G.K. Misra, C.J.
1. The petitioners are sub-dealers in jeeps, pick-ups and trailers of M/s. Mahindra & Mahindra Limited under the Hirakud Motors, Sambalpur, who are the main dealers. The petitioners purchased jeeps and pick-ups for the period 1st April, 1966, to 31st March, 1967, from the Hirakud Motors (opposite party No. 6) without payment of tax, and for the said sum furnished declarations. The petitioners now say that they were not aware of Rule 93-A of the Orissa Sales Tax Rules which came into force on 14th May, 1963, and though the said purchases were not taxable, wrongly tax had been paid. Even the department itself was ignorant of the rule and was all through taxing the petitioners without taxing the Hirakud Motors. Subsequently, the department issued notice on 4th August, 1969, to the opposite party No. 6 for reopening the assessment for the year 1966-67 in respect of the identical transactions. On 16th October, 1969, an order of assessment was passed against the opposite party No. 6 for this period under Section 12(8). The petitioners, therefore, filed an application for rectification under Rule 83 of the Orissa Sales Tax Rules before the Sales Tax Officer, Rourkela Circle, which is still pending. This writ application has been filed for quashing the assessment for the period 1st April, 1966, to 31st March, 1967, with a direction for recomputation with regard to other transactions excluding those in between the Hirakud Motors and the petitioners.
2. Rule 93-A runs thus :
(1) In a series of sales by successive dealers all motor vehicles shall be taxed at the point at which the first of such sales is effected by a dealer liable under the Act.
(2) Notwithstanding that motor vehicles are specified in the purchasing dealer's certificate of registration the sales of such motor vehicles at the aforesaid point shall be included in the computation of the taxable turnover of the dealer, who sells them at that point.
(3) Dealers other than those by whom the sales of motor vehicles are effected at the aforesaid point, may for the purpose of computing their taxable turnover under Sub-section (2) of Section 5 of the Act deduct from their gross turnover, ,the turnover in respect of the sales of such motor vehicles.
It would appear from the aforesaid rule that all motor vehicles shall be taxed at the first point of such sales effected by dealers liable under the Act. Sub-rule (2) makes it clear that even though motor vehicles are specified in the purchasing dealer's certificate of registration, still the sale at the first point would not be free from tax. Sub-rule (3) makes it further clear that other dealers are not liable to pay tax and would deduct that amount from their gross turnover.
3. It is thus clear that tax was wrongly collected on a mistake of law from the petitioners in respect of the transactions of motor vehicles for the period 1st April, 1966, to 31st March, 1967, in between the petitioners and the Hirakud Motors. The assessment order against the petitioners in respect of this period does not exclusively pertain to the transactions between them and the Hirakud Motors. The petitioners, therefore, will not be completely exempted from assessment. The assessment order must, however, be quashed as it is an integrated order comprising not only the transactions for this period in between the petitioners and the Hirakud Motors, but also other transactions. We accordingly quash the impugned assessment order annexure-B dated 8th February, 1963, and direct the opposite party No. 1, the Sales Tax Officer, Rourkela Circle, to re-assess and recompute the tax by excluding the aforesaid transactions between the Hirakud Motors and the petitioners. Assessed tax relating to these transactions, if paid, be refunded to the petitioners.
4. In the result, the writ application is allowed as indicated above. A writ of certiorari be issued quashing the impugned order and a writ of mandamus be issued directing the opposite party No. 1 to make reassessment and recomputation. In the circumstances, there will be no order as to costs.
S. Acharya, J.
5. I agree.