9911796707
TMI Blog2021 (9) TMI 477X X X X Extracts X X X X X X X X Extracts X X X X ..... admitting the present revision petition, this Court by an order dated 13th February, 2007 framed the following two questions for consideration: (i) Whether in the fact and circumstances of the case, the petitioner namely M/s. Akbari Continental Pvt. Ltd. is a "Hotel" or comes under "Guest House and Restaurants" under Clause-27 of the ineligibility list so as not be entitled to sales tax exemption under Entry 30-FFFF vide Finance Department Notification dated 16.08.1990? (ii) Whether in the facts and circumstances of the case, disallowance of the case, disallowance of claim of first point sale of cold-drinks and IMFL U/s. 5(2) (A) (a) read with Section 8 of the Act is sustainable in law?" 4. It must be was mentioned here that on 28th January, 2010 this Court stayed the re-assessment pursuant to the notice dated 12th January, 2010 issued to the Petitioner by the STO asking that books of account for the period of 1995-1996 be produced pursuant to the impugned order of the Tribunal. 5. The background facts are that the Petitioner is a hotelier carrying on the business of providing lodging accommodation and manufacture and sale of food, drinks etc. The Petitioner is a registered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... W/1998- 99. By order dated 30th March, 1999 the ACST noted that the Petitioner was entitled to exemption under Sl. NO. 30-FFFF of the Tax-Free Schedule as a continuing unit of IPR-1980. It was noted that the General Manager, DIC, Cuttack by a letter dated 24th December, 1996 drew the attention of the STO to the fact that as per the recommendation dated 20th January, 1995 of the State Level Empowered Committee, the Petitioner was held to be entitled to sales tax exemption. However, the 7th State Level Empowered Committee at a meeting held on 30th April, 1996 reversed its earlier decision. This decision was communicated by the Director, DIC to the STO on 25th January, 1997. The ACST held that the Petitioner was thus entitled to exemption at least till 30th April, 1996. As regards purchase or sale of soft drinks, IMFL and cigarettes, which were not manufactured or processed by the Petitioner, it was held that the Petitioner was entitled to sales tax incentive. Thus, only such deductions as were usually available in respect of such goods as first point tax paid goods were allowed. As a result, the amount payable under the assessment order was reduced to Rs. 37,860/-. The excess tax pai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r and Mr.S.S. Padhy, learned ASC for CT & GST. 14. As regards the first issue, Mr. Sahoo states that that the DIC Certificate referred to above was indeed produced before the Tribunal and had also been referred to in a brief written note submitted by the Petitioner. That the Petitioner continued to be a 'hotel' and that it was not a restaurant in terms of Sl. No. 27 of the 'ineligible list' was apparent from the deposition made by the General Manager, DIC before the STO on 14th November, 1996 pursuant to a summons issued to him under Section 21 of the OST Act. Mr. Sahoo relied on the decision in Vadilal Chemicals Ltd. v. State of Andhra Pradesh (2005) 5 RC 295 in the Supreme Court disapproved of the sales tax authorities disregarding the exemption certificate issued by a DIC. 15. On the second issue, Mr. Sahoo points out that the Petitioner purchased IMFL in bottles and sold it in the Hotel's Bar by way of pegs in loose quantity for consumption. There was obviously a wide gap between the purchase value and the sales price. The purchase of IMFL having been subjected to sales tax in the State of Orissa and there being no dispute that it had suffered sales tax, the subsequent sale o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... strictions and conditions as laid down in Finance Deptt. Notification No.789/90 dt.15.8.90 as amended from time to time." 20. The above certificate therefore should have dispelled any doubt as regards the Petitioner's eligibility for sales tax exemption. In fact, the same certificate has been relied upon by the Petitioner and accepted by the Tribunal in its orders dated 7th January 2008, 21st November 2007 and 21st May 2007 for the AYs 1993-94, 1994-95 and 1996-1997 respectively. In each of the aforementioned orders, passed after the impugned order was passed by the Tribunal on 4th September 2006 for AY 1995-96, the Tribunal has noted that in terms of the above exemption certificate, the Petitioner was exempt from paying sales tax on its finished products i.e. cooked food and beverages for a period of seven years from 1st December 1989 till 30th November, 1996. The AY 1995-96, with which the present revision petition is concerned is covered in this period. 21. In each of the orders for the aforementioned three AYs, the Tribunal has accepted the finding of the ACST that "hotel is different from guest house and restaurant" and that the eligibility certificate issued by the DIC cann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f sales in question here. One is regarding the tax payable on sale of cold drinks and the other on the sales of IMFL. As regards the sale of cold drinks, it is not in dispute that the Petitioner is not the first seller in respect of cold drinks. It has produced the invoices to show from whom it has purchased the soft drinks. The Tribunal appears to have rejected these invoices only because the seller was not a registered dealer. But the Tribunal has for the AYs 1993-94 and 1996-97accepted that the cold drinks have suffered tax at the first point of sale and that irrespective of the sellers of such cold drinks not being registered dealers themselves, the cold drinks cannot be made exigible again to sales tax. This appears position also flows from a reading of Section 8 read with Explanation (1) to Section 5 (2) (A) (a) of the OST Act. 27. In this context Mr. Sahoo is right in placing reliance on Govindan and Company v. State of Tamil Nadu, (1975) 35 STC 50, where the Madras High Court held that to claim benefit of tax on the ground that the sales effected by the Assessees were second sales, they need not show that their sellers had in fact paid the tax at the first point. It was en ..... X X X X Extracts X X X X X X X X Extracts X X X X
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