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IN THE HIGH COURT OF ORISSA AT CUTTACK
S. MURALIDHAR, R.K. PATTNAIK, JJ.
M/s. Glamour, Cuttack – Petitioner
Versus
State of Odisha – Respondent
STREV No. 8 of 2013
Decided On : 29-07-2022
Entry Tax - Aluminum Extrusion - Orissa Entry Tax Act, 1999, Section 7
Fact of the Case:
The case involved a dispute over the liability to pay entry tax on Aluminum extrusions brought into Odisha from outside the state. The Sales Tax Officer determined the entry tax liability of the dealer, which was contested by the Assessee through appeals to the Assistant Commissioner of Sales Tax and the Orissa Sales Tax Tribunal.
Finding of the Court:
The Court held that Aluminum extrusions were not covered by Entry 11 of Part-I of the Schedule to the Orissa Entry Tax Act, and therefore, were not liable for entry tax at 1%. The Court also found that the Tribunal was not justified in upholding the levy of penalty under Section 7(5) of the OET Act.
Issues: The main issues were whether Aluminum extrusion falls under Entry 11 of Part I of the Schedule of the OET Act and is liable to entry tax at 1%, and whether the Tribunal was justified in upholding the levy of penalty under Section 7(5) of the OET Act.
Ratio Decidendi: The Court applied the principle of strict interpretation in taxation law and considered the meaning of the word 'etc.' in the context of the Schedule to the OET Act. It relied on legal precedents and trade parlance tests to determine the scope of the entry and concluded that Aluminum extrusions were not covered by the relevant entry.
Final Decision: The impugned order of the Tribunal and the corresponding orders of the STO and the ACST were set aside, and the petition was disposed of in favor of the Assessee.
JUDGMENT :
S. MURALIDHAR, J.
1. This revision petition arises from an order dated 6th July, 2012 passed by the Orissa Sales Tax Tribunal, Cuttack (Tribunal) dismissing the SA No. 78(ET) of 2009-10 filed by the Assessee against an order dated 14th January, 2009 passed by the Assistant Commissioner of Sales Tax (Appeal), Cuttack (ACST) confirming an entry tax (ET) demand of Rs. 4,45,596/- raised by the Sales Tax Officer (STO) under Section 7 of the Orissa Entry Tax Act, 1999 (OET Act) for the Assessment Year (AY) 2004-05.
2. The background facts are that the Assessee is a registered dealer, dealing in ready-made garments, hosiery cloth and Aluminum extrusion. For the AY in question, the STO determined the gross turnover (GTO) of the dealer at Rs. 2,57,32,641. He then took up the ET liability of the dealer and held that the dealer was required to pay ET of Rs. 4,45,696/-. After the appeal of the dealer was dismissed by the ACST, he approached the Tribunal.
3. By the impugned order, the Tribunal decided the appeal ex-parte. Nevertheless, on merits the Tribunal held that the entry in Part-I Schedule of the OET Act, which reads “Sheets, rods etc. of non-ferrous metal including Aluminum” would cover Aluminum extrusion as well and, therefore, they were amenable to tax @ 1%. The contention of the Assessee that Aluminum extrusions are not Scheduled goods and no ET was payable on the goods imported and not manufactured within the State of Odisha was not accepted by the Tribunal.
4. While admitting the present revision petition on 3rd November 2014, the operation of the Assessment order was stayed during pendency of the petition subject to the Petitioner depositing Rs. 50,000/- and the following questions were framed by this Court for consideration:
(ii) Whether the Tribunal is justified in upholding the levy of penalty under Section 7(5) of the OET Act undisputedly when the assessment was completed under Section 7(3) of the OET Act?”
5. This Court has heard the submission of Mr. R.P. Kar, learned counsel appearing for the Petitioner and Mr. Sunil Mishra, learned Additional Standing Counsel for the Department.
6. The contention of the Petitioner is that it brings Aluminum extrusions from outside the State of Odisha for sale within Odisha and as such no entry tax is payable on goods which are not mentioned in the Schedule appended to the OET Act. Entry 11 of Part-I of the Schedule to the OET Act reads: “Sheets, rods etc. of non-ferrous metal including Aluminum.” If one compares the above entry with certain other entries in the Schedule to the OET Act, it is seen that there are certain other entries which do not contain the word ‘etc.’ and connote a larger range of products. For e.g. Entry 16 reads: “Tobacco and Tobacco products.” On the other hand there are entries which use the expression ‘etc.’ like Entry 5 in Schedule-II which reads: “Cinematography equipments and other equipments etc..” Here the word etc. can obviously mean only things of the same type as the goods preceding. These two contrasting entries reflect the legislative intent. Where the entry is meant to be broad and inclusive, it would include all products of a particular material. To connote this, the words “products and products thereof” are used.
7. However, in the context in which Entry 11 is inserted, it is seen that the word ‘etc.’ qualifies the words “Sheets, rods which are of non-ferrous metal including Aluminum.” The word ‘etc.’ cannot obviously include all products of the non-ferrous metals including aluminum but to the articles which are similar to “sheets, rods.” The definition of the term ‘extrusion’ as a noun refers to extruded products which are angles, brackets used in roofs as a base support. These are neither sheets nor rods. In common trade parlance when one goes to a shop selling such products and asks for ‘Aluminum extrusions’, the seller
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