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TMI Blog2023 (3) TMI 796X X X X Extracts X X X X X X X X Extracts X X X X ..... 1305 - SUPREME COURT ] to 2017 (till 28.03.2017, i.e, date on which the Division Bench of Supreme Court allowed the appeals of the State of Odisha)? HELD THAT:- Harmonious reading of the various provisions along with charging provision, i.e., Section 3 of the OET Act gives clear indication that whereas the entry tax is exigible on entry of goods specified in the Schedule appended to the OET Act into the local area for consumption, use or sale therein and return disclosing tax payable is required to be furnished as per sub- section (1) of Section 7. It is provided under sub-section (10) thereof that each and every return is to be scrutinized by the Assessing Authority. If mistake is detected as a result of scrutiny, the Assessing Authority is vested with power to proceed with the matter against the dealer as provided under sub-section (11). Thus, it is explicit that detection of mistake in return upon scrutiny triggers action against the dealer asking it to make payment of the extra amount of tax along with the interest as per the provisions of this Act . The OET Act provides for levy of interest under sub-section (5) of Section 7. No other provision empowering Authority to levy int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Authority would enure to the benefit of none. Therefore, the petitioner is required to determine its own liability as per self-assessed return(s) already filed. Levy of interest under Section 7(5) of the OET Act - HELD THAT:- It is trite that provision for interest is to be construed as substantive law and not machinery provision. Ordinarily charging section which fixes liability is to be strictly construed. But the rule of strict construction is not extended to the machinery provisions which are construed like any other statute. The machinery provisions must be so construed as would effectuate the object and purpose of the statute and not defeat the same. Any provision made for charging or levying interest on delayed payment of tax must be construed as a substantive law and not adjectival law. There is no ambiguity in holding that in the presence of the expression without sufficient cause in sub-section (5) of Section 7 of the OET Act and the petitioner(s) having justified by showing sufficient cause for failure to deposit amount of tax due along with the return, which cannot be treated as admitted tax in view of legal position contained in paragraph 30 of Reliance Industries Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 19738 of 2017 W.P.(C) No. 19739 of 2017 W.P.(C) No. 19974 of 2017 W.P.(C) No. 19975 of 2017 W.P.(C) No.20256 of 2017 and others M/s. Shree Bharat Motors Ltd. and Another M/s. Praxair India, M/s. Nestle India Ltd., M/s. Essel Mining Industries Ltd., M/s. Koshala Enterprises Pvt. Ltd. M/s. Indera Motors, M/s. Amarnath Enterprises, M/s. Kiran Sanitary and Machinery, M/s. Seetal Automobiles, M/s. Utkal Polyweave Industries Pvt. Ltd., M/s. Bharat Motors, M/s. JMG Automobiles M/s. Super Sales Automobiles Pvt. Ltd., M/s. City Motors Pvt. Ltd., M/s. Consortium Automobiles Pvt. Ltd., M/s. Super Sales Motors Pvt. Ltd., M/s. Utkal Automobiles Pvt. Ltd., M/s. R.K. Marbels M/s. Utkal Auto, M/s. Sunny Motors, M/s. Orbit Motos Pvt.Ltd., M/s. Sky Automobiles M/s. Swati Marbels, Versus The Sales Tax Officer, Bhubaneswar-I Circle, Bhubaneswar and Others State Others, Commissioner of Sales Tax, Commissioner of Commercial Taxes Another, State of Odisha Sales Tax Officer, Bhubaneswar-II Advocates appeared in the case: For the Petitioners : Mr. Surya Prasad Mishra, Senior Advocate with M/s. Bhabani Prasad Mohanty and Rudra Prasad Kar, Advocates Mr. Jnanesh Mohanty, Advocate M/s. Sumit Lal, Advocate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ropriate order/writ/direction quashing the order dated 11.11.2016 passed by the opposite party No.2, under Annexure-6; ii) issue a writ of certiorari or a writ in the nature of certiorari, or such other appropriate order/writ/direction quashing the notices in E-24 dated 26.05.2017 under Annexure-9 series; iii) issue a writ of certiorari or a writ in the nature of certiorari, or such other appropriate order/writ/direction quashing the notices in E-8 dated 26.05.2017 under Annexure-8 series; iv) issue a writ of certiorari or a writ in the nature of certiorari, or such other appropriate order/writ/direction quashing the order dated 24.06.2017 under Annexure-11; v) issue a writ of certiorari or a writ in the nature of certiorari, or such other appropriate order/writ/direction quashing the Circular dated 23.06.2017 under Annexure- 10; vi) issue a writ of mandamus or a writ in the nature of mandamus, or such other appropriate order/writ/direction restraining the opposite parties from proceeding against the petitioner No.1 under the OET Act in any manner whatsoever until the constitutional validity thereof is determined in accordance with law; vii) issue any other writ(s) or pass such oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also be accepted since it is a compensatory tax and since what is taxed or intended to be taxed is only entry of goods into a local area for consumption, sale or use within that area, the whole of the State has necessarily to be brought within the purview of the Act to the extent it is part of a local area as defined in the Act. Therefore, nothing turns on the argument that all parts of the State are brought within the definition by making it a part of one local area or another. The legislation cannot be successfully challenged as a colourable piece of legislation. 44. In the result, while declining to strike down the Orissa Entry Tax Act, 1999 as ultra vires, we direct that (1) Unless the basic ingredients, i.e., Entry of scheduled goods for the purpose of Consumption, Use or Sale into a local area of the State are satisfied, the provisions of the Orissa Entry Tax Act, 1999 shall not be attracted; (2) The goods which enter into a local area/areas only for the purpose of transit will not be subject to Entry Tax; and (3) Every manufacturer of scheduled goods under Section 26 shall collect by way of Entry Tax amount equal to the tax payable on the value of the finished products unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... connection indicated in para 8 of the judgment in Bhagatram Rejeevkumar Vrs. Commissioner of Sales Tax, M.P. 1995 Supp (1) SCC 673 and followed in the case of State of Bihar Vrs. Bihar Chamber of Commerce, (supra) is, in our opinion, not good law. Accordingly, the constitutional validity of various local enactments which are the subject matters of pending appeals, special leave petitions and writ petitions will now be listed for being disposed of in the light of this judgment. 