Orissa High Court
M/S. The Snow White Trading Corporation vs State Of Orissa ... Opp. Party on 31 March, 2014
Author: I. Mahanty
Bench: I. Mahanty
HIGH COURT OF ORISSA: CUTTACK
STREV No. 57 of 2013
In the matter of an application under Section 19(1) of the Orissa Entry
Tax Act, 1999.
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M/s. The Snow White Trading Corporation ... Petitioner
-Versus-
State of Orissa ... Opp. party
For Petitioner : Mr. N.Paikaray
For opp. party : Mr. M.S. Raman,
Standing Counsel (Sales Tax)
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P R E S E N T:
THE HONOURABLE SHRI JUSTICE I. MAHANTY
AND
THE HONOURABLE SHRI JUSTICE B.N.MAHAPATRA
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Date of Judgment : 31.03.2014
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B.N.Mahapatra, J In this Sales Tax Revision Petition challenge has been
made to the validity, maintainability and sustainability of the order dated
02.11.2012 passed by the Division Bench of the Orissa Sales Tax
Tribunal, Cuttack in S.A. No.53(ET) of 2011-12 pertaining to assessment
year 2003-04 with a prayer for quashing the said order of the learned
Tribunal confirming the order of assessment dated 09.03.2007 passed by
the Sales Tax Officer and the First Appellate Authority dated 24.03.2011.
2. The petitioner's case in a nutshell is that it is a
proprietorship concern and during the year 2003-04 had purchased
2
lubricants which were scheduled goods falling within the scope of Entry
40 of Part-I of schedule appended to the Orissa Entry Tax Act, 1999 (for
short, "OET Act"). All the purchases in question were claimed to have
been made from the registered dealers, namely, M/s Valvoline Cummins
Ltd., Cuttack (RC No.CUIC 2243); M/s Gulf Oil India Ltd., Cuttack (CUIC
1716); M/s Penzoil Quaker State (I) Ltd., Cuttack (CUIC 1239) ; and M/s
Lubrico, Bhubaneswar (BH I 895). The total purchases from those
registered dealers were claimed to be Rs.99,84,912/-. The assessment
was completed under Section 7 of the OET Act. In the assessment order,
it has been observed that the petitioner has not paid the Entry Tax on
the turnover of purchases to the tune of Rs.1,00,29,806/-. Being
aggrieved at the assessment order, the petitioner preferred first appeal
before the Joint Commissioner of Sales Tax, who passed the ex parte
order. The petitioner carried further appeal to the Odisha Sales Tax
Tribunal (for short, "Tribunal"), who upon hearing the same set aside the
order passed in First Appeal and directed the First Appellate Authority to
hear the matter afresh. Pursuant to the remand order of the learned
Tribunal, the petitioner appeared before the First Appellate Authority and
contended that it was not liable to pay Entry Tax as entry tax had been
collected as handling charges etc. in the sale invoices. Reliance was also
placed on Form E1 produced in support of the claim that the goods
purchased by the petitioner have already suffered entry tax earlier.
However, by order dated 24.03.2011 learned First Appellate Authority
dismissed the appeal and upheld the levy by holding that there is no
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mention on the invoices that entry tax has been collected from the
petitioner by sellers of the goods. Being aggrieved, petitioner carried the
matter before the Tribunal in Second Appeal, which was registered as SA
No.53(ET)/2011-12. The learned Tribunal vide its order dated
02.11.2012 dismissed the Second Appeal holding that the action of the
learned 1st Appellate Authority is appropriate and legal and there is no
justifiable reason to interfere with the order of the learned JCST, which is
found to be lawful. Hence, the present Sales Tax Revision Petition.
3. Mr.N.Paikaray, learned counsel appearing on behalf of the
petitioner submitted that the impugned order of assessment dated
09.03.2007 passed under Section 7 of the OET Act is bad, unjust and
illegal. Since no statutory notice was issued and served on the petitioner
for the purpose of assessment under the Entry Tax Act, the order of
assessment passed under Annexure-1 is void ab initio and non est in law.
