State Of Orissa vs. M/S.K.K.Roller Flour Millspvt.LTD.
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Cause title — parties, addresses and appearances
ORDER 11.09.2023 Order No.
(Through hybrid mode)
Heard Mr. Sunil Mishra, learned Standing Counsel for Commercial Tax and GST along with Mr. Anand Das, learned Additional Standing Counsel and Mr. A.K. Mohanty, learned counsel appearing for the opposite party-assessee.
By means of this revision petition (STREV) filed under Section 24 of the Odisha Sales Tax Act, 1947 read with Rule 52A of the Odisha Sales Tax Rules, 1947, the order dated 08.01.2016 passed in Second Appeal No. 1459 of 2001-02 by the Full Bench of Odisha Sales Tax Tribunal under Annexure-3 to the petition has been challenged.
In the said Second Appeal, the order dated 24.11.2001 passed by the learned Assistant Commissioner of Sales Tax, Cuttack I Range, Cuttack in Sales Tax Appeal No. AA-167-CUIE-2001-2002 was challenged. The First Appellate Authority has held as follows: “Sale of bran was made exigible to tax @ 4% with effect from 08.02.99 vide Government of Orissa in Finance Department Notification No. 86/99 dtd. 8.02.99 with deletion of the condition “If sold for use as cattle feed”. In view of this codal provision, the appellant is liable to pay Orissa Sales Tax @ 4 % and surcharge due on the sale value of wheat bran of Rs.1, 17, 32, 810.75 and this is exactly what the LAO has adopted for the purpose of his assessment of tax. In view of the above discussion, it becomes quite clear that the contention taken by the I.A. to keep the sale turnover of wheat bran outside the scope of taxation merits no consideration and, therefore, the same fails. The LAO is found justified in disallowing the appellant his unjustified and illegal claim of deduction made towards sale of free goods needing no interference from this forum.
Accordingly, the gross turnover disclosed by the appellant and adopted by the LAO is upheld in appeal. The taxable turnover is re-determined at Rs.7,28, 87, 899. 99. Tax including surcharge due comes to Rs.32, 58, 843. 28. The appellant already having paid Rs.27, 27, 239.00 under Rule 36 of the O.S.T. Rules is now required to pay the balance amount of Rs.6, 25, 604.00 as per this order of appeal.”
It is apparent that the first appeal was partly allowed.
Against the said order of the First Appellate Authority, the dealer, the opposite party has filed the appeal under Section 12 (4) of the Odisha Sales Tax Act. By the impugned order, the said appeal was allowed by setting aside the order dated 24.11.2001 of the First Appellate Authority.
It may be gainfully noted that the order of the First Appellate Authority has observed inter alia that by SRO No. 150/2001 which was simultaneously issued with effect from 01.04.2001, a new entry in the list substituting entry at Sl. No. 2 and inserting only ‘Bran’ by deleting ‘Bran other than cattle feed’. The appellant submits that the amendment has not left any space for doubt or differing interpretation. But, it has been asserted by the assessee that the intention of the legislature can be had from the subsequent legislation. That never intended to withdraw exemption of tax on sale of “Wheat Bran”, which is essentially a cattle feed. To buttress the said proposition a reference has been made to a decision of this High Court in Laxmi Agency & Pathera vrs. The State of Orissa: 1995 I OLR 671. It has been observed in the said decision so far as the Entry 30-D is concerned that the commodities catalogued under the said entry are only enumerative and illustrative and not exhaustive. Any goods which is known in the common parlance and trade parlance as feed and fodder would come within the said entry.
While reversing the judgment of the First Appellate Authority, the Tribunal has further observed that it is well settled that if the conditions or the restrictions placed in order to provide exemption militate against the purpose for which exemption has been granted and have effect of defeating the very purpose to a large extent, then those conditions cannot be upheld. In the case in hand, exemption as sought to be provided under Entry 30D has been introduced with intention to benefit the farmers for making feed and fodder available at a affordable price and therefore, any interpretation or restriction which would make such commodities dearer would defeat the very purpose and intent for which such exemption was introduced.
