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HIGH COURT OF ORISSA
PANIGRAHI,P.V.B.RAO, JJ.
Chakko Bhai Ghelabhai
Versus
State of Orissa
O.J.C. No. 92 of 1955
Decided On : 05-09-1955
SALES TAX - Orissa Sales Tax Act, 1947 (Orissa Act 14 of 1947) - Ss. 2(g), 4, 5, 6, 8, 9, 9-A, 11, 12, 20, 23, 24, 29 - Orissa Sales Tax Rules, 1947 - Rr. 48, 49, 50, 51, 52, 59, 61, 62 - Adaptation of Laws Order, 1950 - Cl. 20 - Constitution of India, 1950 - Arts. 286, 301, 304 - General Clauses Act, 1897 (Central Act 10 of 1897) - S. 6 - Court-fees Act, 1870 (Central Act 7 of 1870) - Whether the levy of court-fees on appeals and revision or review petitions amounts to the imposition of a tax which is clearly unwarranted and is beyond the rule-making power of the State Government - Whether the liability of the dealer to taxation still continued inspite of the omission of the proviso by the Adaptation Order - Whether the notice in Form VI issued by the opposite parties is in conformity with the provisions of the Act.
Fact of the Case:
The petitioner is a firm dealing in Biri leaves with its head-quarters in Bagbahara in Madhya trades. During the years 1948 to 1951 he was engaged in collecting Biri leaves from the forest areas of Borasambar Zamindari in Sambalpur district, and was carrying on the business of collecting and storing them in godowns situated at various centres within the State of Orissa. These leaves were stored and made up into bundles which were then despatched to various destinations outside the State of Orissa. The petitioner has been assessed to sales tax and, in addition, a penalty has been imposed upon him for not getting himself registered under the provisions of the Orissa Sales Tax Act. He has, therefore, come up to this Court and prays for a writ directing the Sales Tax authorities to withdraw the demand for payment of taxes and to rescined the orders passed by them.
Finding of the Court:
The Court held that the levy of court-fees by the Taxing officer at different stages of the assessment proceedings is ultra vires. The assessment order is set aside. The petitioner shall be directed to furnish a return of his transactions under S. 11, for the period for which he has been served with a notice under S. 11(1). The assessment order al ready passed and the demand for recovery of the tax as well as of the penalty should be withdrawn. The court-fees paid by the petitioner at the different stages of the assessment proceedings should be refunded to the petitioner.
Issues: 1. Whether the levy of court-fees on appeals and revision or review petitions amounts to the imposition of a tax which is clearly unwarranted and is beyond the rule-making power of the State Government? 2. Whether the liability of the dealer to taxation still continued inspite of the omission of the proviso by the Adaptation Order? 3. Whether the notice in Form VI issued by the opposite parties is in conformity with the provisions of the Act?
Ratio Decidendi: 1. The Court held that the levy of court-fees on appeals and revision or review petitions amounts to the imposition of a tax which is clearly unwarranted and is beyond the rule-making power of the State Government. The Court relied on the provisions of the Orissa Sales Tax Act, 1947, the Orissa Sales Tax Rules, 1947, the Adaptation of Laws Order, 1950, the Constitution of India, 1950, the General Clauses Act, 1897 and the Court-fees Act, 1870 to arrive at this conclusion. 2. The Court held that the liability of the dealer to taxation still continued inspite of the omission of the proviso by the Adaptation Order. The Court relied on the provisions of the Orissa Sales Tax Act, 1947, the Adaptation of Laws Order, 1950 and the General Clauses Act, 1897 to arrive at this conclusion. 3. The Court held that the notice in Form VI issued by the opposite parties is not in conformity with the provisions of the Act. The Court relied on the provisions of the Orissa Sales Tax Act, 1947 and the Orissa Sales Tax Rules, 1947 to arrive at this conclusion.
