R.N. Misra, C.J.
1. This appeal under Section 23(4)(c)(i) of the Orissa Sales Tax Act of 1947, hereinafter referred to as the 'Act', is directed against the order passed by the Commissioner of Sales Tax in exercise of his powers under Section 23(4)(a) of the Act read with Rule 80 of the Rules made under the Act.
2. The appellant is a registered dealer under the Act and carries on business in the Steel City of Rourkela. He deals in sewing machines and spares. For the year ending on 31st March, 1972, the dealer was assessed to tax by the Sales Tax Officer, Rourkela Circle. While computing tax, the assessing officer applied the rate of 5 per cent on the sales turnover of sewing machines and spares. The Commissioner entertained a suo motu revision and by his order dated 28th June, 1976, revised the assessment relating to the sales turnover of sewing machines and spares amounting to Rs. 1,20,866.36. He found that the turnover of such goods between 1st April, 1971 and 31st December, 1971, was Rs. 25,183.68 and between 1st January, 1972 and 31st March, 1972, was Rs. 34,702.65. As against the flat rate of 5 per cent applied by the Sales Tax Officer, the Commissioner assessed the first amount at 7 per cent and the second amount at 8 per cent and directed appropriate demands to be raised. This decision of the Commissioner is assailed in appeal.
3. Section 5 of the Act makes provision for rate of tax. At the relevant time the tax payable by a dealer under the Act was to be levied at 5 per cent on the taxable turnover, but the proviso to Sub-section (1) of that section authorised the State Government to impose either a higher rate of tax subject to an upper limit or a lower rate of tax as would be specified by a notification. In exercise of such power, the State Government had made a notification bearing No. 33927-CTA-130/57 dated 30th December, 1957, prescribing both lower and higher rates of tax for specified items of goods. Entries 47, 60 and 67 of the said notification which are relevant were to the following effect:
SI. No. Description of goods Rate of tax47. Sewing machines and knitting Seven per cent.machines and parts thereof60. All machinery and spare parts Seven per cent.and accessories thereof67. Any other articles Five per cent.
On 11th August, 1960, entry 47 was deleted from the aforesaid notification with effect from 1st August, 1960. From 1st January, 1972, the rate of tax against entry 60 was enhanced to 8 per cent. By Notification No. 20215-CTA-14/76-F dated 23rd April, 1976, issued in exercise of the power under the proviso to Section 5(1) of the Act, rates of tax were again prescribed by a new schedule. Entry 61 read thus :
SI. No. Description of goods Rate of tax61. Machineries including sewing Ten per cent.machines and component partsand accessories thereof
In the supplement to the Orissa Gazette dated 17th November, 1961, the report on the administration of the Commercial taxes department for the year 1960-61 was published under the authority of the Chief Secretary to the State Government. In Chapter II of the report, notifications issued during the year were catalogued. Reference was made under item No. (ii) to the relevant notification and the following was stated :
In Finance Department Notification No. 25714-C.T.A.-65/60-F dated the 11th August, 1960, issued under Section 5(1) of the Orissa Sales Tax Act, 1947, deleting the entries in columns 2 and 3 against serial No. 47 of the Schedule to the Finance Department Notification No. 33927-C.T.A.-130/57-F dated the 30th December, 1957, with retrospective effect from the 1st August, 1960. By this notification the rate of tax on sewing machine and knitting machine and parts thereof was reduced from 7 per cent to 5 per cent.
The Sales Tax Officer at the time of completing the assessment obviously relied upon this position and assessed the turnover of sewing machines and component parts thereof at 5 per cent. The Commissioner was of the view that when entry 47 was deleted, sewing machines came under entry 60 of the 1957 notification and notwithstanding the deletion of the special entry 47, by virtue of continuance of entry 60, the appropriate rate of tax was 7 per cent up to 31st December, 1971 and 8 per cent for the remaining part of the period.
As we have already pointed out, the normal rate of tax prescribed by the Act at the relevant time was 5 per cent. The Gazette notification referred to above certainly supports the stand of the assessee that with the deletion of entry 47, not entry 60 but entry 67 became applicable and therefore, the Sales Tax Officer had raised an appropriate demand and there was no scope for the Commissioner to interfere.
4. The learned standing counsel contended before us that the Commissioner of Sales Tax had no authority to bind the department by his opinion and if on a true analysis it appears that entry 60 would cover the transactions, merely because the gazette notification stated otherwise, the assessee could not succeed.
As we have pointed out, the gazette notification is not of the Commissioner of Sales Tax though the report emanated from the office of the Commissioner. The report was published under the authority of the Chief Secretary and it must be taken that the Government approved of what was stated therein. It must, therefore, follow that the State Government accepted the position that the consequence of deletion of entry 47 from the 1957 notification was that the sales turnover of sewing machines and spare parts, with deletion of entry 47, became taxable at the general rate and not under entry 60.
The fact that from 1974 onwards the sales turnover of such goods has been made exigible to sales tax at an enhanced rate of 10 per cent is indeed not a very material feature to take notice of in resolving the present dispute. The pertinent aspect for examination is whether prior to 1974-and we are concerned with such a period-the rate of tax was the general rate of 5 per cent or the enhanced rate under the 1957 notification.
Entries 47 and 60 in the 1957 notification co-existed. The State Government did not intend to include sewing machines and spares thereof in entry 60. Those were shown as separate class of goods. The Government deleted entry 47 without clearly indicating that entry 60 would cover what was herebefore in entry 47. Added to this, came the gazette publication of 17th November, 1961.
The legal position is well-settled that if there be any ambiguity in the matter of taxation it must be resolved in favour of the assessee. This is not a case where the assessee had collected tax at the higher rate from his buyers. The State Government must be estopped from raising the contention as advanced by the learned standing counsel in the facts and circumstances referred to above. Support is available for the stand of the assessee from the fact that in 1974 the State Government was not satisfied by specifying in entry 61 the description of goods to be machineries only. When rate of 10 per cent was prescribed, it clearly indicated sewing machines and component parts.
5. For the reasons we have indicated above, we must hold that the Sales Tax Officer was right in assessing the turnover at 5 per cent and entry 60 of the 1957 notification could not be relied upon for applying the enhanced rate of tax as done by the Commissioner.
6. The appeal is allowed with costs. Hearing fee is assessed at Rs. 200 (two hundred) to be paid to the assessee by the department. The order of the Commissioner is set aside and that of the Sales Tax Officer is restored.
N.K. Das, J.
7. I agree.