1957, and Odisha Minor Minerals Concession Rules, 2004 was a crucial issue. The classification of ballast under Entry 117 of the Rate Chart was also disputed.

Consideration of Earlier Tribunal Decision:
The Tribunal's overlooking of its earlier decision in the case of the Petitioner where the issues were identical and the same was questioned.

Court's Decision:
Upon review, the Court found that the factual position was similar to a previous case and the questions of law were decided in favor of the petitioner. Consequently, the Court set aside the orders and directed the Assessing Authority to re-compute the tax liability based on the judgment in a specific case.