M/S.V.A.Narsimha Moorty And Sons vs. State Of Orissa

Held

The Court held that the questions of law were identical to those in the case of General Traders Vrs. State of Odisha, STREV No.64 of 2017, which was decided on the same day. In that case, the questions were answered in favour of the assessee and against the Department. Therefore, the impugned order of the Tribunal dated May 18, 2017, and the corresponding orders of the First Appellate Authority and Assessing Authority were set aside to the extent they were adverse to the petitioner. The Court found that the production of 'H' Forms and export documents, including the Bill of Lading, should have been considered sufficient for the exemption under Section 5(3) of the CST Act, and the remand for fresh assessment by the First Appellate Authority was not justified. The Tribunal's direction for reconsideration of penalty, in the absence of a State appeal or cross-objection, was also found to be erroneous. The ratio decidendi is that when sufficient export documentation is provided, a remand for further documentation is unwarranted, and a Tribunal cannot direct reconsideration of issues not appealed by the revenue.

Facts

The petitioner, M/s. V.A. Narasimha Moorty & Sons, a partnership firm, challenged an order of the Odisha Sales Tax Tribunal. This order was in appeal against an order by the Additional Commissioner of Sales Tax, Berhampur, which in turn was based on an audit assessment by the Joint Commissioner of Sales Tax, Ganjam Range. The dispute concerns tax periods from July 1, 2007, to March 31, 2011. The petitioner claimed exemption under Section 5(3) of the CST Act for export sales amounting to Rs. 3,32,99,562. The Assessing Officer disallowed this exemption for failing to provide agreements between Indian Exporters and Foreign Buyers, treating the transaction as deemed sale. The First Appellate Authority disallowed the exemption but deleted the penalty. The Tribunal, while upholding the disallowance of exemption, remitted the matter for fresh assessment, also showing indulgence on the penalty deletion.

Key Issues

1. Whether, in light of the production of 'H' Forms and export documents including Bill of Lading for claims under Section 5(3) and 5(4) of the CST Act, it was lawful for the First Appellate Authority to remand the matter to the Assessing Authority for fresh assessment? The petitioner argued that the production of these documents should have been sufficient, and a remand was improper. The State's contention is not explicitly recorded regarding this specific point, beyond its general opposition to the petitioner's claims. 2. Whether, in the absence of an appeal or cross-objection by the State and in view of the Circular dated April 20, 2015, of the Commissioner of Commercial Taxes, Odisha, the Tribunal was justified in rendering findings for reconsideration on the issue of penalty imposition under Section 12(3)(g) of the CST(O) Rules, 1957? The petitioner contended that without a State appeal or cross-objection, the Tribunal should not have directed reconsideration of the penalty. The State's arguments on this issue are not explicitly recorded.