Orissa High Court
M/S. Narayan Coconut Store vs State Of Odisha And Others .... Opposite ... on 21 March, 2022
Author: R.K.Pattanaik
Bench: R.K.Pattanaik
IN THE HIGH COURT OF ORISSA AT CUTTACK
OJC No.9986 of 2001
M/s. Narayan Coconut Store. .... Petitioner
Sakhigopal, Puri
Mr. P.K. Jena, Advocate
-versus-
State of Odisha and others .... Opposite Parties
Mr. P.K. Muduli, AGA
CORAM:
THE CHIEF JUSTICE
JUSTICE R.K.PATTANAIK
ORDER
Order No. 21.03.2022
Dr. S. Muralidhar, CJ.
04. 1. The challenge in the present petition is to a notification dated 14th August, 1991 issued by the Finance Department Government of Odisha rescinding an earlier notification dated 8th December, 1966 under Section 8(5) of the Central Sales Tax Act, 1956 ('CST Act').
2. While directing issue notice in the present Petition on 3rd September, 2001, this Court directed that no coercive action will be taken against the Petitioner in relation to the demand made by the Sales Tax Officer consequent upon the assessment order dated 23rd March, 2001 for the period 1997-98.
3. The back ground to the present petition is that Petitioner is a partnership firm engaged in the business of purchasing and selling coconuts to persons mostly outside the Odisha. The Petitioner was paying purchase tax under Section 3-B of the Odisha Sales Tax Act, 1947 (OST Act) on the purchase value of the coconuts and was not being assessed under the Central Sales Tax Act, 1956 (CST Page 1 of 4 Act) by virtue of a notification dated 8th December,1966, which was issued by the State Government under Section 8(5) of the CST Act, directing that in respect of all declared goods sold in course of inter-State trade or commerce, no tax under the CST Act shall be payable by any dealer having his place of business in the State provided that he is able to show that tax has been levied and collected in respect of the sale or purchase of such declared goods under Section 5(i) of the OST Act.
4. The validity of the above notification came up for consideration first in Orissa Hides Trading Company v. Sales Tax Officer 1975 335 STC 232 (Ori). It was held by a Division Bench of this Court that a statutory notification under Section 8 (5) of the CST Act cannot be permitted to run counter to Section 15(b) of the CST Act in terms of which a tax collected under the State Act was to refunded once same goods sold in course of inter-State trade or commerce and assessed to tax under the CST Act. The decision in Orissa Hides was reiterated by another Division Bench in K. Narayana Kumandan Sons and Co. v. Sales Tax Officer 41 (1975) CLT 1042 as well as Subudhi Krushna Murty v. Sales Tax Officer (1975) 36 STC 419 (Ori).
5. The correctness of the above decisions came up for consideration before a Full Bench of this Court in Kamal Kumar Agarwal v. Sales Tax Officer (1980) 46 STC 384 (Ori). The Full Bench disagreed with the above decisions and held that it was perfectly open to the State Government to issue a notification under Section 8(5) CST Act exempting declared goods sold in the course of inter-State sale from CST.
Page 2 of 46. Unmindful of the Full Bench decision, the Orissa Government again rescinded the 1966 notification on 23rd April, 1991. This rescinding of the notification in the above manner was again challenged in another writ petition was came to be allowed by a Division Bench of this Court in Jankiram Jain v. State of Odisha (1991) 83 STC 169 (Ori).
7. Notwithstanding the decision in Jankiram Jain, the Government of Orissa again rescinded the 1966 notification on 14th August, 1991 and applying the said rescinding of notification the impugned assessment order has been passed against the present Petitioner. Therefore, the Petitioner has challenged both notifications dated 14th August, 1991 and the assessment order dated 23rd March, 2001.
8. Despite notice having been issued in the petition way back on 3rd September 2001, i.e. more than 20 years ago, no counter affidavit has been filed by the State Government till date.
9. With the Full Bench of this Court in Kamal Kumar Agarwal v. Sales Tax Officer (supra) having already settled the issue, it was erroneous on the part of the State Government in the first instance to rescind the notification of 1966 which in turn led to the second decision in Jankiram Jain (supra). Despite the said decision the Government of Odisha has again rescinded the 1966 notification on 14th August, 1991. This too, therefore, has to meet the same fate as the earlier attempted rescinding of the 1966 notification. Applying the decision of the Full Bench in Kamal Kumar Page 3 of 4 Agarwal (supra) and the Division Bench of this Court in Jankiram Jain (supra) this Court quashes the notification dated 14th August, 1991 of the Finance Department rescinding the earlier notification dated 8th December, 1966 under Section 8 (5) of CST Act. As the consequence, the impugned assessment order dated 23rd March, 2001 is also quashed.
10. The matters are remanded to the STO/Assessing Authority in each of the cases for a fresh assessment order to be passed in the light of the above decision. The matter shall be placed before the concerned STO/AA on 2nd May, 2022 for directions.
11. The petitions are disposed of in the above terms.
12. An urgent certified copy of this order be granted as per rules.
(Dr. S. Muralidhar) Chief Justice (R.K. Pattanaik) Judge TUDU/kabaita Page 4 of 4