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IN THE HIGH COURT OF ORISSA AT CUTTACK
S. Muralidhar, M.S. Raman, JJ.
M/s. Jagdamba Polymers Pvt. Ltd., Balasore – Appellant
Versus
State of Odisha – Respondent
STREV No. 12 of 2015
Decided On : 06-12-2022
Entry Tax - Import of Goods - The court declined to frame the question of whether levy under Section 3 of the Odisha Entry Tax Act, 1999 is attracted on scheduled goods imported from outside the territory of India, as the issue had been settled by a previous decision of the Supreme Court. The court held that the levy of penalty under Section 10(2) of the Act was not justified, as most dealers were under a bona fide impression that Entry Tax would not be payable on imported goods, and there was no willful or deliberate attempt to evade payment.
Fact of the Case:
The Assessee-Dealer raised two questions regarding an order passed by the Orissa Sales Tax Tribunal. The first question was declined by the court as it had been settled by a previous decision of the Supreme Court. The court found that the levy of penalty under Section 10(2) of the Act was not justified.
Finding of the Court:
The court held that the levy of penalty was not justified due to the bona fide impression of dealers that Entry Tax would not be payable on imported goods and the absence of willful or deliberate attempt to evade payment.
Issues: The issues raised were whether levy under Section 3 of the Odisha Entry Tax Act, 1999 is attracted on scheduled goods imported from outside the territory of India, and whether the levy of penalty under Section 10(2) of the Act was warranted.
Ratio Decidendi: The court declined to frame the first question as it had been settled by a previous decision of the Supreme Court. The court held that the levy of penalty was not justified due to the absence of willful or deliberate attempt to evade payment.
Final Decision: The court set aside the impugned Assessment order imposing penalty on the Petitioner, and allowed the revision petition in favor of the Petitioner.
JUDGMENT
1. Two questions have been urged by the Assessee-Dealer in the present revision petition arising from an order dated 29th January, 2015 passed by the Orissa Sales Tax Tribunal (Tribunal) in S.A. No.215 (ET)/2013-14 filed by the Petitioner for the period 1st April, 2008 to 30th September, 2011. The said questions read as under:
'(i) Whether levy under Section 3 of the Odisha Entry Tax Act, 1999 is attracted on scheduled goods imported from outside the territory of India?
(ii) Whether in the facts and circumstances of the case levy of penalty U/s.10(2) of the Act is warranted?'
2. As far as the first question is concerned, the issue now stands settled by the decision dated 9th October 2017 of the Supreme Court of India in State of Kerala v. Fr. William Fernandez, (2021) 11 SCC 705. Consequently, the Court declines to frame question No.(i) as urged.
3. As far as the question No. (ii) is concerned, with the legal position having been settled only in October 2017, most of the Dealers-Assessees were under bona fide impression that Entry Tax would not payable on goods imported into India. Therefore, it could reasonably be contended that till such time there was no willful or deliberate attempt by the Dealer-Assessee to waive payment of Entry Tax.
4. The Court notes that under Section 10 (2) of the OET Act, there is an element of discretion in the Assessing Authority to levy penalty where the escapement or under assessment of tax 'is without any reasonable cause.' Since the Court is satisfied that the non-payment of Entry Tax on imported goods by the Petitioner, cannot be said to be without reasonable basis, the Court is of the view that in the present case the levy of penalty was not justified.
5. The question is accordingly answered in the negative i.e., in favour of the Petitioner and against the Department. The impugned Assessment order in so far as it imposes penalty on the Petitioner is hereby set aside and as the corresponding orders of the First Appellate Authority and the Tribunal.
6. The revision petition is allowed in the above terms.
7. Issue urgent certified copy of this order as per rules.
The absence of willful or deliberate attempt to evade payment justified the court's decision to set aside the levy of penalty under Section 10(2) of the Act.
The main legal point established in the judgment is the requirement for a factual determination by the Assessing Authority on the levy of entry tax on goods purchased from unregistered dealers and on....
The liability of the importers to pay entry tax on the imported vehicle has already been held in unequivocal terms by this Court in V. Krishnamurthy’s case (cited supra) followed by number of decisio....
The central legal point established in the judgment is that the authorities had no jurisdiction to impose entry tax on goods not mentioned in the schedule of the New Act.
The court highlighted that entry tax must be assessed legally before any collection is enforced, establishing a process for potential refunds based on prior court decisions.
Statutory authorities must complete tax assessments within a reasonable time to ensure compliance with principles of natural justice, even if no specific period is explicitly defined in the law.
Point of law: It is trite that if no period of limitation has been prescribed, statutory authority must exercise its jurisdiction within a reasonable period. What, however, shall be the reasonable pe....
The right of the Assessee to apply for a refund of any excess amount paid in accordance with the law.
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