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TMI Blog2009 (8) TMI 1105X X X X Extracts X X X X X X X X Extracts X X X X ..... collection of VAT The reasons ascribed by the assessing authority while completing the assessment being based on a misinterpretation of the provisions of the OVAT Act, we quash the order of assessment dated February 12, 2007 (annexure 1) passed by the Sales Tax Officer, Bhanjanagar Circle, Bhanjanagar. The amount, which has been deposited by the petitioner by virtue of the order of this court dated March 13, 2007, be refunded to it by the Revenue, on proper application, within three months from the date of communication of this judgment, failing which, the petitioner shall be entitled to interest at 10 per cent per annum to be computed from the date of deposit. - W.P. (C) No. 2551 of 2007 - - - Dated:- 5-8-2009 - DAS B.P. AND MAHANTY ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce sugar was exempted from taxation by entry 70 in Part II of the OVAT Act placing reliance on the Explanation thereto since sugar was subject to levy of excise duty under the Additional Duties of Excise (Goods of Special Importance) Act, 1957. Accordingly, the petitioner was taxed at four per cent on the value of purchase of sugarcane and consequential demand was raised on that score. This writ petition was filed on March 6, 2007. Notice in this case was issued on March 13, 2007 directing the Revenue to file counter-affidavit, if any, by the end of April, 2007 and on that date, as an interim measure, the demand raised pursuant to annexure 1 was directed to be stayed subject to the petitioner depositing Rs. 10 lakhs. Thereafter the matte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Goods of Special Importance) Act, 1957. Therefore, the contention of learned counsel for the Revenue that sugar is an exempted item but is exigible to tax under the provisions of section 12(ii)(b) of the OVAT Act cannot be accepted. The fact remains that, the assessing authority has held that sugarcane is exigible to purchase tax since sugar is an exempted item. Admittedly, VAT is not collected from the finished product like sugar as the petitioner is paying the excise duty under the Additional Duties of Excise (Goods of Special Importance) Act, 1957. Entry 108 in Part II of Schedule B makes sugar exigible to Orissa value added tax, but due to the reason of payment of excise under the Additional Duties of Excise (Goods of Special Im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be noted that liability to pay tax chargeable under section 3 of the Act is different from quantification of tax payable on assessment. Liability to pay tax and actual payment of tax are conceptually different. But for the exemption the dealer would be required to pay tax in terms of section 3. In other words, exemption presupposes a liability. Unless there is liability question of exemption does not arise. Liability arises in terms of section 3 and tax becomes payable at the rate as provided in section 12. Section 11 deals with the point of levy and rate and concessional rate. Hence the reasons ascribed by the assessing authority while completing the assessment being based on a misinterpretation of the provisions of the OVAT Act, we ..... X X X X Extracts X X X X X X X X Extracts X X X X
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