Final Decision: The assessment order is set aside. The petitioner shall be directed to furnish a return of his transactions under S. 11, for the period for which he has been served with a notice under S. 11(1). The assessment order al ready passed and the demand for recovery of the tax as well as of the penalty should be withdrawn. The court-fees paid by the petitioner at the different stages of the assessment proceedings should be refunded to the petitioner.
Judgement
PANIGRAHI, C. J :- The petitioner is a firm dealing in Biri leaves with its head-quarters in Bagbahara in Madhya trades. During the years 1948 to 1951 he was engaged in collecting Biri leaves from the forest areas of Borasambar Zamindari in Sambalpur district, and was carrying on the business of collecting and storing them in godowns situated at various centres within the State of Orissa. These leaves were stored and made up into bundles which were then despatched to various destinations outside the State of Orissa.
The petitioner has been assessed to sales tax and, in addition, a penalty has been imposed upon him for not getting himself registered under the provisions of the Orissa Sales Tax Act. He has, therefore, come up to this Court and prays for a writ directing the Sales Tax authorities to withdraw the demand for payment of taxes and to rescined the orders passed by them.
2. A number of contentions have been raised by learned counsel for the petitioner. It is urged, firstly that the petitioner is not a dealer as defined in the Orissa Sales Tax Act, that he had no place of business in Orissa, that he was merely sending the goods from Orissa to places outside the State and consequently the Orissa Sales Tax authorities had no jurisdiction to assess him to sales tax.
Secondly, he complains that the opposite parties realised a sum of Rs. 1200/- as court-fees-under R. 59 of the Orissa Sales Tax Rules and that the levy of Court-fees on his memorandum of appeal and revision petitions is ultra vires. Finally, he, contends that the opposite parties had no jurisdiction to make twelve separate assessments under S. 12(5) after service of a single notice in Form VI.
3. The Sales Tax Officer, Patna Circle, issued a notice on 21-7-1950 under Ss. 11(1), 12(5) and 12(7), Orissa Sales Tax Act in Form VI as follows :
Form VI.
Notice to a dealer under Ss. 11(1), 12(5) and 12(7), Orissa Sales Tax Act, 1947.
(See Rr. 22, 23 and 28(2)).
To,
Chukabhai Golabhai,
Village/Post Lakhna.
Whereas it appears to me that your gross turnover immediately preceding the commencement of the Orissa Sales Tax Act 1947 had exceeded Rs. 5000/- but that you have nevertheless wilfully failed to apply for registration under S. 9 of the Act,
Whereas I have reason to believe that your turnover for the quarters ending the 31st December 1947 to 30th June 1950 on which sales tax payable under the Orissa Sales Tax Act, has escaped assessment.
You are hereby required to submit within one month from the date of receipt of this notice a return in Form IV (separately enclosed) showing separately the particulars of your turnover for each of the quarters ending December 1947 to the 30th June 1950.
You are also hereby required to attend in person, or by agent, at my office at Bolangir on the 22nd August 1950 at 10-30 A.M. and there to produce or cause to be produced the accounts and documents specified on the reverse,
and also to show cause why, in addition to the amount of tax that may be assessed on you, a penalty not exceeding 1 1/2 times the amount should not be imposed on you under Sub-S. (5) of S. 12 of the Act. In the event of your failure to comply with all the terms of this notice I shall proceed to assess you to the best of my judgment without reference to you.
Sd. .... .... ....
Place _______________ Bolangir.
Assistant Sales Tax Officer,
Date _________ 21-7-50 Patna Circle,
Note :- Unnecessary words should be scored out.
. . . . . . . . . . . . . . . . . . . .
It appears that the notices under S. 12(5) were issued on the petitioner from time to time, but the firm did not put in appearance and sent replies to the effect that he was not a dealer with, in the meaning of the Orissa Sales Tax Act and that he was only storing kendu leaves in his depot at Lakhna and despatching the same therefrom to places outside the Orissa State. On 30-6-1951 one of the partners of the firm appeared before the Sales Tax Officer, but did not produce the necessary accounts.
The partner Shri Narbhera
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