The petitioner has purchased the scheduled goods from four
registered dealers out of whom three registered dealers were carrying on
business in Cuttack Municipal Corporation. As there is no entry of goods
from outside the "local area", the dealer is not liable to pay entry tax on
the scheduled goods purchased from the three registered dealers of
Cuttack. Under Section 3 of the O.E.T. Act, which is a charging section,
the dealer in scheduled goods is exigible to pay entry tax on the entry of
scheduled goods or bringing such goods into the local area. Reading of
Section 2(d) of the OET Act makes it clear that it is the entry of
scheduled goods into a local area from any place outside that local area
4
or any place outside the State for consumption, use or sale therein which
would be liable to levy of entry tax. Since the selling dealers were
registered within the jurisdiction of the first appellate authority as well as
Sales Tax Officer, Cuttack-I, Central Circle where the petitioner is
registered, inquiry could have been conducted to verify whether entry tax
had already been suffered in their hands earlier. While filing the Second
Appeal, the dealer /petitioner filed an application for issue of summons
to the registered dealers, from whom scheduled goods were purchased, to
call for the connected records of selling registered dealers to verify and
examine the correctness of the claim of the dealer-petitioner. To prove
the bona fide of the petitioner's contention, the petitioner filed a copy of
the order of assessment passed in respect of one of the sellers where
entry tax has been paid by the aforestated seller. Before the learned
Tribunal, the petitioner, inter alia, filed photocopy of the sale invoices
dated 30.05.2003 and 09.07.2003 issued by M/s Lubrico, wherein it has
been stated by the seller in the body of the sale invoice that inclusive of
tax, which implies that the sale price was inclusive of entry tax,
inasmuch as OST and surcharge have been charged separately in body of
the sale invoice.
4. It was further submitted that under Rule 93(I) of the OST
Rules, 1947 "lubricants" are declared to be taxed at the point at which
the first of such sales is effected by a dealer. In the instant case, first sale
is effected by four dealers registered in the State. Tax liability rests on
these registered selling dealers under the OST Act. Under Section 3 of
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the OET Act, the liability to pay tax was attached with them inasmuch as
they had bought the lubricants into the "local area" from "outside the
local area" by way of stock transfer. Since the selling dealers have made
compliance of their statutory liability by paying the entry tax, no liability
under the OET Act can be fastened with the petitioner. There has been
misconstruction of taxable event and improper selection of taxable
person. It is asserted by the petitioner that the entry tax has been paid
by the selling dealer as per the provisions of OET Act, more particularly,
the charging section and hence, onus to disprove shifts onto the
Revenue, which has not been discharged by the authorities below.
Therefore, the orders of the authorities below are liable to be held
perverse.
5. Mr. Raman, learned Standing Counsel for the Sales Tax
Department supported the order of the learned Tribunal as well as the
orders of the first appellate authority and assessing authority.
6. In the present case, the petitioner is a dealer, inter alia, dealing
with lubricants which are scheduled goods and liable to be taxed under the
OET Act. He claims to have purchased lubricants worth Rs.99,84,912/- from
four registered dealers belonging to Cuttack and Bhubaneswar as per the
details given below:
(i) M/s. Valvoline Cummins Ltd.,
Cuttack (RC No.CUIC 2243) Rs.15,29,917/-
(ii) M/s. Gulf Oil India Ltd.,
Cuttack (RC No.CUIC 1716) Rs.71,74,941/-
(iii) M/s. Penzoil Quaker State (I) Ltd.,
Cuttack (RC No. CUIC 1239) Rs.12,10,569/-
6
(iv) M/s. Lubrico,
Bhubaneswar (RC No.BH I 895) Rs.69,485/-
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Total: Rs.99,84,912/-
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7. Before the 1st appellate authority, the petitioner produced the
purchase invoices issued by the above mentioned four registered dealers from
whom the petitioner has purchased lubricants in support of its claim that
selling dealers have collected entry tax from him. The learned first appellate
authority on examination of such purchase invoices, observed as follows:
".... Thus, there is no mention on the invoices issued
by the above dealers that entry tax has been collected
from the dealer appellant by the sellers of goods.