The Tribunal has finally observed that the sale of wheat bran is tax-free as contemplated under Entry 30-D under the tax-free list during the assessment year (1999-2000) under reference and accordingly, the demand to the tune of Rs.6,25,604/- was interfered with and quashed.
Mr. Sunil Mishra, learned Standing Counsel for Commercial Tax and GST appearing for the Revenue has contended that the said interpretation is unsustainable in as much as when the general provisions are contrasted with the special or the specific provision in a tax statute, the special provision will prevail over the general provisions.
To nourish his submission, Mr. Mishra has referred to the relevant entries in the Odisha Sales Tax Act.
In the Schedule I is the tax free list. Entry 30-D thereunder provides the exemption in the following manner: “Sale of feed and fodder such as husk, straw, hay, grass, oil-cake including de-oiled cake and manufactured mixed balanced feed for cattle, poultry and pit shall be tax free.”
Similarly, the Schedule II catalogues the taxable items. The product or goods known as bran was under that schedule with tax @ 4%, subject to condition and exception that if the said product or goods are sold for use as cattle feed that will be exempted from tax [prior to 08.02.1999].
It has been specifically recorded by the First Appellate Authority that by the Finance Department Notification No. 5281- CTA-115/98-F (vide SRO No. 81/1999) dated 08.02.1999, the said entry was altered. By the said amendment, the clause “if sold for use as cattle feed” has been deleted. Since 08.02.1999 bran has been bracketed as the taxable commodity with tax liability of 4% on sale.
Mr. Mohanty, learned counsel appearing for the opposite party-assessee has asserted that by the subsequent change in the statute the bran has been made completely tax-free. Entry 30-D is reflection of the policy drawn up for welfare of the farmers.
According to Mr. Mohanty, learned counsel, since the bran in the common parlance is known as feed and fodder, therefore Entry 30-D will apply for the other Entry in order to read exemption.
In this context, Mr. Mohanty, learned counsel has relied a decision of this Court in Laxmi Agency and Others vrs. The State of Orissa and Others: 1995 (I) OLR 671 (Supra).
In that decision, this Court had occasion to lay down that the subsequent statute can be clarificatory in nature. In that case, the contention of the assessee was that insertion as made purports to be clarificatory to avoid varying assessments. It has been observed that it can also be said that the expression “including de-oiled cake” [in Laxmi Agency (supra)] was used to avoid any anomaly and conflict of views and to bring out the true meaning and effect of the term “cattle-feed” and to clarify that it also includes “de-oiled cake”.
According to Mr. Mohanty the said principle as laid down in Laxmi Agency (supra) can also be applied in the present case looking at the subsequent change in the statute whereby the bran was included under 30-D and making the same as completely tax-free.
We have taken note of the submissions of the learned counsel for the parties. The only question that is paramount and to be responded by us is that whether in presence of a specific provision, the general provision can have the sway or whether in presence of a specific provision in a tax statute, can a Court embank on interpretation by taking aid from the subsequent statute or not.
According to us, by enacting the notification dated 08.02.1999 the State has clearly excluded bran from exemption as provided by Section 30-D. In terms of the specific provision, barn is exigible to sale tax @ 4% Where the tax statute is clear, unambiguous and direct, the court is not generally called upon to interpret such statute. Court has to act upon the literal provision only. As such, the puspa
observation, based on which the order of the First Appellate Court was reversed by the Tribunal, is un-called for and the interpretation made by the Tribunal is not only unwarranted in the present context but is also inappropriate.
Hence, we quash the impugned order dated 08.01.2016 under Annexure-3 to the writ petition and restore the order of the First Appellate Court dated 24.11.2001, Annexure-2 to this petition.
In the result, the petition stands allowed. There shall be no order as to costs.
Urgent certified copy of this order be granted on proper application.
(S.Talapatra)
Chief Justice
(Savitri Ratho)
Judge
Reproduced from the public record of the Orissa High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.