2.3. Thereafter, the two-Judge Bench of the Hon ble Apex Court observed in Jindal Stainless Ltd. (3) Vrs. State of Haryana, (2006) 7 SCC 271 thus: 5. Since relevant data do not appear to have been placed before the High Courts, we permit the parties to place them in the writ petitions concerned within two months. The High Courts concerned shall deal with the basic issue as to whether the impugned levy was compensatory in nature. The High Courts are requested to decide the aforesaid issue within five months from the date of receipt of our order. The judgment in the respective cases shall be placed on record by the parties concerned within a month from the date of the decision in each case pursuant to our dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsatory tax is sought to be levied and whether the Act facially indicates the benefits which is quantifiable or measurable and the proportionality of the quantifiable benefits but we have not found any such thing in the Act. They do not show that payment of entry tax is reimbursement/recompense for the quantifiable and measurable benefits to be provided to its payers. Providing facilities to the citizens or others would not definitely come under the activities like movement of trade, commerce and intercourse for the free flow of trade and commerce. 19. Therefore, the State has failed to show that the Orissa Entry Tax is reimbursement/recompense for the quantifiable and measurable benefits provided to trades people and the provision for realization of tax therein was not compensatory in nature. 2.5. During pendency of aforesaid seven writ petitions, many dealers/persons by way of filing fresh writ petitions questioned the vires of the OET Act, where new plea of discrimination under Article 304(a) of the Constitution of India was raised by the State of Odisha. This Court pronounced Judgment on 18th February, 2008 in the case of Reliance Industries Ltd. Vrs. State of Odisha, etc. etc. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the State of Orissa. However, we do not find any discrimination in the provisions of the Act between the goods imported from outside the State and those manufactured or produced in the State of Orissa and are brought into the local area within a State. In this regard, the definition of entry of goods given in Clause (d) of Section 2 is relevant which shows that there is no discrimination between the goods produced or manufactured within the State of Orissa or imported from outside and are brought within the local area. The rate of tax imposed under the Act or the Rules are also applicable uniformly on the goods imported from outside or goods manufactured within the State which are brought into a local area. Therefore, it cannot be said that the Orissa Entry Tax Act is not made under Clause (a) of Article 304 of the Constitution. However, the State has no jurisdiction to impose tax on such goods imported from outside and are not manufactured within the State of Orissa. Therefore, the opposite parties may make scrutiny of the same and not realize entry tax on such goods but for this the Act cannot be declared ultra vires. 2.6. Aggrieved by the observation regarding jurisdiction of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed hereinabove, we are of the view that each of the assessees will, without prejudice to its rights, deposit with the Department one-third of the outstanding amount indicated in List-A and List-B as on 30th September, 2009, before 31st March, 2010. Each of such assessees will also continue to deposit with the Department the outstanding amount on the basis of the current liabilities, which has accrued after 30th September, 2009, at the rate of 33 1/3rd% of the amount due in the monthly Returns which each of the assessees has been filing with the Department. It needs to be clarified that this order is confined to cases falling under Paragraph (30) of the impugned judgement. As far as the item, which is not covered by Paragraph (30) of the impugned judgement, is concerned, liberty is given to the assessees to move separate interlocutory applications. Before concluding, it may be mentioned that the State of Orissa will file an affidavit undertaking to refund the amount in the event of the State losing its case with interest to be fixed at the final hearing of the matter. Such an undertaking will be given by the Chief Secretary of the State. We make it clear that the amount which we are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was passed on 06.05.2010: Heard learned counsel for the petitioner and learned counsel for the Revenue. It is stated by the learned counsel for the petitioner that the dispute relating to paragraph 30 of the judgment dated 18.02.2008 rendered by this Court in the case of M /s. Reliance Industries Ltd., Vrs. State of Orissa and Others reported in (2008) 16 VST 85 (Orissa), which is similar to the case of the present petitioner, is now pending adjudication before the apex Court in SLP(C) No. 14454-14778 of 2008. In view of the order dated 3.2.2010 passed by the apex Court in I.A. Nos. 327-651/2009, arising out of the aforesaid SLPs, we direct the petitioner to pay 1/3 of the arrear dues that would be computed up to 30.9.2009, by the end of May, 2010. As to the other arrear dues and current liability with effect from October 2009 onwards, the petitioner shall go on paying at the rate of 33 1/3% from June, 2010 along with the return. We make it very clear that the amount which is directed to be paid shall be treated as a deposit and is not a tax till final decision is taken by the apex Court. However, die aforesaid payment is without prejudice to the rights and contentions of the parti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y enumerated. Interplay/interrelationship between Article 304(a) and Article 304(b). The significance of the word and between Articles 304(a) and 304(b). The significance of the non obstante clause in Article 304. The balancing of freedom of trade and commerce in Article 301 vis- -vis the States authority to levy taxes under Article 245 and Article 246 of the Constitution read with the appropriate legislative entries in the Seventh Schedule, particularly in the context of movement of trade and commerce. 12. Whether Article 304(a) and Article 304(b) deal with different subjects? Whether the impugned taxation law to be valid under Article 304(a) must also fulfil the conditions mentioned in Article 304(b), including Presidential assent? Whether the word restrictions in Article 302 and in Article 304(b) includes tax laws? Whether validity of a law impugned as violative of Article 301 should be judged only in the light of the test of non- discrimination? Does Article 303 circumscribe Article 301? Whether internal goods would come under Article 304(b) and external goods under Article 304(a)? Whether per se test propounded in Atiabari case [AIR 1961 SC 232 : (1961) 1 SCR 809] should or sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd., AIR 1962 SC 1406 : (1963) 1 SCR 491. 