The main legal point established in the judgment is the application of the 'common parlance test' and the commercial understanding of terms in tax provisions to determine the classification of goods for sales tax purposes.

JUDGMENT :

S. Muralidhar, J.

Introduction

1. These three tax revision petitions by Reckitt Benckiser (India) Ltd. raise an identical question of law viz., whether Robinson Barley and Purity Barley manufactured by the Petitioner should be subject to sales of tax under the Orissa Sales Tax Act, 1947 (OST Act) under the entry meant for cereals covered under Entry 16 List C @ 4% or under the residual entry at 12%?

2. While TREV No.176 of 2001 pertains to the period 1990-91, STREV No.75 of 2003 pertains to the period 1991-92 and STREV No.30 of 2012 pertains to the period 2000-01. In each of the assessment orders passed for the aforementioned periods, the Sales Tax Officer (STO) i.e. Assessing Officer (AO) rejected the plea of the Petitioner that the aforementioned products of the Petitioner were nothing but barley as a cereal as mentioned in Entry 25 of List-C in Chapter III of the rate chart appended to the OST Act. The above orders have been confirmed by the Orissa Sales Tax Tribunal (‘Tribunal’) by rejecting the Petitioner’s appeals.

3. It requires to be noted at the outset that there was a batch of six revision petitions filed by the Petitioner including the present three revision petitions. STREV No.75 of 2011 for the period 2001-02; STREV No.56 of 2010 for the period 2002-03; STREV No.55 of 2011 for the period 2004-05 were all disposed of on 20th June, 2022 itself.

Relevant provisions

4. At the outset, it must be observed that the Entry number in the rate chart has been varied by fresh notifications issued from time to time. As per the Rate notification with effect from 1st April, 2001 issued by the competent authority in exercise of its power under Section 5(1) of the OST Act, the particulars of the serial number and the rate of sales tax on which reliance is placed by the Petitioner is given as under :

5. The FPOS Notification sets out the products subject to first point sales tax. In the said notification, in Item No.52, cereals have been included as follows :

“52. Cereals i.e. bajra, kodan, barley, kukki.”

6. Section 14 of the Central Sales Tax Act, 1956 (‘CST Act’) is titled ‘Goods of special importance in inter-state trade or commerce’. It declares certain goods to be of special importance in inter-state trade and commerce (‘declared goods’). Clause (i) of Section 14 of the CST Act reads as under :

“14. Certain goods to be of special importance in inter-State trade or commerce.

It is hereby declared that the following goods are of special importance in inter-state trade or commerce:

(i) cereals, that is to say,—

…

(x) barley (Hordeum vulgare L.)”

7. Section 15 of the CST Act imposes certain restrictions upon, and conditions regarding imposition of tax on sale or purchase of declared goods by State Legislatures. Section 15 of the CST Act includes a condition that the tax on declared goods shall not exceed 4% and the tax shall not be levied at more than one stage.

8. The Petitioner argues that Robinson Barley is to be properly classified under Entry 25 of List-C in Chapter III of the Rate chart pertaining to ‘cereals’ which would apply and not the residual Entry 189.

The product

9. Mr. B.K. Mahanti, learned Senior Counsel appearing for the Petitioner has filed elaborate written submissions dated 16th May, 2022, 20th June, 2022 and 4th July, 2022. In all these notes of submissions, the product i.e. Robinsons Barley and Purity Barley have been described elaborately as follows :

“That barley has been patented to bear the trade mark Robinson’s which is known as patented barley and the other packets are purity barley. Robinson’s patented barley is fortified with calcium and iron in the following proportions:

Powdered barley – 98.725%

Calcium Carbonate – 1.