As per sub Rule 5 of Rule 3 of the O.E.T. Rules, 1999
in order to prove that goods have already been
subjected to entry tax or that the entry tax has already
been paid under the Act for such goods and no tax
shall be further levied under the O.E.T. Rules in
respect of such goods purchased by a dealer, the
dealer is required to furnish a declaration in Form E-1.
The dealer appellant has furnished declaration in form
E-1 but bill/invoices No. and date and quantity and
entry tax paid as per the invoices in column No.3,4
and 6 respectively have not been filled properly and
correctly as prescribed U/r. 3(5) of the O.E.T. Rules to
prove that no tax shall be levied further under this
Rule in respect of the goods purchased by him. Hence
this declaration furnished in form E-1 is not
acceptable. It is apparently clear from the above
discussion that the goods i.e. lubricants purchased by
the dealer-appellant from the dealers of Orissa are not
entry tax paid goods. Hence, I am not inclined to
interfere in the order of assessment passed by the
learned S.T.O. The order of assessment is confirmed."
8. The learned Tribunal in second appeal inter alia has observed
as follows:
"3. In the second journey to the Tribunal, the
learned Advocate for the appellant filed Xerox copy of
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statement of purchase and prayed for verification of the
same by the lower forum. The State has also filed cross
objection and submitted the order of learned JCST to
be just and proper. The revenue has also pressed that
the dealer failed to substantiate his claim u/r.3(5) of
the OET Rules by submitting E1 form and that the
forms produced as having deficiencies in Col. 3, 4 & 6.
4. Heard both the parties. It is evident from the
order of the first appellate authority that in compliance
to the order of this Tribunal he has verified the details
as produced before him i.e. the purchase invoices of
the following dealers.
(i) M/s. Golf Oil India Ltd.
(ii) M/s. Pennzoil Quaker State (I) Ltd.
(iii) M/s. Lubrico, Bhubanewar
(iv) M/s. Valvolin Cummins Ltd.
After due examination learned JCST disallowed the
claim and did not accept the E1 form. So it is very
evident that he has duly acted upon the order of this
Tribunal.
5. In the second journey to the Tribunal, the
learned Counsel has also pressed for verification in
respect of the above four dealers which has already
been done. So, in our considered opinion the action of
the learned JCST is appropriate and legal and at this
point we do not find any justifiable reason to interfere
with the order of learned JCST. As such the impugned
order is found to be lawful."
9. In the present Tax Revision Petition, the petitioner has raised
the following questions of law:
A. Whether on the facts and in the circumstances of
the case, the order of the Tribunal is perverse and
not maintainable in the eye of law?
B. Whether the Tribunal is justified in upholding the
levy of Entry Tax on the scheduled goods purchased
inside the "local area" of Cuttack Municipal
Corporation particularly when there was no "entry
8
of goods" in terms of clause (d) of Section 2 of the
OET Act ?
C. Whether the Tribunal is justified in confirming the
levy of entry tax on the purchase of lubricants by
the petitioner from the registered dealers belonging
to Cuttack Municipal Corporation, particularly when
lubricants were never brought from outside the
"local area" into the "local area"
D. Whether the Tribunal is justified in fixing the entry
tax liability on the petitioner presuming that the
entry tax had not suffered earlier in the hands of the
sellers particularly when as per the provisions of
Section 3 of the OET Act the liability to pay entry
tax in the present facts and circumstances of the
case rests with the sellers who had bought the
scheduled goods into the "local area" inside the
State of Odisha for consumption, use or sale
therein?