2.11. While the matter stood thus, this Court heard another batch of matters raising question as to whether scheduled goods imported from outside the territory of India is exigible to Odisha entry tax and delivered Judgment dated 09.10.2012 in the case of Tata Steel Ltd. Vrs. State of Odisha, etc., etc., 2013 (I) ILR-CUT 256 , by holding thus: 36. Thus, on the basis of the discussions resorted to above, this Court comes to the conclusion that the argument advanced by learned counsel for the petitioners that entry tax is not leviable on the goods imported through buyers is attractive but is without substance. 2.12. Said Judgment being carried to the Hon ble Supreme Court of India in SLP(C) No.33923 of 2012, and Others, the following interim Order dated 09.04.2013 was passed: *** After hearing the learned counsel for the parties to the lis, we are of the opinion that a conditional interim order requires to be passed in these cases. Accordingly, we direct the petitioner in each case to pay/deposit 50% of the tax demand with interest for the past period. However, there shall be absolute stay of recovery of the penalties. For the future period, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the present case indeed satisfy this test is left to be determined by the regular benches hearing the matters. 9. States are well within their right to design their fiscal legislations to ensure that the tax burden on goods imported from other States and goods produced within the State fall equally. Such measures if taken would not contravene Article 304(a) of the Constitution. The question whether the levies in the present case indeed satisfy this test is left to be determined by the regular benches hearing the matters. 10. The questions whether the entire State can be notified as a local area and whether entry tax can be levied on goods entering the landmass of India from another country are left open to be determined in appropriate proceedings. 2.14. Thereafter, Division Bench of the Hon ble Supreme Court of India, in the case of Bharti Airtel Ltd. Vrs. Assessing Authority, Odisha Entry Tax and Another, (2018) 57 GSTR 1 (SC) observed as follows: 7. It is argued by learned counsel for the appellant that this Court went by the concept of burden and equalizing of said burden. It is submitted that since the law is now clarified, the validity of the provisions of Orissa Entry Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) has now been conclusively laid down by Nine Judges Bench in Jindal Stainless Ltd.(supra). We are thus of the view that liberty be given to petitioners to raise the plea of discrimination under Article 304(a) in accordance with the law as laid down by Nine Judges Bench in Jindal Stainless Ltd.(supra). We, however, are of the view that for the above purposes, it is not necessary to grant any liberty to file a fresh writ petition at this stage and at this distance of time. The ends of justice shall be served, if liberty is granted to the petitioners to revive their writ petitions by making a proper application before the High Court. In the writ petitions which have been dismissed by the Orissa High court against which present appeals are decided, the liberty to revive such petition and to urge ground under Article 304(a) is granted which can be availed only within the period of 30 days from the date of this judgment. 144. In view of foregoing discussion, we arrive at the following Conclusions: (i) Orissa Entry Tax Act, 1999, Kerala Tax Act, 1994 and Bihar Tax on Entry of Goods in Local Area for Consumption, Use or Sale, 1993 (before its amendment by Bihar Act, 2003 and 2006) do not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed. (vi) In Civil Appeals filed against judgment of Orissa High Court, appellants who were writ petitioners before the High Court are given liberty to file an application within 30 days from today to revive their writ petitions and urge ground of discrimination under Article 304(a) as per law laid down by Nine Judges Bench in Jindal Stainless Ltd.(supra). 2.16. The Taxing Authorities having sprung into action by serving demand notices with respect to balance tax which remained unpaid after complying with the conditional/partial deposit as directed by the Hon ble Supreme Court along with interest invoking provisions of Section 7(5) of the OET Act besides penalty, writ petitions have been filed challenging Assessment Orders, notice(s) in Form E-24 indicating less payment of tax in the return(s) and demand notice(s) in Form E-8. 2.17. This Court in one of the writ petitions being Ceramic Sales Corporation Vrs. State of Odisha, W.P.(C) No.21189 of 2017, directed vide Order dated 8th December, 2017 for constitution of Committee to redress grievance pertaining to payment of penalty and interest by various tax payers under the OET Act. Accordingly, a Committee was formed with the follow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 08.12.2017 passed in W.P.(C) No.21189 of 2017, the report of the Committee constituted to redress grievances pertaining to payment of penalty and interest by various tax payers under the Odisha Entry Tax Act, 1999 in sealed cover is produced from the custody of Mr.B.P. Pradhan, learned Additional Government Advocate and in the presence of learned counsel for the parties, the cover is opened. Perused the Report. The recommendations of the said Committee is quoted below: 7. Recommendation of the Committee In the light of the analysis made above the Committee recommends the following guidelines for waiver of penalty, payment of interest and grant of other concessions specifying as follows: (1) Penalty should not be levied/imposed for non-payment of the withheld amount of Entry Tax, if there is no suppression of turnover. (However, suppression of turnover, if any, should be dealt in as per law and levy of penalty should be made if permissible by law) (2) The parties are liable to pay interest as per Section 7(5) of the Odisha Entry Tax Act on the withheld amount @ two percentum per month till 30.06.2012 and @ one percentum per month thereafter (as the Act was amended with effect from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the basis of calculation made by the Assessing Officer and the same be complied with accordingly. 