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TMI Blog2009 (9) TMI 883X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 9B(3)(a)(ii) of the OST Act, 1947. Appeal allowed. - W.P. (C.) Nos. 10938,10939,10940 of 2008 - - - Dated:- 3-9-2009 - DAS B.P. AND INDRAJIT MAHANTY , JJ. INDRAJIT MAHANTY J. M/s. Seetal Automobiles, the petitioner herein, has sought to challenge the jurisdiction of the opposite-party-Sales Tax Officer, Bhubaneswar-II Circle in issuing notice for levy of penalty under section 9B(3)(a)(ii) of the Orissa Sales Tax Act, 1947 (in short, the OST Act ) for the periods 2000-01, 2001-02 and 2002-03 in these three writ applications, respectively. Since the challenge in these writ applications is to similar notices for the aforesaid periods and the grounds raised are also same, these writ applications are taken up together for disposal through a common judgment. Sri Paikray, learned counsel appearing for the petitioner, submitted that the impugned notices under annexure 4 are wholly without jurisdiction. He submitted that the impugned notices are for the purpose of levy of penalty on the allegation of non-deposit of excess tax and surcharge under the OST Act allegedly collected by the petitioner-firm, which is strenuously denied by the petitioner. The facts le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ules. Illustration. Assuming entry tax rate and sales tax rate to be 10 per cent. (1) Purchase value of motor vehicle . . . Rs.2,00,000 (2) Entry tax payable at 10% . . . Rs.20,000 Total . . . Rs.2,20,000 (3) Sales price of the motor vehicle . . . Rs.2,20,000 (4) (a) Sales tax due at 10% . . . Rs.22,000 Deducted entry tax paid . . . Rs.20,000 Sales tax payable . . . Rs.2,000 Total . . . Rs.2,22,000 (2) When an importer of goods specified in Part III of the Schedule to the Act other than motor vehicle, liable to pay tax under this Act is also a dealer liable to pay tax under the Sales Tax Act, then the sales tax p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Rs. 1,39,14,908. On this surmise penalty of three times of the aforesaid amount on the alleged so-called excess collection of OST and surcharge amounting to Rs. 4,17,44,098.29 has been sought to be levied for the year 2000-01, Rs. 4,39,97,529 for the year 2001-02 and Rs. 4,98,25,464 for the year 2002-03 which is the subject-matter of challenge in the present batch of writ applications. Sri Paikray, learned counsel appearing for the petitioner, submitted that the notice for levy of penalty was wholly without any lawful jurisdiction and has been issued without taking into consideration, the mandate of sections 3 and 4 of the OET Act and rule 18 thereunder. It is submitted that, since the petitioner had paid entry tax at the time of purchase of the vehicles from outside the State of Orissa and bringing the same into the State of Orissa, as required under section 4(2) of the OET Act, it was within its competence to claim for setting off of such entry tax against such sales tax liability as stipulated under section 4 of the OET Act read with sections 4 and 5 of the OST Act and rule 18 of the OET Rules. Relying upon a judgment of the Orissa High Court in the case of LG Electroni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consumption, use or sale therein at such rate not exceeding twelve percentum of the purchase value of such goods from such date as may be specified by the State Government and different dates and different rates may be specified for different goods and local areas subject to such conditions as may be prescribed: Provided that the State Government may direct that in such circumstances and under such conditions and for such period as may be prescribed, a dealer shall pay in lieu of tax payable under this Act a sum fixed in the prescribed manner, and in such a case the tax shall be deemed to have been compounded. (2) The tax leviable under this Act shall be paid by every dealer in scheduled goods or any other person who brings or causes to be brought into a local area such scheduled goods whether on his own account or on account of his principal or customer or takes delivery or is entitled to take delivery of such goods on such entry: Provided that no tax shall be levied under this section on the entry of scheduled goods into a local area, if it is proved to the satisfaction of the assessing authority that such goods have already been subjected to entry tax or that the entry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion (2) of section 3 of the OET Act. The Legislature has provided a statutory illustration , under rule 18, which clearly stipulates the manner in which liability for sales tax and set-off of entry tax paid has been clearly laid down. In the light of the illustration made in the said Rules, it is clear that while the petitioner (dealer in motor vehicles) was liable to pay entry tax at the time of entry of the vehicle into the State of Orissa (and in fact, have paid the same), it has also been authorized to collect sales tax at the time of sale of the vehicle to its purchaser (to be computed on the basis of both the value of the vehicle + entry tax). The illustration further stipulates that on collection of the sales tax in the manner statutorily required, the dealer was entitled to seek set-off of the amount of the entry tax paid by him at the time of entry/purchase of the vehicle and was required to deposit only the balance sales tax payable. In the present case, the petitioner has been assessed under the OET Act (annexure 2) which the petitioner has admittedly deposited. It is this amount of entry tax paid that was claimed by the dealer for set-off against the sales tax due ..... 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