E. Whether further levy of entry tax by the forums below
is maintainable in the eye of law, particularly when
entry tax has already suffered in the hands of the first
seller inside the State of Odisha is apparent, inasmuch
as when under Rule 93 I of OST Rules, lubricants are
declared to be taxed at the point when the first of such
sales is effected by a dealer?
F. Whether on the fact and in the circumstances of the
case, the charging section, i.e., Section 3 of the OET
Act had any application in respect of the purchases
made inside the State of Odisha, more particularly,
inside the "local area" as defined under the said Act ?
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G. Whether the order of assessment is ab initio void as no
statutory notice was ever issued or served on the
dealer for the purpose of assessment?
H. Whether the impugned levy of entry tax is without
jurisdiction and without any authority of law in respect
of the scheduled goods purchased within the "local
area" of Cuttack Municipal Corporation from the
sellers of the goods who are registered under the sales
tax Circle, where the petitioner is registered?
According to us, the above questions would not be proper
questions of law to be adjudicated in the case at hand.
10. The real questions of law which need to be answered in view of
various contentions taken before us are as follows:
(i) Whether entry tax can be levied on scheduled goods
purchased inside the local area from another registered
dealer of the same local area who brought the
scheduled goods into the local area ?
(ii) Whether under law it is obligatory on the part of a
dealer to furnish Form E-1 in respect of the goods
purchased by it from another registered dealers of the
same local area who brought the scheduled goods in
question into the local area ?
(iii) Whether to get the benefit from payment of entry tax in
respect of the scheduled goods purchased by a dealer
from another registered dealer(s) of the same local area,
who brought the said goods into the local area, the
dealer has to prove that its seller(s) have in fact paid
the entry tax ?
(iv) Whether furnishing of complete/defect free Form E-1
as prescribed under sub-rule (5) of Rule 3 along with
returns under sub-rule (1) of Rule 10 is mandatory for
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a dealer who brings the scheduled goods into the local
area to prove that the goods purchased by it have
already been subjected to entry tax or that the entry
tax has already been paid under the Act for such
goods?
(v) Whether non-furnishing of Form E-1, as prescribed
under sub-rule (5) of Rule 3 along with return under
sub-rule (1) of Rule 10, makes the dealer, who brings
the scheduled goods into the local area, liable to pay
the entry tax on scheduled goods purchased from
outside the local area ?
(vi) Whether a dealer who brought the scheduled goods
into the local area and has filed a defective Form E-1
can call upon the Department to summon or call for
the records of the selling dealer or any other person or
to conduct any inquiry to test the correctness of its
claim that the goods purchased by him has suffered
tax at the hands of any purported selling dealer of
outside the local area ?
11. To deal with question No.(i), it is necessary to know what is
contemplated in the charging section under the Entry Tax Act. Section 3 of
the Entry Tax Act is the charging section, the relevant portions of which are
reproduced below:
"3. Levy of Tax.--
(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 on different dates and different rates
may be specified for different goods and local areas
subject to such conditions as may be prescribed."
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xx xx xx
(2) The tax leviable under this Act shall be paid by
every dealer in scheduled goods or any other person
who brings or cause 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 Act 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 tax has been paid by any other
person or dealer under this Act."
12. Bare reading of the above provisions of Section 3 envisages that
there is a declaration of liability. It provides that there shall be levied and
collected tax on entry of scheduled goods into the local area for consumption,
use or sale therein. It further provides that the tax leviable under the Entry
Tax Act shall be paid by a dealer in scheduled goods or any other person,
who brings or causes to be brought into the 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.
The proviso says that no tax shall be levied under this Act on
the entry of scheduled goods into the 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 tax has been paid by any other
person or dealer under this Act.
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Further "entry of goods" as defined in Section 2(d) means entry
of goods into local area from any place outside that local area or any place
outside the State for consumption, use or sale therein.
13. The above statutory provisions make it clear that the incidence
of taxation is on entry of goods into the local area for use, consumption or
sale therein. The core of taxing statute is in the charging section and liability
to tax arises by virtue of charging section.