2.19. In the aforesaid batch matters [S.S. Steeloy Pvt. Ltd. (supra)] this Court passed further orders on 02.01.2020. After extracting aforesaid Order dated 24.12.2019, the following order has been passed: 2. We make it clear that those assesses who are complying with the orders, if request for instalments, the same will be considered by the Commissioner in accordance with the rules on filing of an undertaking by the concerned partner or the Director of the company along with a resolution of the said firm or company to the effect that they shall comply with the Court s order to be passed from time to time. 3. We further make it clear that pursuant to the order dated 24.04.2019 passed by this Court, while calculating the interest, the Commissioner will be lenient and calculate simple interest, if an undertaking is given that the petitioners will pay the tax on or before a particular date. 4. If application, as aforesaid, is not moved by any of the petitioners intending to avail benefit of this order on or before 31.01.2020, it will be open for the Commissioner to execute the order on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Division Bench of Supreme Court allowed the appeals of the State of Odisha)? Argument(s) advanced by the learned Counsel for the petitioners: 4. It is urged by counsel for the petitioner(s) that: (a) since the Hon ble Supreme Court directed for interim protection vide Order dated 03.02.2010 in State of Odisha Vrs. Reliance Industries Ltd. (supra), there was sufficient cause for withholding tax liability to the extent of 2/3rd of tax due during the pendency of matters before the Hon ble Supreme Court. (b) The Supreme Court having clarified in the said Order that such deposit of 1/3rd of tax liability would be treated as deposit , but not tax in the I.A. Nos. 327-651 in SLP(C) Nos.14454-14778/2008 filed by the State of Odisha, which was accepted by the Department as also the Orders of this Court disposing of writ petitions like that of Annapurna Agency (supra), there is no occasion nor does any necessity arise for the Assessing Authority to invoke provisions of Section 7(5) of the OET Act. (c) The Taxing Authorities are not justified in raising demand by way of issue of Form E-24 prescribed under Rule 10(6)(b) without adhering to the mandate contained in sub- sections (10) and (11) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ability as disclosed in the return(s), there was no scope or occasion for the Authorities to insist for payment of interest on the balance tax payable. Since the circumstance under which there was short-payment of tax, principally on account of interim Order of the Hon ble Supreme Court, additionally final order being passed by disposing of writ petition(s) by this Court following said interim order and the legal position as to exigibility of entry tax being unclear till 2017, cannot be imputed as lack of bona fides, negligence on the part of the petitioner or indolence of the taxable person(s). Hence, seeking to recover the balance tax along with interest is unjust and improper. (i) Clarity in position of law could finally be set forth by the Nine-Judge Bench of the Supreme Court in Jindal Stainless Ltd. Vrs. State of Haryana, (2016) 11 SCALE 1 = 2016 AIR SCW 5617 = (2017) 12 SCC 1 and the taxable person has taken steps to discharge the burden of tax liability of 2/3rd which remained unpaid due to interim Order dated 03.02.2010 of the Supreme Court and final orders based on said interim order passed by this Court. Cause for the delay cannot be attributed to the petitioner. In this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct of turnover which fell within the ambit of proposition laid down in paragraph 30 of Reliance Industries Ltd. Vrs. State of Odisha, (2008) 16 VST 85 (Ori). 4.2. There was sufficient cause for non-payment of entire entry tax liability disclosed in the return(s). Section 7(5) of the OET Act authorizes levy of interest only if the Taxing Authority shows that non-payment was without sufficient cause . In the present circumstance, thus, provision of Section 7(5) does not attract. 4.3. Refuting the contention of the Revenue to the effect that there was shifting of burden of tax on the customers, it has been specifically pleaded by the petitioner by way of rejoinder affidavit that in view of enunciation of law at paragraph 30 of the Reliance Industries Ltd., (2008) 16 VST 85 (Ori), the liability to pay tax on the turnover pertaining to goods brought into local area, similar goods being not manufactured or produced within the State of Odisha there was no scope for collection of tax from customers as the same would attract vice of Article 265 of the Constitution of India. 4.4. Attention of this Court is drawn by Sri Surya Prasad Mishra, Senior Advocate that the interim application(s) bein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the Appellate Authority dated January 7, 1991. The said stay order of the High Court cannot have the effect of reviving the proceedings which had been disposed of by the Appellate Authority by its order dated January 7, 1991. While considering the effect of an interim order staying the operation of the order under challenge, a distinction has to be made between quashing of an order and stay of operation of an order. Quashing of an order results in the restoration of the position as it stood on the date of the passing of the order which has been quashed. The stay of operation of an order does not, however, lead to such a result. It only means that the order which has been stayed would not be operative from the date of the passing of the stay order and it does not mean that the said order has been wiped out from existence. This means that if an order passed by the Appellate Authority is quashed and the matter is remanded, the result would be that the appeal which had been disposed of by the said order of the Appellate Authority would be restored and it can be said to be pending before the Appellate Authority after the quashing of the order of the Appellate Authority. The sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which finally ended up in upholding of its validity. Hence, there was no question of the assessee waiting for the determination and the turnover as there was no dispute on that aspect. The fact that appellants questioned the constitutional validity of the charging provision cannot be equated with a dispute whether the freight paid would also form part of the sale amount. It was a highly debated dispute whether price amount would envelope the freight charges paid by the dealer and until the controversy was resolved by the Court in Hindustan Sugar Mills Vrs. State of Rajasthan, (1978) 4 SCC 271 the dealers were justified in excluding the freight charges from sale price. It was for that reason the Constitution Bench refrained from mulcting the taxpayer with liability to pay interest additionally. Appellants in these cases have never disputed that they are liable to pay tax on the turnover under Section 6-B of the Act even while they focussed on the vires of that provision. 