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State of Orissa Vs. Tanguda Gopalam and Sons - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtOrissa High Court
Decided On
Case Number Special Jurisdiction Case No. 153 of 1973
Judge
Reported in42(1976)CLT24; [1975]36STC454(Orissa)
AppellantState of Orissa
RespondentTanguda Gopalam and Sons
Appellant Advocate The Standing Counsel (S.T.)
Respondent Advocate R. Mohanty, Adv.
Excerpt:
.....but it remains as a reward to the accused of forest offence. such a concept is totally not conceivable from any provision in the act, 1972 or the act, 1951. [air 2002 orissa 130 overruled]. - the conditions must, therefore, be strictly satisfied before the assessee can be found entitled to the rebate. factually, it must be held that the assessee has satisfied the conditions laid down in sub-section (8) of section 13 of the act and has, therefore, rightly claimed the rebate......upheld the demand raised by the assessing officer. the tribunal in second appeal held :the entire rebate due has been disallowed and the tax demand in dispute has been raised. the assistant commissioner having confirmed the order, the appellant has come up in this appeal. as per section 13(8) of the o. s. t. act rebate of 1 per cent on the amount of tax payable by a dealer shall be allowed after such tax is paid by the dealer on the due date of payment. in the instant case, the appellant has claimed rebate at that rate. the difference arose because the appellant had collected tax in excess of the amount due which also has been paid while filing the returns. section 9-b, sub-section (3), postulates that excess tax, if any, paid or excess tax, if any, realised shall also be.....
Judgment:

R.N. Misra, J.

1. The Member, Sales Tax Tribunal, has stated a case on an application of the Commissioner of Sales Tax made under Section 24(1) of the Orissa Sales Tax Act (hereinafter referred to as the 'Act'), and has referred the following question for opinion of the court :

Whether, on the facts and in the circumstances of the case, the Sales Tax Tribunal is right in holding that the short credit being negligible, the rejection and disallowance of the claim of rebate in its entirety is not justified.

2. The period of assessment is 1968-69 covering four quarters ending on 30th June, 1968, 30th September, 1968, 31st December, 1968, and 31st March, 1969. There is no dispute about the gross turnover or the taxable turnover of the assessee. Quarterly returns were filed in time and admitted tax was duly credited to the treasury deducting rebate as provided in Section 13(8) of the Act. Certain excess collections of tax made by the assessee were also credited to the treasury along with the tax. The Sales Tax Officer found that there were small shortfalls in calculation of rebate as would appear from the tabular statement appended below :

--------------------------------------------------------------------------------Quarter Tax Rebate Tax Rebate Shortfallending collected claimed payable admissible in deposit(i) (ii) (iii) (iv) (v) (vi)--------------------------------------------------------------------------------30-6-68 17,929.58 179.29 17,844.17 178.44 0.859/68 17,409.09 174.09 17,323.42 173.23 0.8612/68 13,861.77 138.61 13,729.27 137.29 1.323/69 16,871.89 168.72 16,858.84 168.59 0.13--------------------------------------------------------------------------------

The assessing officer found that the assessee had not paid the entire tax due and, therefore, held that the rebate claimed was not admissible. Therefore, the demand in the respective quarters for the amount claimed by way of rebate out of the tax was required to be deposited.

3. The Assistant Commissioner upheld the demand raised by the assessing officer. The Tribunal in second appeal held :

The entire rebate due has been disallowed and the tax demand in dispute has been raised. The Assistant Commissioner having confirmed the order, the appellant has come up in this appeal. As per Section 13(8) of the O. S. T. Act rebate of 1 per cent on the amount of tax payable by a dealer shall be allowed after such tax is paid by the dealer on the due date of payment. In the instant case, the appellant has claimed rebate at that rate. The difference arose because the appellant had collected tax in excess of the amount due which also has been paid while filing the returns. Section 9-B, Sub-section (3), postulates that excess tax, if any, paid or excess tax, if any, realised shall also be deposited in the treasury. This is exactly what the appellant has done and while claiming the rebate he took into consideration the entire amount of tax paid which was in excess of the tax actually payable and this resulted in difference. The question is if, in the circumstances, the rebate claimed by the appellant can be disallowed. The two conditions prescribed in Section 13, namely, the filing of the returns in time and payment of tax by the stipulated date have been complied by him. Therefore, the claim of rebate of 1 per cent cannot be, in any circumstances, disallowed. The excess tax realised by him has been faithfully deposited in Government treasury. There is, therefore, no loss of revenue. Hence the reduction of the rebate claimed cannot be held justified.

In any view of the matter, the disallowance of the entire rebate appears illegal. The short credit in the respective quarters is very negligible. There would have been some reason if the reduction of the rebate was confined to make up this difference. The rejection of the entire amount of rebate that is admissible cannot be held justified because of the short credit made bona fide due to excess tax collected by the appellant....

4. To dispose of the dispute raised, some of the provisions of Section 13 of the Act have to be referred to. Sub-section (1) of that section provides:

Tax payable under this Act shall be paid in the manner hereinafter provided at such intervals as may be prescribed.

Sub-section (2) makes the provisions :

Before any dealer furnishes the returns required by Sub-section (1) of Section 11, he shall, in the prescribed manner, pay into a Government treasury the full amount of tax due from him under this Act according to such returns and shall furnish, along with the returns a receipt from such treasury showing the payment of such amount or a crossed bank draft or a crossed cheque covering such amount and drawn in favour of the prescribed authority.

Rules 36 and 37 of the Orissa Sales Tax Rules make provision for payment of tax. Sub-section (8) makes provision for rebate and runs thus :

A rebate of one per centum on the amount of tax payable by a dealer shall be allowed, if such tax is paid by the dealer on or before the due date of payment.

The explanation appearing at the foot of the section indicates the due date. Two conditions have been prescribed in Sub-section (8) to earn rebate, namely, (i) the entire tax must be paid, and (ii) such payment must be made on or before the due date. In our opinion, the Tribunal was not right in holding that if there is a short credit of the tax, disallowance of the entire rebate was not justified. Rebate is a concession, entitlement to which is conditional. The conditions must, therefore, be strictly satisfied before the assessee can be found entitled to the rebate. There is no provision in law that if there be a shortfall, the entire rebate cannot be withheld.

5. In the facts of the case, the position is, however, very different. In each of these quarters, the assessee had paid by way of tax larger amounts than were due by way of tax. In the four quarters in question, the assessee had credited to the treasury by way of tax a sum of Rs. 85.41, Rs. 85.67, Rs. 132.50 and Rs. 13.05 respectively. As against these amounts paid in excess of tax due, the alleged shortfall noticed is very small.

Section 9-B(3) has already been declared ultra vires the State Legislature and, therefore, the assessee was not required to make deposit of the excess collection. At any rate, because the excess collection has not been deposited, the assessee cannot be held to have defaulted in payment of tax due under the Act which would entitle him to rebate under Section 13(8) of the Act. Factually, it must be held that the assessee has satisfied the conditions laid down in Sub-section (8) of Section 13 of the Act and has, therefore, rightly claimed the rebate. The Tribunal should have given this as the reasoning for its conclusion,

6. We would accordingly answer the question referred to us by saying:

On the facts and in the circumstances of the case, the Tribunal was not right in holding that the short credit being negligible, the rejection and disallowance of the claim of rebate in its entirety was not justified.

We must, however, make it clear that for the reasons we have indicated, the ultimate decision of the Tribunal was correct. We would have saddled the revenue with the costs of the proceedings, but for the mistake made by the Tribunal in its reasoning for the conclusion.

N.K. Das, J.

7. I agree.


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