The rule of construction of charging section is that before taxing
any person, it must be shown that he falls within the ambit of charging
section by clear words used in the Section. No one can be taxed by
implication. Charging section has to be construed strictly. If a person has not
been brought within the ambit of charging section by clear words, he cannot
be taxed at all. (See Commissioner of Wealth Tax, Gujarat-III Ahmedabad vs.
Ellis Bridge Gymkhana, AIR 1998 SC 120].
14. Thus, while interpreting charging section of a taxing statute
utmost care should be taken to give proper meaning to the words of the
statute and the same should be construed strictly. Its construction cannot
be extended beyond the language used in the charging section.
15. In view of the above, we are of the considered opinion that no
entry tax can be levied on scheduled goods purchased inside the local area
from another registered dealer of the same local area who brought the
scheduled goods into the local area.
16. Question No.(ii) is whether under law it is obligatory on the part
of a dealer to furnish Form E-1 in respect of the goods purchased by it from
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another registered dealer of the same local area who brought the scheduled
goods in question into the local area.
17. Let us first see, who is liable to furnish Form E-1 as prescribed
under Rule 3(5) along with return under Rule 10(1) of the OET Rules. Rule
10(1) envisages that the return under sub-section (1) of Section 7 of the OET
Act shall be furnished in Form E3. In Form E3, a dealer has to
furnish/declare various information under different heads. Column 8 of the
return Form E3 requires a dealer to declare the "purchase value of scheduled
goods brought into the local area in respect of which entry tax has been levied
at earlier stage (details to be furnished in Form E1)".
The information required to be declared under column 8 is in
consonance with the proviso to sub-section (2) of Section 3 which provides
that no tax shall be levied under the Entry Tax Act 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 tax has been paid by any other person or dealer under the Act.
Thus, Form E1 has to be furnished by a dealer who brings the scheduled
goods into the local area and claims that in respect of such goods entry tax
has been levied earlier.
18. In view of the above, we are of the considered opinion that
under law it is not obligatory on the part of a dealer to furnish Form E-1 in
respect of the goods purchased by it from another registered dealer of the
same local area who brought the scheduled goods in question into the local
area.
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19. Question No.(iii) is whether to get the benefit from payment of
entry tax in respect of the scheduled goods purchased by a dealer from
another registered dealer of the same local area, who brought the said goods
into the local area, the dealer has to prove that its seller has in fact paid the
tax.
20. The incidence of taxation is on entry of the scheduled goods into
the local area for use, consumption or sale. Nobody is competent/authorized
to shift the point of taxation.
21. In view of the above, we are of the considered opinion that to get
benefit from payment of entry tax in respect of the scheduled goods
purchased by a dealer from another dealer/registered dealer of that locality,
who has brought the goods into the local area, the dealer need not prove that
its seller has in fact paid the entry tax. It will be enough for the dealer to
show that its seller is identifiable and has in fact made entry of the
scheduled goods into the local area and the tax is payable by its sellers.
22. Since question Nos.(iv) and (v) are interlinked, they are dealt
with together.
23. It is admitted by the petitioner that he has purchased scheduled
goods worth Rs.69,485/- from M/s. Lubrico, Bhubaneswar (RC No.BHI 895).
He claims exemption from payment of entry tax on such purchase on the
ground that the said goods have suffered entry tax earlier. In support of his
contention, he has furnished Form E1 as prescribed under Rule 3(5) of the
OET Rules. The above claim of the petitioner was rejected by the authorities
below on the ground that it has not furnished complete/defect free Form E-I
15
as prescribed under sub-rule (5) of Rule 3 along with return under sub-rule
(1) of Rule 10 of the OET Rules.
24. Now, we have to examine whether it is mandatory for the dealer-
petitioner registered under Cuttack-I Central Circle, Cuttack to furnish Form E1
along with return under Rule 10(1) of the OET Rules in respect of the goods
purchased by it from a dealer registered in Bhubaneswar-1 Circle, Bhubaneswar
and non-furnishing of Form E1 makes the dealer-petitioner liable to pay entry tax.