4.8. Since this Court held that the State had no jurisdiction to levy entry tax on the goods brought into local area from outside but not manufactured/produced within the State of Odisha in Reliance Industries Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st/penalty inasmuch as this Court while delivering Judgment in Reliance Industries Ltd., (2008) 16 VST 85 (Ori) bestowed on the statutory authority to examine/ scrutinize the transactions falling within the scope of what has been expounded in paragraph 30 ibid. 4.12. Sri Sanjiv Udgata, learned Advocate posed that when this Court following interim Order dated 03.02.2010 passed in consideration of I.As. in S.L.Ps. filed by the State of Odisha disposed of writ petition of the petitioner(s) questioning validity of the very levy of entry tax under the OET Act, the State of Odisha in certain cases having not preferred appeal before the Supreme Court, the same cannot be said to have revived for taking action to levy interest on the basis of Order dated 28th March, 2017 of Division Bench of the Supreme Court after declaration of law in Nine-Judge Bench of said Hon ble Court in the case of Jindal Stainless Ltd., (2016) 11 SCALE 1 = 2016 AIR SCW 5617 = (2017) 12 SCC 1. 4.13. Ms. Charanya Lakshmikumaran, learned Advocate supporting the arguments of other counsel as discussed above, supplemented by saying that certain matters being disposed of by the Supreme Court along with other batch of cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion in Gujarat Urja Vikas Nigam Ltd. Vrs. Amit Gupta, (2021) 7 SCC 209 that textually similar language in different enactments has to be construed in the context and scheme of the statute in which the words appear. The meaning and content attributed to statutory language in one enactment cannot in all circumstances be transplanted into a distinct, if not, alien soil , Sri Dwivedi opposed the concept of liberal approach as put forth in the context of condonation of delay regard being had to the language employed in the Limitation Act, 1963 vis- - vis the Land Acquisition Act, 1894, while conceiving the meaning of sufficient cause vide Basawaraj Vrs. Land Acquisition Officer, (2013) 14 SCC 81 and Benarsi Das Saraf Vrs. Dalmia Dadri Cement, AIR 1959 P H 232. 5.3. Arguing further it is submitted that a purposive interpretation, depending both on the text and the context in which the provision was enacted, must, be adhered to: Vide Arcelormittal India (P) Ltd. Vrs. Satish Kumar Gupta, (2019) 2 SCC 1; Shailesh Dhairyawan Vrs. Mohan Balkrishna Lulla, (2016) 3 SCC 619; Periyar Pareekanni Rubbers Ltd. Vrs. State of Kerala, (2008) 14 SCC 704; CIT Vrs. Calcutta Knitwears, (2014) 6 SCC 444. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the party obtains an order granting interim protection to it. While there is an element of finality in the case of a final adjudication by a competent court insofar as that Court is concerned, an interim order can be vacated at any stage. The interim order may not even prevent a prudent party from paying the charges according to the revised tariffs if it does not propose to take any chance and suffer recovery of an additional amount on account of the non- payment of the dues by the date stipulated for the purpose. 5.7. It is also submitted that the interest being automatic and levied by operation of law, in view of Pepsico (India) Holding Vrs. Commissioner Trade Tax, (2011) 13 SCC 68, interim order during pendency of dispute may not be construed as sufficient cause which prevented the petitioner from discharging tax liability. It is argued that in order to avoid levy of interest, full taxes should have been deposited. Under such premise, it cannot be said that the petitioner(s) was prevented from payment of full tax due as per return and the non-payment can very well be said that it is without sufficient cause . Consideration of arguments of respective parties: 6. From the facts n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 786 laid down with respect to judgment in rem as follows: 24. P. Ramanatha Aiyar s Advanced Law Lexicon (3rd Edn., Wadhwa Nagpur) describes an in rem proceeding as follows: In rem. adj. [Latin against a thing ] Involving or determining the status of a thing, and therefore the rights of persons generally with respect to that thing. Also termed (archaically) impersonal. (Black 7th Edn., 1999) An action in rem is one in which the judgment of the Court determines the title to property and the rights of the parties, not merely as between themselves, but also as against all persons at any time dealing with them or with the property upon which the Court had adjudicated. R.H. Graveson, Conflict of Laws 98 (7th ed. 1974). Against the king; against the property, not against a person. This term is derived from the Roman law, but is not used in English law in precisely the same sense as in that law. Indeed, Bracton, limits proceedings in rem to actions to obtain possession of res by which he understood real actions; (Bigelow on Estoppel 42, 43.) A proceeding in rem is a proceeding instituted against a thing, and not against a person. A proceeding in rem, in a strict sense, is one taken direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us in personam. According to its literal meaning jus in rem is a right in respect of a thing, a jus in personam is a right against or in respect of a person. In modern legal terminology a right in rem, postulates a duty to recognise the right imposed upon all persons generally, a right in personam postulates a duty imposed upon a determinate person or class of persons. A right in rem is therefore protected against the world at large; a right in personam against determinate individuals or persons. An action to enforce a jus in personam was originally regarded as an action in personam and an action to enforce a jus in rem was regarded as an action in rem. But in course of time, actions in rem and actions in personam acquired different content. When in an action the rights and interest of the parties themselves in the subject- matter are sought to be determined, the action is in personam. The effect of such an action is therefore merely to bind the parties thereto. Where the intervention of the Court is sought for the adjudication of a right or title to property, not merely as between the parties but against all persons generally, the action is in rem. Such an action is one brought in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te the impact and the competence of the Taxing Authority in initiating action for recovery of taxes. However, so far as levy of interest is concerned the same depends on the language of the statutory provision. Relevant provisions