25. At this juncture, it is necessary to quote the relevant portion of
sub-rule (5) of Rule 3 of the OET Rules:
Rule 3. Rate of Tax.-
xx xx xx
"(5) Notwithstanding anything contained in this rule, no
tax shall be levied under these rules in respect of such
goods purchased by a dealer for which the details are
furnished in Form E1 along with the return under sub-
rule (1) of Rule 10 to prove that such goods have already
been subjected to entry tax or that the entry tax has
already been paid under the Act for such goods"
26. A conjoint reading of sub-rule (5) of Rule 3 and proviso to
Section 3(2) and column 8 of Return Form E3 makes it clear that it is
obligatory on the part of the dealer, who brings the scheduled goods into the
local area, to furnish Form E-1 along with return to prove that the scheduled
goods purchased by it from another dealer have already been subjected to
entry tax or that the entry tax has already been paid under the Entry Tax Act
for such goods. Thus, sub-rule (5) of Rule 3 of the OET Rules is mandatory in
nature.
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27. Perusal of Form E-1 reveals that a dealer in order to prove that
the goods purchased by him have already been subjected to entry tax or that
the entry tax has already been paid under the OET Act for such goods, he has
to furnish details in Form E-1 about (i) registration number and name of the
dealer from whom purchased, (ii) name of the scheduled goods purchased,
(iii) bill/invoice number and date, (iv) quantity, (v) purchase value of the goods
as per invoice, (vi) entry tax paid as per invoice, (vii) remarks.
As it appears, Rule 3 (5) has been prescribed to seal/plug
leakage/evasion of entry tax and ensure payment of entry tax leviable and
payable on purchase of scheduled goods.
28. Law is well-settled that when the statute requires to do
certain thing in certain way, the thing must be done in that way or not at
all. Other methods or modes of performance are impliedly and
necessarily forbidden. The aforesaid settled legal proposition is based on
a legal maxim "Expressio unius est exclusion alteris", meaning thereby
that if a statute provides for a thing to be done in a particular manner,
then it has to be done in that manner and in no other manner and
following other course is not permissible. (See Taylor v. Taylor, (1876)
1 Ch.D.426; Nazir Ahmed v. King Emperor, AIR 1936 PC 253; Ram
Phal Kundu v. Kamal Sharma, (2004) 2 SCC 759; and Indian
Bank's Association v. Devkala Consultancy Service, AIR 2004 SC
2615).
29. In view of the above, we are of the considered opinion that
furnishing of Form E-1 as prescribed under sub-rule (5) of Rule 3 along with
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returns under sub-rule (1) of Rule 10 is mandatory on the part of a dealer
who brings the scheduled goods into the local area to prove that the goods
purchased by it have already been subjected to entry tax or that the entry
tax has already been paid under the Act for such goods and that non-
furnishing of Form E-1 as prescribed under sub-rule (5) of Rule 3 along with
return under sub-rule (1) of Rule 10 makes the dealer, who brings the
scheduled goods into the local area, liable to pay the entry tax on scheduled
goods purchased from outside the local area.
30. Question No.(vi) is whether a dealer who has brought the
scheduled goods into the local area and has filed a defective Form E-1 can
call upon the Department to summon or call for the records of the selling
dealer or any other person or to conduct any inquiry to test the correctness
of its claim that the goods purchased by it has suffered tax at the hands of
any purported selling dealer.
31. There is a conceptual difference between production of
alternative materials to avail benefit of tax (for example, Section 6(2) of the
CST Act, 1956 and production of Form-F) and mandatory requirement to
produce declaration form (for example, Form-C under the CST Act, 1956 and
Form-D under the OST Act, 1947) to avail tax concession/benefit. In other
words, wherever, alternatives are provided, it is specifically provided. But in
the instant case, a bare reading of Rule 5(3) of the OET Rules quoted above
makes the position clear that the dealer who claims that no tax is payable on
entry of scheduled goods into the local area has to file requisite Form E-1
along with return as prescribed under the Statute.