of the OET Act and rules framed thereunder: 8. To appreciate arguments and counter-agruments of respective parties following provisions contained in Sections 3 and 7 of the OET Act are relevant to be taken note of: Section 3: (1) There shall be levied and collected a tax on entry of the scheduled goods into a local area for 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. Section 7: (1) Every regi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er VAT Act and the Rules made thereunder are required to be submitted by the dealer: Provided that where the dealer is not registered under VAT Act and the Rules, such return shall be submitted to the Deputy/Assistant Commissioner/ Sales Tax Officer of the Circle/assessment unit, under whose jurisdiction the principal place of business or place of business, as the case may be, of the dealer is situated. (b) The revised return under sub-section (2) of Section 7 of the Act shall be in Form E3 and shall be submitted before the date on which the return for the succeeding tax period becomes due. (c) From such date and in such manner as may be specified by the Commissioner by notification, the return required to be furnished under clause (a) or (b) of sub-rule (1), sub-rule (2) and sub-rule (2A) may also be filed electronically. *** (d) The Commissioner may, by notification specify the date from which all or a certain class of dealers shall, subject to such conditions as may be specified, submit return through the electronic mode only. (e) Every dealer who claims to have made sales against Declarations in Form E-15 or E-16 or both shall, in respect of such claim, furnish a statement in F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provision, i.e., Section 3 of the OET Act gives clear indication that whereas the entry tax is exigible on entry of goods specified in the Schedule appended to the OET Act into the local area for consumption, use or sale therein and return disclosing tax payable is required to be furnished as per sub- section (1) of Section 7. It is provided under sub-section (10) thereof that each and every return is to be scrutinized by the Assessing Authority. If mistake is detected as a result of scrutiny, the Assessing Authority is vested with power to proceed with the matter against the dealer as provided under sub-section (11). Thus, it is explicit that detection of mistake in return upon scrutiny triggers action against the dealer asking it to make payment of the extra amount of tax along with the interest as per the provisions of this Act . The OET Act provides for levy of interest under sub-section (5) of Section 7. No other provision empowering Authority to levy interest is brought to the notice of this Court by any of the parties. Issue of Notice in Form E-24 prescribed under Rule 10(6)(b) of the OET Rules directing the petitioner to deposit less payment of tax as detected: 10. In the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same and not realize entry tax on such goods . Though said interim order suffered modification vide Order dated 03.02.2010 by directing the dealers to deposit 1/3rd of the tax liability shown in the returns, the Assessing Authorities have not taken up each and every return for scrutiny. 10.3. Therefore, it is not justified on the part of the Assessing Authorities to issue demand notice(s) in Form E-24 prescribed under Rule 10(6)(b) of the OET Rules as a result of scrutiny under sub-sections (10) and (11) of Section 7 of the OET Act that too in violation of observations made in Toyo Engineering (supra). 10.4. Following the ratio of Toyo Engineering (supra), this Court would have to remit the matter to the Assessing Authority, but considering that the same would not serve fruitful purpose at this distance of time holds that issue of notice in Form E-24 under Rule 10(6)(b) of the OET Rules is not in conformity with the statutory requirement. Since the balance amount of tax due as per disclosure made in the return(s) is known to the petitioner, setting aside the notice in Form E-24 and remanding for computation of tax liability to the Taxing Authority would enure to the benefit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Act, 2004. Section 2(47) of the said OVAT Act defines the term SELF-ASSESSMENT to mean a true and correct determination of net tax liability by a dealer in relation to any tax period . Thus, the dealer is required by law to calculate his own tax liability and is given a time-frame to pay the same along with the return. It is quite possible that by the ultimate assessment the tax due may vary be more or even less but at the stage of making of the return, obligation has been cast on the dealer to pay the admitted tax. Under the scheme of the OET Act, tax is due at the time the return is due as per Section 7(1) read with Rule 10(1), i.e., within twenty-one days of the date of expiry of the month or quarter, as the case may be, to which the return relates. It is, therefore, manifest that the liability is to be saddled with interest under Section 7(5), because of failure to make the payment of the tax due at the time of the submission of the return(s); and as provided in sub-rule (4) of Rule 10 the interest shall be paid at the time of making payment of tax payable . 11.4. Therefore, considering that the tax has become due as per returns, no sooner did the Hon ble Supreme Court prono ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here was sufficient cause for the petitioners for non-deposit of tax at the relevant point of time. In other words, there was no failure to pay the amount of tax due as per the return without sufficient cause . 12.3. The expression sufficient cause is adequately elastic to enable the Court to apply the law in a meaningful manner which subserves ends of justice that being the life purpose for the existence of the institution of the Court. Refer: GRID Co. Vrs. NTPC, 2003 (II) OLR 559. 12.4. In Janardan Mohapatra Vrs. Brajabandhu Mohapatra, 2008 (II) OLR 573 (Ori) the expression sufficient cause contained in Section 5 of the Limitation Act, 1963 is adequately flexible and widely elastic to enable the Courts to apply law in a meaningful manner. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and defeat the cause of justice. So trial court should effectively exercise its jurisdiction in a manner so as to justify the ends of justice as has been described as the Life purpose for the existence of the institution of Courts . Apart from other considerations it must be grasped that judiciary is respected not on account of its power to legali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the purpose of enacting such a law does not stand frustrated. The test is whether or not a cause is sufficient to see whether it could have been avoided by the party by the exercise of due care and attention. Reference may be had to Balwant Singh Vrs. Jagdish Singh, 2010 AIR SCW 4848 and State of Gujarat Vrs. Karnavati Veneers Pvt. Ltd., (2014) 68 VST 367 (Guj). 12.8. The meaning of sufficient is adequate or enough , inasmuch as may be necessary to answer the purpose intended. Therefore, word sufficient embraces no more than that which provides a platitude which when the act done suffices to accomplish the purpose intended in the facts and circumstances existing in a case and duly examined from the view point of a reasonable standard of a cautious man. Sufficient cause means that the party had not acted in a negligent manner or there was a want of bona fide on its part in view of the facts and circumstances of a case or the party cannot be alleged to have been not acting diligently or remaining inactive . While deciding whether there is sufficient cause or not, the court must bear in mind the object of doing substantial justice to all the parties concerned and that the technic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the principle of res judicata to the decisions in the two proceedings, if the Court finds in the proceeding under Order 9, Rule 7, Code of Civil Procedure the lighter burden not discharged, it must be a fortiori bar the consideration of the same matter in the later proceeding under Order 9, Rule 13, C.P.C. where the standard of proof of that matter is higher. 12.11. So understood the conceptual recognition of the term sufficient cause in different contexts, it is necessary to bear in mind that there is an element of bona fide reasonable approach involved in said expression. For doing substantial justice, technical niceties are to be eschewed. In order to say that there is lack of sufficient cause, negligence, indolence and inaction attributable to the petitioner are factors for consideration. The petitioner, in the instant case, has shown bona fide cause which prevented it to discharge entire tax liability as disclosed to be due in respect of transactions falling within the scope of law laid down in paragraph 30 of the Judgment in Reliance Industries Ltd., (2008) 16 VST 85 (Ori) . The Assessing Authorities by issuing notice in Form E-24 straightway appeared to have scrutinized ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw and not adjectival law. 13.1. It has been re-stated vide Shree Bhagwati Steel Rolling Mills Vrs. Commissioner of Central Excise, (2016) 36 GSTR 222 (SC) that a Constitution Bench decision in VVS Sugars Vrs. Government of Andhra Pradesh, (1999) 114 STC 47 (SC) has held as follows: This Court in India Carbon Ltd. Vrs. State of Assam, (1997) 106 STC 460 (SC) has held after analysing the Constitution Bench Judgment in J.K. Synthetics Ltd. Vrs. Commercial Tax Officer, (1994) 94 STC 422 (SC) that interest can be levied and charged on delayed payment of tax only if the statute that levies and charges the tax makes a substantive provision in this behalf. There being no substantive provision in the Act [Andhra Pradesh Sugarcane (Regulation of Supply and Purchase) Act, 1961] for the levy of interest on arrears of tax that applied to purchases of sugarcane made subsequent to the date of commencement of the amending Act, no interest thereon could be so levied, based on the application of the said Rule 45 or otherwise. 13.2. In identical situation in the case of Food Corporation of India Vrs. State of Haryana, (2000) 119 STC 1 (SC) it has been observed as follows: *** From the above extract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tuation that arose in the present case, the State of Odisha is liable to be compensated. It may be apt to reiterate that the Hon ble Supreme Court granted stay and directed the petitioner(s) to deposit 33- 1/3% of the amount of tax due while filing returns, the same was required to be obliged and in fact from undeniable pleading it emanated that the dealers in Odisha have complied with the terms of interim order of the Supreme Court as also orders passed in writ petition by this Court in consonance with such interim order. 14.1. Therefore, since 2010 when the interim order was passed by the Supreme Court in the interlocutory applications filed by the State of Odisha till 2017, when the issue(s) raised in the matter got crystallized, there was no occasion for the petitioner(s) to deposit total tax due for the Supreme Court in the interim Order dated 03.02.2010 categorically stated that such deposit would not be treated as tax . It is the admission of the petitioner that after pronouncement of Order dated 28.03.2017, it has deposited balance tax and this Court in the Order dated 24.04.2019 in S.S. Steeloy Pvt. Ltd. Vrs. Commissioner of Commercial Taxes, Odisha and Others, W.P.(C) No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l at the end of the appeal. In South Eastern Coalfields Ltd. Vrs. State of M.P. Ors., (2003) 8 SCC 648, this Court while dealing with interim orders granted in favour of any party to litigation for the purpose of extending protection to it, effective during the pendency of the proceedings, has held that such interim orders, passed at an interim stage, stand reversed in the event of the final decision going against the party successful in securing interim orders in its favour; and the successful party at the end would be justified in demanding compensation and being placed in the same situation in which it would have been if the interim order would not have been passed against it. The successful party can demand: (a) the delivery to it of benefit earned by the opposite party under the interim order of the High Court, or (b) compensation for what it has lost, and to grant such relief is the inherent jurisdiction of the Court. In our opinion, while granting an order of stay under Order 41 Rule 5 of the CPC, the appellate court does have jurisdiction to put the party seeking stay order on such terms as would reasonably compensate the party successful at the end of the appeal in so far ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e parties themselves, as distinguished from that which the law would prescribe in the absence of an explicit agreement. Legal interest: A rate of interest fixed by statute as either the maximum rate of interest permitted to be charged by law, or a rate of interest to be applied when the parties to a contract intend an interest to be paid but do not fix the rate in the contract. Even in the latter case, frequently this rate is the same as the statutory maximum rate permitted. Term may also be used to distinguish interest in property or in claim cognizable at law in contrast to equitable interest. 