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32. Admittedly, in the instant case, Form E-1 which has been filed
in respect of the scheduled goods purchased from M/s. Lubrico,
Bhubaneswar (RC No.BH I 895) is incomplete/defective and therefore, does
not meet the requirement in order to prove that the dealer-petitioner is not
liable to pay entry tax. The burden is on the dealer to file complete and defect
free Form E-1. It is not open to contend that to test correctness of its claim
the Department has to summon or call for the records of selling dealers or of
any other person or to conduct any inquiry. The burden lies squarely on the
dealer to substantiate its claim and if it is not done the consequence is that it
is liable to pay tax.
33. In view of the above, we are of the considered opinion that a
dealer who has brought the scheduled goods into the local area and has filed
defective Form E1 cannot call upon the Department to summon or call for
the records of the selling dealer or any other person or to conduct inquiry to
test the correctness of its claim that the goods purchased by it has suffered
tax at the hands of any purported selling dealer.
34. After analysis of the legal position, the factual scenario has to be
examined. From perusal of the assessment order, first appeal order and
second appeal order, it is clear that the petitioner has nowhere canvassed
the points which are presently urged before us in respect of purchase of
scheduled goods claimed to have been made from three local dealers
registered in Cuttack-1 Central Circle, Cuttack.
On contrary, petitioner's stand related to the acceptability of the
Form E1, purchase invoices and prayer for direction to the tax authority to
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summon or call for the records of selling dealer or to conduct any inquiry to
substantiate petitioner's stand.
Assessment order does not reveal that the petitioner took any of
the contentions raised now before the taxing authority or any appellate
authority.
Before the 1st appellate authority, the petitioner contended that
it being a dealer in lubricants, which is scheduled goods under the OET Act,
he purchased the scheduled goods from the registered dealers of Orissa on
payment of entry tax and hence is not liable to pay entry tax again. In
support of its above contention, the petitioner produced purchase invoices
issued by the selling dealer. On examination of those purchase invoices, the
1st appellate authority observed that there is no mention on the invoices
issued by the selling dealers that entry tax has been collected from the
dealer-petitioner by the sellers of goods. The 1st appellate authority has also
not accepted the Form E1 produced by the petitioner as the same were
incomplete/defective. For the aforesaid reasons, the 1st appellate authority
has confirmed the assessment.
Before the learned Tribunal, the petitioner filed Xerox copy of
the statement of purchase and prayed for verification of the same by the
lower forum. The contention of Revenue was that the petitioner dealer failed
to substantiate its claim under Rule 3(5) of the OET Rules by submitting the
complete/defect free Form E1. The learned Tribunal dismissed the appeal on
the ground that the action of the 1st appellate authority is just, appropriate
and legal.
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35. The issue relating to production of Form E1 as well as to call
upon the Department to summon or call for the records of the selling dealer
(s) or conduct any inquiry to test correctness of the petitioner's claim that the
goods purchased by it has suffered tax at the hands of its selling dealer (s)
has been elaborately discussed above. So far the present stands in respect of
purchase of scheduled goods claimed to have been made from the dealers of
same local area and under the law, the petitioner is not liable to pay entry
tax are concerned, the same having not been taken before the authorities
below, they have not dealt with the factual background vis-à-vis the position
of law. It would be, therefore, appropriate that the Tribunal shall deal with
this aspect after giving adequate and appropriate liberty to the Revenue to
counter the said stands and adduce rebuttal materials.
36. In view of the above, the matter is remitted back to the Tribunal
for fresh adjudication in the light of our observations made above.
37. The STREV is disposed of accordingly.
...............................
B.N. Mahapatra, J.
I. Mahanty, J.I agree.
............................. I. Mahanty, J.
Orissa High Court, Cuttack Dated 31ST March, 2014/ss/skj