14.5. This Court in aforesaid IDL Industries Ltd. (supra) laid down as follows: 53. Articles 226 and 32 provide for safeguarding the provisions of law, and give an extraordinary power to look to equitable considerations. While exercising these powers, the courts have in appropriate cases imposed conditions for payment of interest on the conditional amounts directed to be paid from the date of payment provided the assessee has got a decision in his favour. Reference may be made to Kuil Fireworks Industries v. Collector of Central Excise, 1997 (95) ELT 3 (SC), wherein the court has granted in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its power under Articles 226 and 227 of the Constitution of India wherein while directing the appellants to deposit the amount quantified therein, the High Court also issued a direction to the respondent State that it should refund the amount with interest at the rate of 18% per annum in the event of the appellants succeeding in the second appeal. This order is definitely not one made under the provisions of the Act. The respondent State which took benefit of the said order and retained the amount deposited by the appellant, cannot now be permitted to say when it comes to refund direction issued by the High Court in its order dated 15.3.1995 will not be binding on it and it is only the provisions of the statute that will bind. As noted above, it is not by invoking the provisions of the Act, the deposit was directed to be made by the High Court, hence, any direction made while making an order under Articles 226 and 227, to deposit any sum of money will be governed by the conditions imposed in the order directing such deposit. On the contrary if any such condition as to the interest had not been made by the High Court while directing the deposit of the amount then it could be said th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s silent about the rate of interest and there is no express bar for payment of interest, any delay in paying the compensation or the amounts due, would attract award of interest at a reasonable rate on equitable grounds. It is precisely for this reason that paragraph 9 of the decision in Godavari Sugar Mills Ltd. (supra) accepted the submission made by the learned counsel for the respondents and confined the rate of interest to the prescription made in the statute. The award of interest at a rate in excess of what was prescribed by the statute was only for a period beyond 20 years where the matter was not strictly covered by the statute and as such it would be in the realm of discretion of the Court . It must also be noted here that the inordinate delay of up to 17 years in making refunds was a special circumstance when this Court was persuaded to accept grant of interest at the rate of 9 per cent per annum in Sandvik Asia Ltd., (2006) 2 SCC 508 . Even while doing so, the observations made by this Court in Paragraph 48 of the decision are quite clear that the award of interest in refund and amount must be as per the statutory provisions of law and whenever a specific provision has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss payment than the amount admitted to be payable by him in its return, he is not justified to issue notice in Form E-24 and consequently demand notice in Form E-8 raising demand of Rs.13,33,115/-. According to the assessing officer, as per the figures furnished in the return the tax due for the period under consideration comes to Rs.13,33,115/- as various deductions claimed by the dealer, according to the assessing authority, is not admissible/allowable. In that event, the assessing officer shall issue a show cause, asking the dealer to pay the amount due on the return in Form E-22 and E-23 as provided under Rule 10(5). 17. In view of the above, the notice issued in Form E-24 and demand notice in Form E-8 under annexure-3 series are quashed. Liberty is given to the assessing authority to proceed against the petitioner in accordance with law, if he is of the opinion that the tax due on the return as furnished by the petitioner is not paid by it due to wrong/excessive claim of deduction(s) in the return. 15.1. This Court takes note of the principle as enunciated in the case of Chowhan Machinery Mart Vrs. State of Odisha, (2009) 19 VST 178 (Ori). Paragraphs 22-24 of said reported Jud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 28th March, 2017 in the cases of State of Odisha Vrs. Reliance Industries Limited, etc., etc. being SLP(C) Nos.14454- 14778/2008 pursuant to Nine-Judge Bench decision rendered in Jindal Stainless Ltd. Vrs. State of Haryana, 2016 AIR SCW 5617 = (2016) 11 SCALE 1 = (2017) 12 SCC 1, the Revenue seems to be not remediless in view of provision contained in sub-section (3) of Section 10 which stands thus: (3) Where any order passed by the Assessing Authority in respect of a dealer for any period is found to be erroneous or prejudicial to the interest of revenue consequent to, or in the light of, any judgment or order of any Court or Tribunal, which has become final and binding, then, notwithstanding anything contained in this Act, the Assessing Authority may proceed to reassess the tax payable by the dealer in accordance with such judgment or order, at any time within a period of three years from the date of the judgment or order. 15.3. However, taking cognizance of the chequered career of the OET Act, 1999 since 2002, when the Judgment in Indian Metals Ferro Alloys Corporation of Orissa (supra) was delivered, it is but mete and proper to issue direction to the petitioner(s) to pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 2017 and batch of matters. 17.1. Considering the peculiar nature of the lis, such balance entry tax (2/3rd of tax due which remained unpaid during 2010-17) can be determined by the petitioner(s) as per definition of the term SELF-ASSESSMENT in Section 2(47) of the OVAT Act read with Section 2(q) of the OET Act taking into account the figures disclosed in the returns and deposited by the petitioner(s) within a period of sixty days from today, if not already deposited. In the event of difficulty in payment of such balance amount, the Commissioner of Sales Tax may grant appropriate instalment(s) on being approached by the petitioner(s). 17.2. To strike a balance between deprivation of the State of Odisha to utilize 2/3rd of the amount of tax since September, 2009 till March, 2017 at the relevant point of time and non-payment of full amount of tax liability disclosed in the return(s) during this period by the petitioner, the aforesaid unpaid entry tax, for the period during which interim Order dated 30.10.2009 as modified vide Order dated 03.02.2010 passed by the Supreme Court of India in I.A. Nos. 327-651 filed by the State of Odisha in its appeals being SLP(C) Nos.14454-14778/2008 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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